Malaysia launches all-encompassing AI infrastructure project

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The Malaysian government has launched the region’s first all-encompassing AI ecosystem which it says will ensure data is processed locally, safeguarding user privacy and data security.

Ministry of Communications Deputy Minister Teo Nie Ching said the new Strategic Artificial Intelligence Infrastructure marks an important step in the country’s AI development.

She said: “The special thing about this project is that the data will be stored in Malaysia, it will be managed by Malaysians, and it will be used by Malaysians as well, so this is how we can actually safeguard our AI sovereignty.

“Now it’s no longer like the cloud or the data centre is overseas, it’s purely in Malaysia – server also in Malaysia, managed by Malaysia, and the AI agents will also be developed by Malaysians. I think this is how we can localise the AI application in Malaysia,” she said.

Teo said the project was the first of its kind outside China, adding: “We are very proud, meaning that in terms of AI adoption and AI application, Malaysia indeed truly will be the leader in Asean, in terms of AI application and adoption.”

The platform is designed to empower the government, businesses and universities to leverage AI in improving services, boosting productivity and driving innovation. It offers 20% higher performance and 30% energy savings compared to industry peers, and hosts the DeepSeek open-source large language model, making it the first national-scale sovereign LLM deployed in Malaysia.

Early adopters include the Prime Minister’s Office, the Ministry of Communications and Universiti Teknologi Malaysia.

Teo also announced the launch of the Malaysia-China Trusted Data Zone, the first bilateral corridor linking Cyberjaya, Malaysia and the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area. It is designed to enable seamless cross-border AI development through infrastructure, joint innovation platforms and digital capability integration.

Malaysian online sellers reluctant users of AI

The launch comes as a new survey reveals that only 25% of Malaysian online sellers have integrated AI into their business operations.

Research by e-commerce platform Lazada Malaysia found that while 69% of Malaysians show strong familiarity with AI, at least one in two Malaysian sellers remains sceptical about its usefulness.

The platform’s chief operating officer, Ángel Ramiro, said key barriers to entry include cost concerns, time investment and resistance to change, with nearly 67% of employees preferring familiar manual processes.

“We understand this gap and recognise that our sellers need a strong support system beyond offering powerful tools.

“Our seller learning platform, Lazada University, and the Seller Ambassador Programme, which provides peer-to-peer mentorship, are some ways we support AI adoption.

“We have also launched a playbook to help sellers assess their AI readiness and discover how they can use AI on Lazada to drive business success,“ Ramiro said.

He added that the online e-commerce platform has launched the Online Sellers Artificial Intelligence Readiness Playbook – a strategic guide to help sellers understand where they are on their AI journey and map out clear, actionable steps for adoption at their own pace.

The playbook offers sellers insight into their AI-readiness under three archetypes – AI Agnostics, Aspirants and Adepts – while highlighting operational gaps they can bridge with AI. It also outlines key AI solutions they can leverage, with direct access to resources and tutorials for maximising Lazada’s built-in AI-powered tools and features.

“AI is a key priority for us, and we are focused on closing the adoption gap by upskilling the local seller ecosystem and equipping them with powerful yet easy-to-use tools. Our digital AI solutions are designed to be genuinely inclusive for sellers across Malaysia, operating from Kuala Lumpur or a small town in Pahang.

“With only 15% of Malaysian online sellers classified as ‘AI Adepts’, most micro-entrepreneurs and rural businesses can benefit from our infrastructural and educational support,” Ramiro said.

More Indian start-ups benefit from tax exemption scheme

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The Indian government has approved a tranche of 187 start-ups for tax exemption under the revamped Section 80 of the IAC framework.

With the latest approvals by the Department for Promotion of Industry and Internal Trade (DPIIT) more than over 3,700 Indian start-ups have now benefited from the scheme since its launch.

The tax exemption initiative – under the revamped Section 80-IAC of the Income Tax Act – aims to provide fiscal relief for emerging businesses, encouraging innovation and supporting job creation across the country.

In a statement, the DPIIT said latest the approvals came during the 79th and 80th meetings of the Inter-Ministerial Board (IMB), with 75 start-ups cleared in the 79th meeting and 112 in the 80th.

Under the revised framework, eligible start-ups can claim a 100% income tax deduction on profits for any three consecutive years within a 10-year period from their date of incorporation. The Union Budget 2025–26 extended the eligibility window, allowing start-ups incorporated up to 1 April 2030 to claim the benefit.

To qualify, start-ups must be recognized by the DPIIT, operate as a private limited company or limited liability partnership, and have an annual turnover not exceeding Rs 100 crore (£8.76m) in any previous financial year.

The DPIIT has also simplified and sped up the application process, ensuring that complete applications are reviewed within 120 days. Start-ups that were not approved in the latest round are encouraged to review and strengthen their applications, focusing on technological innovation, market potential, scalability, and their contribution to employment and economic growth.

