Scam rampant, become a ‘scamdemic', with victims being forced to commit online crimes also believed to have set up scam centres in Malaysia

Cause for concern: The actual number of Malay­sians who have fallen victim to job scams is unknown, although the Malaysian International Huma­nitarian Organisation, an NGO that assists in rescuing Malaysians from such scams, claims that there are at least 1,000 Malaysians in Myanmar alone.© Provided by The Star OnlineMalaysia is  experiencing a “scamdemic” with victims being forced to commit online crimes under the threat of violence. International syndicates are also believed to have set up scam centres in Malaysia, saye a United Nations report following recent findings from a survey carried out by a group of academics on Malaysians’ awareness of the matter.

PETALING JAYA: Not only is Malaysia suffering from a “scamdemic” with citizens continuing to fall victim to job scams, but the country is also believed to be the location of scam centres with international syndicates having set up operations here, according to a United Nations report.

Coined by the United Nations Office on Drugs and Crime (UNODC) after the Covid-19 pandemic in 2021, the term “scamdemic” has gained traction as scam cases surge, particularly in countries like Cambodia, Myanmar and Laos.

In its latest policy brief, UNODC says international NGOs have identified over 40 nationalities of trafficking victims in scam parks in South-East Asia, including Malaysians.

These scam parks, a gathering of criminal organisations specialising in financial fraud and human trafficking, are known to deploy operatives who excel at running job scams, among others.

ALSO READ : ‘Greed and risky mindset lead to more victims’

While there is no accurate data on the number of victims trafficked for forced criminality, it is estimated that between 10,000 and 100,000 predominantly young men and women from Asia had been trafficked and forced to commit online scams and fraud, says the report.

The actual number of Malaysians who have fallen victim to job scams is unknown, although the Malaysian International Humanitarian Organisation, an NGO that assists in rescuing Malaysians from such scams, claims that there are at least 1,000 Malaysians in Myanmar alone.

At the recent parliament sitting, Deputy Foreign Minister Datuk Mohamad Alamin said 518 Malaysian victims of job scam syndicates had been rescued as of Nov 3, and that the ministry is identifying another 26 in Laukkaing, Myanmar.

In the same policy brief, UNODC also suggests that scam parks exist in Malaysia, following reports from trafficking victims who had escaped over the last three years. However, the report does not provide details on the existence of the scam parks.

“Since early 2021, an increasing number of stories started to emerge of trafficking victims escaping from scam compounds in countries such as Cambodia, Laos and Myanmar and even Malaysia,” says the report.

UNODC says concerns over citizens being trafficked and severely mistreated, primarily in scam compounds in the Golden Triangle (the area in which the borders of Myanmar, Thailand, and Laos meet), were also expressed to the body and other UN agencies by several governments in the region.

UNODC says the victims related similar stories of how they were lured by lucrative job offers, only to find themselves forced into modern-day slavery to work as scammers themselves. They tend to be working in casino complexes or highly guarded buildings.

“After travelling to or within the destination country, they were confined to large casino or hotel complexes, or other secure buildings tailored to harbour or confine victims, where they were forced, for up to 15 hours a day, to conduct online scams.

“These online scams and fraud, committed primarily by trafficked persons under duress, have defrauded thousands of scam victims around the world of, on average, US$169,000 per victim,” says the report.

Universiti Tunku Abdul Rahman’s Tun Tan Cheng Lock Centre for Social and Policy Studies chairman Dr Chin Yee Mun said it can be concluded that Malaysia is indeed experiencing a “scamdemic” following recent findings from a survey carried out by a group of academics on Malaysians’ awareness of the matter.

“Firstly, our survey shows that nearly 40% of the respondents have encountered scams, and about the same percentage have someone in their social circle who had undergone similar experiences,” he said.

“Secondly, we have similar experience or have someone in our social circle who encountered scammers or has been scammed.”

Universiti Teknologi Mara Perlis’ Dr Azhar Abdul Rahman said that although the number of Malaysians who remain trapped in scam parks is uncertain, there may be many more, judging from the continuous reports of rescued victims.

“These scammers are always prepared with their plans to entice the gullible with (jobs that offer) easy access to wealth,” said Azhar, who was part of the team that carried out the survey.

But Malaysians are not new to experiencing job scams, said crime analyst Kamal Affandi Hashim.

“Malaysia has long been suffering from this ‘scamdemic’. And Malaysia is not alone as the whole world is facing this problem.

“The only difference now is that this matter is being put under the spotlight. The scammers are also technologically savvy and sophisticated in reaching out to potential victims,” he said.

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Roshaidi (right) and his friend refused to work as scammers as told by the syndicate

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Scam parks: No promised land

The map shows locations of known or raided scam parks, including illegal casinos, in Cambodia, Lao PDR, and Myanmar as reported by regional law enforcement authorities as of June 2023.

