Chinese blockchain technology is expected to reduce the cost of Malaysian timber trade
Release date: April 26, 2023
Recently, the Ministry of International Trade and Industry of Malaysia said that Malaysia would benefit from the blockchain technology of China’s preferential certificate of origin (PCO) system. In the future, goods exported from Malaysia to China will be processed more effectively and safely, thereby achieving trade facilitation, which will promote the development of Malaysia’s export industry to China.
As of 2022, China has become Malaysia’s largest trading partner for 14 consecutive years. According to data statistics, the bilateral trade volume in 2022 reached 203.6 billion US dollars, with Malaysia’s exports to China also exceeding 200 billion ringgit (45.152 billion US dollars) for the first time, an increase of 9.4% year-on-year.
As one of the main tropical timber exporting countries, Malaysia’s main target market is concentrated in Asia. At the end of last year, the Sarawak government in Malaysia stated to increase the export revenue of wood products to RM8 billion per year by 2030. This export target focuses on producing high value-added products, such as furniture, engineered wood products (such as engineered wood and plywood), and some bamboo products, which require strengthened research and product development. It can be seen that there is still significant development space for Malaysia’s timber and furniture export industry in the coming years.
Although the system has not yet had a significant impact on the timber trade between the two countries, the adoption of electronic systems between enterprises in the two countries will make it possible to simplify customs clearance processes and reduce storage costs in Chinese ports, which is good news for the timber import and export industry.
Overall, China still has a significant demand for imported wood, and with the help of blockchain technology, the cost and price of Malaysian wood products exported to China are expected to decrease in the future. At that time, the competitiveness of Malaysian wood in the Chinese market may increase.
