Alibaba Group on Friday signed a new agreement aimed at bolstering a proposed e-trade link between China and Malaysia.

Alibaba, state-run development agency Malaysia Digital Economy Corp. (MDEC) and the Hangzhou municipal government signed a memorandum of understanding to connect the first two hubs in the Electronic World Trade Platform in Hangzhou and Kuala Lumpur. The signing took place during a visit by Malaysian Prime Minister Najib Razak to Alibaba’s Xixi headquarters.

The eWTP is Ma’s vision of digital free trade via e-commerce as a way to bring small and medium enterprises into the global economy. Last year, Alibaba helped to set up a pilot free-trade zone in Hangzhou from which to launch the eWTP. In March, the government of Malaysia created its own digital free-trade zone in Kuala Lumpur to serve as the first such e-hub outside of China.

Now, the parties will “explore linkages” between the Hangzhou and Kuala Lumpur projects to create an “e-road” for cross-border trade.

“With the creation of eWTP, we hope to enable the building of infrastructure to empower SMEs and young entrepreneurs so they would have as great a chance to succeed in this era of data technology as their multinational counterparts,” Ma said in a statement.

“The link-up of the first e-hubs in China and Malaysia today has opened up a gateway to global success for small businesses in the two countries. It is our hope that more and more SMEs around the world will benefit from a more-level playing field,” he said.

What Is the eWTP?

In addition to looking for ways to best connect the two hubs, the parties agreed to make it easier for SMEs in China and Malaysia to access customs clearance, inspection and permits for cross-border e-trade. That builds on MOUs signed in March between Alibaba and its affiliate companies and various government agencies and private companies in Malaysia to support the launch of the digital free-trade zone in Kuala Lumpur.

Those agreements included the initial provision to create an online trading platform to link the Malaysian capital to Hangzhou. There are also plans to build a fulfillment facility in Kuala Lumpur dedicated to e-commerce in Southeast Asia, provide e-payments and financing for Malaysian SMEs and offer training programs for skills relevant to Malaysia’s growing digital economy.

Alibaba offered a progress report on those initiatives thus far:

• Its business-to-business division has launched its Malaysian SME onboarding and external trade promotion program, in addition to working with local universities to offer e-commerce training to SMEs.
• Its business-to-consumer division will support Malaysian manufactures and merchants to sell their products globally.
• Logistics affiliate Cainiao Network and Alibaba-owned Lazada Group will partner with national postal service Pos Malaysia to launch a regional e-commerce distribution center later this year.
• Ant Financial increased its partnerships with Malaysian banks and financial institution to six from two.
• Alibaba Cloud announced that it would also open a data center in Malaysia.

In Friday’s statement, Prime Minister Najib said that e-trade initiatives such as these with China were critical to sustaining the economic growth of Malaysia.

“It is therefore exciting to witness the forming of a partnership between government and reputable private enterprises, who will work together to lay the foundation for a more efficient conduct of cross-border trade in the internet age, to the benefit of all,” he said.