THEY arrive at an exotic, foreign land with hope for a new life or new love.

But what they get is despair, and some even death, as they are locked up, tortured and forced into a life of cybercrime.

This is what happened to an estimated 10,000 to 100,000 predominantly young men and women who have been conned and held captive in the “scam parks” of South-East Asia, where they are forced to commit online scams and fraud, says the United Nations Office on Drugs and Crime (UNDOC).

Calling it a “scamdemic”, UNDOC highlights in its report, Casinos, cyber fraud, and trafficking in persons for forced criminality in South-East Asia, that the huge scamming “industry” has swept across the region in the wake of Covid-19.

According to the report which was released in September, the scam parks – also known as fraud factories – are run by transnational organised crime syndicates taking advantage of the existing casino and Special Economic Zone (SEZ) infrastructure in the Golden Triangle area, namely in Cambodia, Lao PDR, Myanmar, Vietnam and Thailand.

These syndicates are believed to be gangs from mainland China, Taiwan and Hong Kong, who due to the pandemic, were forced to close down or move their illicit operations, especially illegal casinos, to less regulated spaces such as conflict-affected border areas and the SEZ, as well as to the increasingly lucrative online space.

Covid-19 had also created the perfect conditions for this scamdemic to flourish with its “toxic combination” of unemployment, lockdown isolation, and increased social media use, says UNDOC.

With millions of migrant and expatriate workers stranded during the Covid-19 lockdowns, while thousands of millions others were confined at home, the pool of easy targets for job scams and other online fraud schemes only grew. Then as the region reopened in 2021, traffickers took advantage of those who had lost their jobs because of the pandemic and were desperate for work.

ALSO READ: Myanmar fraud-gang leaders arrested, chief criminal commits suicide

UNDOC says these organised crime groups have developed and implemented a sophisticated plan to scam people, utilising the latest artificial intelligence (AI) tools, including face swapping and voice replication to bypass banking security systems.

The scam park trafficking crime is also growing into a global problem as victims come not only from across the Asean region, East Asia and South Asia, but also further afield from Africa and Latin America.

The trafficked victims in turn are forced to scam thousands worldwide, very often their own countrymen. It is estimated that these online scams have defrauded thousands worldwide of an average US$169,000 (RM789,801) per victim.

According to another UN agency, the Office of the United Nations High Commissioner for Human Rights (OHCHR), these scam parks are also seeing a new type of victims.

An OHCHR report published in August says that while trafficking cases in South-East Asia used to involve mostly victims who had lower educational qualifications and worked in low-wage jobs, the latest findings show the trend now includes those who are well-educated – many previously held professional jobs and have graduate or postgraduate degrees.

Most are also IT-savvy and multilingual, fluent especially in English. (This is so they can trick scam victims more effectively, the report says.)

Many ensnared are also from supposedly more developed nations in the region such as Singapore and Taiwan.

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'CLICK TO ENLARGE'

OHCHR adds that while most of the trafficking victims are men, there are also women and young persons.

Luring them with the promise of stable jobs overseas, the traffickers arrange for the unknowing victims to travel to countries like Thailand and Myanmar, before smuggling them across the borders to Laos and Cambodia.

They are then taken to scam parks, which are secure buildings tailored to confine victims and operate these online scams, including large casinos and hotel complexes.

Once inside the scam parks, some of which are fenced with barbed wire, the victims’ passports are confiscated, and they are forced to work as scammers for up to 15 hours or more a day.

Those who try to escape are often beaten before being forced back to work.

There have been reports of trafficking victims being sold and moved from one scam park to another.

While thousands of victims have escaped, been rescued, and returned to their home country, say the UN agencies, overall, the problem is not abating, with new scam compounds being built and existing scam compounds expanding in size and geographical scope.

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Mutual trust and understanding essential: Lessons from China’s development model

 

China can also take the lead in regional good governance.

TO achieve international connectivity, close international cooperation and coordination is required at all times, said political analyst Bunn Nagara.

And this also requires a certain level of trust and confidence among countries, he stressed.

For China and Malaysia, however, this is being challenged by active disputes in the South China Sea between China and Malaysia’s Asean neighbours as well as other “security incidents”, said Nagara at the recent Friends of Silk Road forum organised by the Malaysia-china Friendship Association.

“Some of these altercations have been bitter and alarming, and steadily more incidents have affected Malaysia.”

Nagara said these are avoidable and costly problems which have a significant impact on regional policy.

“They are costly because without these unnecessary challenges, regional cooperation, integration and development would improve tremendously. They occur at great cost to all of us.”

Together, China and Asean countries can do much more and achieve greater heights of development, but political will and courage are needed to turn wise thoughts into reality, he said.

“Some argue that the South China Sea issue is a key hurdle to deepening our bilateral relationship but I don’t think that because this comes from history and this can be discussed and resolved diplomatically.

“The immediate problem is not the conflicting claims, which have been there for years and will still be there for years to come. The outstanding problem is the possible actions that happen can be a very dangerous situation.“

“Closer cooperation and coordination are key, and whether and how far we can progress and succeed on these issues remain to be seen. I hope we have the political will to do what is necessary for all our interests in this region. I also hope that we can all work more closely together to achieve these necessary ends.

“For example, China and Asean should have quiet diplomatic discussions, away from all the publicity, so that we can talk frankly and quietly behind the scenes, so that others may not intervene.”

Another area where China can take the lead is in regional good governance, Nagara said.

“China could help us as well in terms of showing what kind of governance is needed to ensure sustainable economic growth.”

He explained that an unfortunate aspect of rapid economic development in this region is corrupt practices and persons.

“China has done a very good job in clamping down on corruption, which many other countries would like to do as well. But since corruption is often an international crime with cross-border implications, governments need to work more closely against it. An effective regional anti-corruption regime will need efficient extradition laws to deal with suspected individuals and fugitives from justice.”

China can be a global leader in anti-corruption laws and action, said Nagara.

“No country can object to that, and all countries will then follow China’s positive leadership in this effort. Many of these solutions are vital and not difficult to implement, given the political will.

“They are necessary if greater economic growth, with more development through better regional integration, is to be assured.”

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Lessons from China’s development model

Comprehensive initiative: Farmer Wang Enhai loading baskets of green plum in Quanfa Village of Wushan County, China, for sale. Like many others in Quanfa, Wang managed to climb out of poverty through China’s targeted poverty reduction programme. — Xinhua/file photo

DESPITE the Covid-19 pandemic and the global economic stagnation in 2020, China managed to record 2.3% growth and a US$4.6tril (RM17.69tril) trade volume last year, becoming the only major economy to grow during the devastating year.

Already the world’s second largest economy with a GDP of US$14.7tril (RM61.92tril), it is no surprise that China managed to bounce back easily.

As Malaysia-China Friendship Association (PPMC) president Datuk Abdul Majit Ahmad Khan put it, China’s achievements in development are “spectacular”.

He noted, “This is clearly demonstrated in the transformation of the country’s status from a poor nation to a moderately prosperous one. It is a record in human history that a country has achieved so much prosperity and stability within the space of 40 years.

“From a ‘closed nation’, China today is an engine of regional and global growth. Its development model has provided opportunities for investment, trade, tourism, and China has become the global hub of supply chain, manufacturing, and services in trade.”

The question is whether China’s successful development model could be adopted elsewhere.

This has been the subject of debate among many analysts and was one of the discussion points of a recent Friends of Silk Road forum organised by the PPMC with the support of the Chinese Embassy in Malaysia entitled “The global significance of China’s develop-mental model”.

Held in conjunction with the 30th anniversary of the establishment of China-Asean relations, the aim of the webinar was to continue the ongoing dialogue and confidence- building over the years between Malaysia and China. It also provided an opportunity for reflection on the 100th anniversary of the Com-munist Party of China as well as China’s transformation in the context of Malaysia-China’s relationship.

“Malaysia and the Asean region have indeed gained tremendously from China’s transformation as reflected in the deep and strong economic linkages between the two regions,” said Abdul Majit.

Comprehensive poverty eradication

One area is poverty eradication, said Dr Ge Hongliang, deputy dean of the Asean College of Guangxi University for Nationalities in China.

Delving into the relationship between Malaysia and China, specifically Sino-Malaysian cooperation in poverty reduction, Ge highlighted that China’s poverty eradication programme is a topic that is important in the study of China and South-East Asia.

Relating his firsthand witness account of China’s development, Wang Yuzhu, director of Apec (Asia-Pacific Economic Cooperation) and East Asia Cooperation Center at the Chinese Academy of Social Sciences, said he could see China’s “economic miracle” in his own life’s journey – from his humble beginnings on a farm in a rural Chinese village to a comfortable life as a public servant.

Wang concurred that the republic’s comprehensive poverty eradication programme is one of the important factors underpinning the country’s rise.

“Based on current poverty standards, 770 million rural poor people in China have been lifted out of poverty since China opened up. This accounted for more than 70% of global poverty reduction population during the same period according to the World Bank’s international poverty standards,” he said, referring to the “China’s Practice in Human Poverty Reduction” white paper.

China’s poverty eradication initiative was effective as it was targeted, with meticulous planning such as precise project arrangements, inch-perfect measures as well as accurate use of funds, personnel and other resources, Wang noted.

There is a learning value from it for developing countries, including Malaysia, to achieve complete poverty reduction and modernisation, said Ge.

“This has undoubtedly created a useful basis for China and Malaysia to continue to strengthen cooperation on the poverty reduction agenda.”

Adding that extra attention needs to be given to the rural and less developed areas, he said China and Malaysia would be able to have mutual cooperation through this, specifically to develop agriculture.

 

Tourists enjoying handmade lanterns displayed by a handicraft company in Guangling County of Datong. Under China's poverty eradication programme, the company has helped over 200 impoverished residents to by providing them with occupational training. — Xinhua/File photo

Vital global role

There is a global significance to China’s rise, said Wang.

With its land and population size, China is an important part of the world, he noted.

“China is also the world’s factory – its exports account for about 16% of the world’s goods. Therefore, China’s problems are not only its own problems but also global problems. China’s development is an important part of world development.”

China would also need to play a big role in protecting the environment, he noted.

“We need strive to reach the peak of carbon dioxide emissions by 2030 and to achieve carbon neutrality by 2060, as put forward by the slogan ‘green water and green mountains are golden mountains and silver mountains’.”

Ultimately, said Wang, China and the world need to develop together.

“China adheres to the policy of good neighbour and friendship to safeguard regional and world peace. China also actively participates in regional cooperation, adheres to multilateralism, and promotes regional and global economic integration,” he said.

He added that China is also working together with other countries to build “a peaceful and prosperous community with a shared future for humankind” through the Belt and Road Initiative.

However, Wang believes China’s “development experience” is distinctly Chinese. He listed 10 points behind China’s rise which included upholding the party’s leadership, putting the people first, following the “Chinese path”, promoting a united front, and remaining committed to self-reform.

Independent political analyst and honorary research fellow at the Perak Academy Bunn Nagara gave an in-depth and comprehensive analysis of Malaysia-China relations and also the impact of China’s rise and how it has continued to reshape regional geopolitical dynamics.

He too noted that China’s development model is of great interest to almost everyone, from economists to policymakers and anyone with interest in political economy, strategic studies and international relations. It is also of great interest to people in many different countries in the developing world, in the developed world, among former colonies and former colonial powers, and among emerging markets.

“China’s development model is special and its development record is spectacular for the following reasons.

“Development is rapid, even for the large size of the country. It is essentially a hybrid endogenous model unique to China. Develop-ment does not derive from colonial conquests and plunder of other lands.

“China’s sheer size means the impact on many other countries is considerable.”

But there are important caveats in considering China’s development model, he said: “First, that China did not begin with a single and fixed model 100 years ago to arrive at where it is today. It began with a set of values, principles and goals, selecting and then adapting theory to suit local conditions at the time, with what is called Chinese characteristics.

“The process is grounded in pragmatism... and is evolutionary, incremental and revolutionary as the need arises at each stage. Periodic reflection and correction then helped to refocus policy towards the original values, principles and goals.”

Despite the historical hardships that China has endured, it has also been fortunate to be able to experiment and develop its own model of development, free from the pressures and conditionalities imposed by multilateral agencies on so many developing nations, Nagara added. Like other developed economies in East Asia, China has shown that it can overcome this development dependency trap.

Nagara feels that Malaysia and China can learn from each other.

“It is just as important for countries to avoid copying a development model from somewhere else as it is for any country to reject imposing its model on others. China has wisely chosen not to export its development model, even though other countries may learn from it.... But no one size fits all; we’ve got to learn from one another – pick and choose what fits us the best.”

Another Malaysian expert, Datuk Dr Irmohizam Ibrahim, who is an adjunct professor at Universiti Kebangsaan Malaysia and visiting professor at the Center of Malaysia Scholars in Huaqiao University, China, suggested ways in which Malaysia and China could work together to jumpstart Malaysia’s pandemic-stricken economy, including considering some opening up of the borders with a travel bubble.

Irmohizam also stressed the importance of passing the baton to the next generation to continue maintaining this bridge-building work that is ongoing between Malaysia and China.

“We should encourage further exchanges between China and Malaysia, specifically through people-to-people exchanges, especially the young,” he said. 

By HARIATI AZIZAN

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Malaysia's 'taiko' diplomacy in China sparks debate

 

Storm in a teacup: Hishammuddin’s ‘big brother’ remark when meeting Wang caused a stir in the country. — Photos: Xinhua

Hishammuddin (left) and his Chinese counterpart Wang at the signing of the historic MOU on the Establishment of a High-Level Committee to Promote Co-operation in the Post Covid-19 Era.

 

 

AT a recent joint press briefing in Fujian Province with his Chinese counterpart Wang Yi, Malaysia’s Foreign Minister Datuk Seri Hishammuddin Hussein said Wang “is my taiko (big brother)” after he described “Malaysia and China is a family” with broad smiles.

For both phrases, he had spoken in “broken” Mandarin before translating into English himself. And in response, a pleasantly surprised Wang Yi replied promptly in Mandarin “We are brothers”.

While this “big brother” remark on April 1 has sent Chinese social media into frenzy as this was interpreted as Malaysia’s strong respect shown towards China, the world’s second largest economy, it has whipped up a storm back home.

Amid this brouhaha focusing on the propriety of the phrases, the economic gains harvested by Hishammuddin in his refreshing display of charming diplomacy have largely been eclipsed. China’s nod to include Malaysian red palm oil on its import list had missed the news headlines.

In response to local criticisms, Hishamuddin has explained he was being respectful to the Chinese State Councillor and foreign minister, as the latter is older and a more seasoned diplomat. The elder brother is 67 years old, and younger is 59.

Hishammuddin had used this trip to express Malaysia’s appreciation to China for the latter’s help in fighting the Covid-19 pandemic. When the virus first hit Malaysia, China promptly sent masks and other personal protective equipment (PPE) to Putrajaya. Its medical teams also came to share their experience in fighting the noval virus.

In defending himself, the Malaysian top diplomat has argued the act of being respectful does not signify weaknesses.

However, his explanation has provoked more reactions and criticisms. Leading the attack on him are former Foreign Minister Datuk Seri Anifah Aman and Parliamentary Opposition Leader Datuk Seri Anwar Ibrahim.

“As Malaysia’s top diplomat, Hishammuddin should be more circumspect and tactful in his choice of phrase. Instead of trying to justify such wrong choice of phrase, Hishammuddin should have just accepted that he has committed a diplomatic faux pas.

“It was wrong enough to commit a diplomatic faux pas but to argue and try to justify it clearly showed the real character of the person, ” said Anifah, a Sabah leader who had served as foreign minister of Malaysia from 2009 to 2018.

Opposition politician Anwar urged Hishammuddin to apologise to the nation. He said the language and expressions used has put Malaysia as a “boneka” (puppet) to a foreign country.

But whether Hishimmuddin was being careless, commentators with sharp eyes could provide some leads. They pointed out his gestures and body language showed he was sincere with his words.

Chinese commentator Cheng Yue said on his YouTube post: “We can feel that the Mandarin words on ‘you are my elder brother’ was learnt before attending the press event.

“He was smiling as he uttered those words. It was meant for the ears of our government and people, as Malaysia needs Chinese help in its efforts to get its post-epidemic economy back to normalcy.”

Indeed, Hishammuddin is no stranger to the Chinese people. He is remembered as the Acting Transport Minister holding daily press conference at KLIA after the March 2014 disappearance of Beijing-bound MH730 airplane. Many had given thumbs up for his handling of the disaster.

Hishammuddin, who was defence minister during the rule of Barisan Nasional before it was toppled in May 2018, is generally seen to have enjoyed a close rapport with Beijing.

In 2019, when he was in the opposition, he had offered to help track down fugitive billionaire Low Taek Jho, rumoured to be hiding in China. Low was (and still is) wanted to help in the investigations into 1Malaysia Development Berhad (1MDB).

But while criticisms are aplenty for his “taiko” phrase, Hishammudin is not short of support.

Leading Chinese daily in Malaysia Sin Chew Jit Poh opines the Foreign Minister has not committed any wrong by showing respect and friendship to the host.

In its editorial headlined “Calling Wang Yi elder brother will not be self-dwarfing”, Sin Chew wrote last Tuesday: “We do not understand what wrong our Foreign Minister had committed. Did he sign any treaty deemed as insulting to Malaysia? Did he give away our sovereignty?”

The newspaper opposed calls for Hishammuddin to apologise to the country for his remarks. It said: “We have to be more broadminded. In our daily life, we address people we respect as ‘big sister’ or ‘big brother’. What is diplomacy? It is the use of a language skillfully to smoothen the process to achieve our goals in international negotiations.”

In fact, Hishimmuddin’s remarks have won praise from the most powerful Chinese foreign ministry spokeswoman Hua Chunying. In her regular media briefing the following day, she said: “Even separated by a screen, we can feel the warmth and close friendship of the two nations.”

To political observer Professor Dr Chin Yew Sin, the seasoned politician’s remarks could be interpreted from political and economic angles.

“On the one hand, our general election (GE15) is coming soon. From the political angle, he is playing with the China card to woo local Chinese votes. (About 30% of Chinese voters have not decided which party to support in GE15).

“On the other hand, Malaysia needs China to buy more palm oil to help revitalise our economy as it is facing problems with Europe. Post pandemic, we need more Chinese tourists coming. If not, you think Hisham will call China ‘taiko’?” While there may be doubt on China’s influence in GE15, Chin is right on the economic front.

As a government leader, Hishammudin knows the importance of China to Malaysia. The mainland is Malaysia’s biggest trade partner for 12 consecutive years. It has also been a significant source of foreign investment since the Barisan administration.

Despite the pandemic, China’s imports of Malaysian commodities and manufactured goods hit record high in 2020. This has resulted in a bigger trade balance in Malaysia’s favour.

In fact, some people believe Hishammuddin was exuding personal charisma to achieve the national goals for Malaysia.

As China’s economy is in the full swing now after recovering speedily from the pandemic, it is pertinent for Kuala Lumpur to deepen its economic cooperation with Beijing.

Last Wednesday, the International Monetary Fund raised its 2021 GDP growth forecast for China to 8.4%, up from 8.1% in January.

Hence, signing a pact to establish a Malaysia-China High-Level Committee on Post-Covid-19 Cooperation is a wise move, as Malaysia will stand to gain from cooperation rather than confrontation.

At the media briefing on April 1, Hishammuddin said this would “provide policy guidance for all aspects” of relations: trade and investment, food security, science/technology, travel and quality projects under the Belt and Road Initiative.

From this trip, Malaysia achieved a breakthrough in trade. Beijing agreed to allow imports of our red palm oil, which had previously failed to meet China’s colour specification standards. This gain is important as palm oil is a major export and foreign exchange earner for Malaysia.

The Malaysian Palm Oil Council (MPOC) recently projected that China would import 6.8 million tonnes of palm oil this year. Out of this, about 42% would be sourced from Malaysia.

China watchers say if Malaysia wants China to import more, it has to play its diplomatic card right. In this regard, Indonesia has outwitted Malaysia.

According to Xinhua News Agency, Wang said on April 1 China is willing to work with Malaysia to continue to promote high-quality Belt and Road cooperation in the post-epidemic period.

He also expressed China’s willingness to enhance cooperation on Covid-19 vaccine and drug research with Malaysia, adding that the two sides should enhance cooperation in fields including 5G, digital economy and modern agriculture.

According to a Nikkei report, Malaysia will become the second Chinese vaccine production base in the region, after Indonesia. These deals will help to promote greater acceptance of Chinese vaccines in this region and globally.

In this meeting, China and Malaysia also agreed on mutual recognition of “vaccine passports” to facilitate travel. For Malaysia, this will lay the groundwork to restart international tourism.

While the ‘taiko” remarks have caught the eyes of Malaysians and Chinese nationals, they might have also caught Washington’s attention.

On the eve of his visit to China, Hishammuddin received a call from US Secretary of State Antony Blinken, who “affirmed the key role of Asean-centrality in the Indo-Pacific and underscored the importance of promoting freedom of navigation, overflight and other lawful uses of the sea, including in the South China Sea”.

The Malaysian diplomat has described their conversation as “great”.

“Blinken appeared just as enthusiastic about Malaysia’s relationship with China, ” according to a comment by Nikkei.

Given that President Joe Biden has pledged he will prevent China from becoming the world’s “leading” and “wealthiest” country, and Washington is getting all its allies to encircle Beijing, it is no surprise that any activities linked to China will be monitored by US officials.

Asean leaders have generally chosen to stay neutral in the US-China confrontation. But they have to engage more with China – their closer neighbour that is overflowing with economic opportunities.

In fact, Wang’s meeting with Hishammuddin was part of his meetings with three other Southeast Asian nations from March 31 to April 3. The foreign ministers of Singapore, Indonesia and the Phillipines had held meetings with Wang separately on different days.

Wrapping up his series of meetings with the four Asean nations, Wang Yi told China’s state media that he has called on Southeast Asian nations to be on the alert for external forces interfering in coup-hit Myanmar, as its junta faces rising international pressure to return democracy to the people.

On these Asean meetings, the Global Times of China opines Beijing is overcoming US attempt at “encirclement.” It said: “It is actually very easy to break the so-called US encirclement. This encircling of China is a false proposition put forward by those who think too highly about themselves.”

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THE Regional Comprehensive Economic Partnership (RCEP), eagerly awaited by 15 member nations and their 2.2 billion people, was finally signed last Sunday after eight years of negotiations and delays.

This regional free trade agreement has injected hope into the economies of member nations as they struggle to contain the second wave of Covid-19 pandemic.

The biggest trade deal in the world signed on Nov 15 during a virtual summit in Vietnam will, among others, allow participating countries to enjoy major tariff cuts.

Covering 30% of the global economy and global population, the RCEP will broaden and deepen economic linkages across the Asia Pacific region, ease trade in goods and services and facilitate the flow of investments.

The Geneva-based United Nations Conference on Trade and Development (Unctad) believes that the RCEP could give “a significant boost” to foreign direct investment (FDI) in the region.

“The provisions related to market access and disciplines in trade, services and e-commerce are highly relevant for regional value chains and market-seeking investment,” said the UN body in its special issue on investment trends last Sunday.

With China being a participating nation, others within the bloc will be able to gain easier access to China’s vast market of 1.4 billion people, including its 400-million strong middle-class income group.

And China, being the largest economy in Asia, will find it easier to export its capital to Asean and other RCEP nations after having faced political barriers in its investments in the West in recent years.

The RCEP comprises 10 Asean members (Indonesia, Malaysia, Singapore, Brunei, Vietnam, Laos, Cambodia, Myanmar, the Philippines and Thailand) and five others in the region – Australia, China, Japan, South Korea and New Zealand.

Indeed, Singaporean Prime Minister Lee Hsien Loong’s remark after the signing could best summarise the importance and impact of the trade agreement.

He described the signing of the RCEP as a “major step forward for the world at a time when multilateralism is losing ground and global growth is slowing”, according to The Straits Times.

“It signals our collective commitment to maintaining open and connected supply chains, and to promoting freer trade and closer interdependence, especially in the face of Covid-19 when countries are turning inwards and are under protectionist pressures,” he added at the virtual conference hosted by Vietnam.

Premier Li Keqiang of China, which has been suffering from the US-led trade war, said the RCEP “is a victory of multilateralism and free trade” and “it let people choose unity and cooperation in the face of challenges, rather than conflict and confrontation.” In its analysis, Global Times said: “The conclusion of the RCEP indicates that most Asian countries endorse free trade framework and see it as a landmark step toward achieving closer economic integration in East Asia and South-East Asia.

“The RCEP sends out the message that Asian countries are not willing to blindly follow the US and exclude China from the region’s integration process. A sound and healthy economic community in Asia cannot be achieved without China’s participation.”

For China, the RCEP is the first multilateral free trade agreement it has ever participated in. China already has bilateral trade deals with many RCEP members, and it has been trying to seal an obstacle-filled trilateral pact with Japan and South Korea.

For Malaysia, the cheer is that the RCEP will provide greater access to regional markets and more opportunities for local small and medium-sized enterprises (SMEs) to expand into foreign markets, said Senior Minister Datuk Seri Azmin Ali.

The lowering of barriers and streamlining of rules in trade facilitation will boost Malaysia’s trade with RCEP countries and attract foreign firms keen on entering into a more integrated Asean, said the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM).

“This will enhance transparency in trade and investment, as well as facilitate the greater inclusion of Asean’s SMEs in global and regional supply chains,” said ACCCIM president Tan Sri Ter Leong Yap in a statement.

Wanita MCA national chairperson Datuk Heng Seai Kie said the RCEP provides “new hope for Malaysian entrepreneurs and national economic recovery to counter the current pandemic”.

“The RCEP trade deal will help stimulate the economy by integrating the various participating nations in the Asia-Pacific while introducing lowered tariffs, standardised customs rules and procedures and widened market access, especially among countries that don’t have trade deals,” she said in a statement.

Describing the free trade agreement as “an incredibly important agreement in terms of the timing”, Australian Trade Minister Simon Birmingham said: “This agreement signifies that our region is still committed to openness and to trade and that we will use that as a platform and a springboard for recovery in the post-Covid era… Better access for our farmers and businesses means more jobs for Australians overall.”

Birmingham noted that Australian businesses in education, healthcare, accountancy, engineering and legal service industries would benefit most from the deal, which will allow them to open offices in RCEP countries.

Most importantly, the trade pact may facilitate Australia’s exports to China – its largest trading partner – if Australia tones down its two-year long hostility towards Beijing. Canberra’s ongoing spat with Beijing has hurt Australia’s economy deeply.

For Japanese exporters, the agreement means that China and South Korea will gradually eliminate tariffs on sake and shochu, according to Japan Times. The reduction from China’s current 40% tariff on both will fall to zero after 21 years, and South Korea’s 15% tariff on both goods now will be eliminated after 15 years.

The RCEP may help reduce the adverse impact of trade wars waged on any member country in the deal, according to prominent YouTuber Yang Fong.

“Once the RCEP comes into force in two years, the US cannot simply wage trade wars on China and other members. The deal will also bring major changes to supply-chains in China and the region,” said the economic analyst.

While all member nations are excited about RCEP, India left the negotiation table last year.

In November 2019, Prime Minister Narendra Modi said the pact would not benefit India’s core interest. Indian dairy farmers, as well as SMEs, are worried of losing out to China in the trade of manufactured goods, and to Australia and New Zealand on dairy products.

But despite this, the RCEP welcomes the return of India once it is ready to join.

To the Western world, the concern is that the world’s largest trade deal has left out the United States.

“Notably, the agreement excludes the US and can potentially allow China to cement its position as a key trade partner for South-East Asia and other countries,” CNBC said in its report.

The US Chamber of Commerce in Washington has expressed concern that the US is being left behind in the world’s largest free-trade bloc, reported Reuters.

However, the absence of US in the RECP could be easily explained. The world’s biggest economy was never a part of the trade pact from the very beginning.

The RCEP’s formation in 2012 is seen as an Asean response to the Trans-Pacific Partnership (TPP), a US-led free trade agreement that excluded China – the world’s second largest economy and largest trading partner for most Asian countries.

At the beginning, TPP membership included the United States, Malaysia and several Asean countries, Japan, South Korea, Canada, Mexico and Australia.

While setting up the RCEP, Asean invited China, India, Japan, South Korea, Australia and New Zealand to be partners in this free trade agreement.

For countries like Malaysia that believe in multi-lateralism, they can gain tremendously from having membership in both US-led TPP and Asean-led RCEP.

However, when Donald Trump became president, he rejected multilateralism and the Trump administration withdrew from the TPP in 2016.

Trump’s “America First” policy and the trade wars he has waged against China and others have also raised doubts about the US’ willingness to trade with Asian countries on mutually beneficial basis.

Without US participation, the West is worried that China will dominate RCEP and expand its influence in the region.

China’s state-linked Global Times is prompt to supply answers and address the concern.

Noting that major US allies (such as Australia, New Zealand and Japan) are part of the RCEP, Global Times said: “China cannot dominate the attitude of these countries or Asean as many major US allies are in the deal.”

In fact, Japan and Australia – which have enjoyed very close ties with the US – are likely to keep a close eye on China in the RCEP, while championing their own interests in the deal.

Global Times added: “If China is the so-called winner this time, then it is a win-win situation for all other RCEP members because these countries have strived for their own benefits during the past eight years of negotiations. All countries can only be winners since they have signed this agreement.”

Analysis by HO WAH FOON wahfoonho@thestar.com.my 

 

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RCEP puts Malaysia on par with super economies

Azmin showing the RCEP agreement document during the signing ceremony witnessed by Muhyiddin on Nov 15. – fotoBERNAMA\

 ON behalf of the Government of Malaysia, I signed the historic Regional Comprehensive Economic Partnership (RCEP) agreement together with 14 other RCEP participating countries (RPCs).

Being an integral part of the week-long 37th Asean Summit, led by Prime Minister Tan Sri Muhyiddin Yassin, the signing of the RCEP agreement represents the high point of the summit which was convened virtually in its entirety.

Witnessing this momentous occasion, the prime minister said that the signing signifies to the world that Asean, with its five Free Trade Agreement (FTA) partners, places utmost priority on regional economic integration that facilitates cross-border trade, investments and the easing of non-tariff measures.

The signing is the culmination of eight years of arduous and protracted negotiations involving 31 rounds of negotiations, eight ministerial meetings and four summits.

Undoubtedly, it represents a significant and imperative milestone in the integration and revitalisation of economies of the 15 parties.

Further, this will also be a testament to the strengthening of the multilateral trading system as well as upholding the development agenda in the WTO.

Being the largest FTA in the world, covering 15 countries with 2.2 billion people or nearly a third (29.7%) of the world’s population, RCEP represents US$24.8bil or almost a third (28.9%) of the world’s GDP based on World Bank’s 2018 data.

With different economic development levels of all parties, RCEP will contribute to sustaining Malaysia as a preferred trading hub and investment destination.

To Malaysian businesses, it will mean tariff elimination and reduction for merchandise goods, including the facilitation of export and import of goods among the RCEP countries.

Service providers including e-commerce will be able to enjoy greater market access in terms of cross-border supply and establishing commercial presence in the RCEP markets.

In addition, RCEP will promote, facilitate and protect the investment climate of participating countries within the region. This also includes information exchange and promotion of transparency measures to facilitate business and investment within the RCEP area.

Realising that SMEs play a pivotal role to the backbone of every economies, RCEP could provide a level playing field between developed and least developed countries.

There is a specific chapter on SMEs providing provisions for information exchange and promotion of transparency measures to facilitate business and investment within the region, including providing economic and technical cooperation especially to SMEs.

RCEP can be an economic recovery tool against Covid-19 which will help to ensure opening of markets as well as uninterrupted supply chain.

The RCEP amalgamates and streamlines the existing Asean Plus One FTAs involving Japan, South Korea, China, Australia and New Zealand into an inclusive and comprehensive agreement that will enhance inter and intra-regional trade and investment, strengthen regional value chains, as well as facilitate transparency, information sharing and harmonisation of technical regulations and standards.

RCEP reflects our strong commitment for international trade, connectivity, rules-based multilateral trading system and enhancing free flow of trade and investment.

Datuk Seri Mohamed Azmin Ali Senior Minister Minister of International Trade and Industry

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