“These steps underline the government’s ongoing commitment to nurturing a vibrant, innovation-led start-up ecosystem in India,” the DPIIT said.

The government has also doubled the guarantee cover under its Credit Guarantee Scheme for Startups (CGSS), raising the limit per borrower from Rs 10 crore to Rs 20 crore, a move aimed at easing credit access for start-ups and driving innovation in priority sectors.

The revised scheme also increases the guarantee cover to 85% for loans up to Rs 10 crore and 75% for loans above that threshold. The government is positioning the expanded coverage as a way for start-ups to secure working capital, term loans and venture debt, key to sustaining R&D and product development.

As of December 2024, the DPIIT had recognized 157,000 entities as start-ups. Since the launch of the Startup India initiative on 16 January 2016, these start-ups have generated over 1.55 million direct jobs, according to government figures.

Industry experts have welcomed the move. “This will give start-ups much-needed breathing room to innovate and scale up without the immediate pressure of tax burdens,” said Vinod Kumar, president, India SME Forum.

“Combined with improved access to credit, these measures create a supportive environment that can help Indian start-ups compete globally.”

India ‘must speed up merger process’

India’s regulatory frameworks must facilitate swift and seamless approvals for mergers (or combinations) that pose no harm to competition, while also maintaining rigorous oversight, Finance Minister Nirmala Sitharaman has said.

Speaking at the recent 16th Annual Day of the Competition Commission of India (CCI), Sitharaman said: “Delays in regulatory clearances can lead to uncertainty, disrupt commercial timelines, and potentially erode the intended value of transactions.”

The CCI allows automated approval for combinations that are deemed to have no appreciable adverse effect on competition in order to reduce transaction costs and timelines for benign mergers and acquisitions under its green channel mechanism.

“Regulators must be guided by the principle of ‘minimum necessary, maximum feasible’ in order to balance regulatory vigilance with a pro-growth mindset,” Sitharaman said.

The Finance Minister said that the ability of the antitrust watchdog to strike a balance between regulatory vigilance and a pro-growth mindset will be integral to building a resilient, equitable and innovation-driven economic framework in India.

“In an export-challenged, environment-challenged, energy-challenged, and emissions-challenged world, the increased reliance on domestic growth levers requires ensuring the right balance of regulation and freedom,” she added.

China cuts key rates lending rates to boost economy

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China has cut benchmark lending rates for the first time since October, while major state banks lowered deposit rates as authorities work to ease monetary policy to help buffer the economy from the global tariff wars.

The rate cuts are aimed at stimulating consumption and loan growth while still protecting commercial lenders’ shrinking profit margins, the government said.

The country’s central bank, the People’s Bank of China (PBOC), said the one-year loan prime rate (LPR), a benchmark determined by banks, had been lowered by 10 basis points to 3.0%, while the five-year LPR was reduced by the same margin to 3.5%.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

The lending rate cut was announced just after five of China’s biggest state-owned banks said they have trimmed their deposit interest rates.

Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of China reduced deposit rates by 5-25 basis points (bps), according to rates shown on the banks’ mobile apps.

The deposit rate reductions should guide smaller lenders in making similar cuts.

Marco Sun, chief financial market analyst at MUFG Bank (China), said the dual rate cuts were aimed at boosting credit lending and stimulating consumption. “The central bank is likely to switch to a wait-and-see approach in coming months unless external geopolitical risks deteriorate enough to extinguish hopes that the economy can stabilise,” Sun said.

The rate cuts are part of a package of measures announced by PBOC Governor Pan Gongsheng and other financial regulators before talks between China and the United States in Geneva in early May that led to a de-escalation in their trade war.

Global investment banks are raising their forecasts for China’s economic growth this year, after Beijing and Washington agreed to a 90-day pause on tariffs, despite uncertainty around China–U.S. trade negotiations.

“We still believe it will be quite challenging for Beijing to achieve its ‘around 5%’ growth target unless it rolls out a sizable stimulus package,” Ting Lu, chief China economist at Nomura, commented. “Considering the respite on the trade war, Beijing might be under less pressure to introduce the necessary stimulus and reforms.”

China welcoming more foreign companies

China has rolled out a set of measures to help foreign trade companies expand into the domestic market of 1.4 billion potential consumers to hedge against uncertainties of foreign business.

For China’s exporters, switching to sell in the domestic market comes along with challenges, including adapting to different standard and price systems and domestic consumer preferences.

The Ministry of Commerce, together with local governments and multiple enterprises, said it has been taking intensive actions to help foreign trade firms alleviate operational pressures and to help smooth the transition.

“The Ministry of Commerce will focus on helping 10 major provinces in foreign trade and consumption, and carry out a series of special matchmaking activities around key industries,” said Sheng Qiuping, vice-minister of commerce.

The activities have been launched in provinces such as Jiangsu, Hainan, Hubei, Hunan and Shandong. The events have mainly focused on helping industries with foreign trade advantages like light industry, household appliance, furniture and home furnishings, and food, according to the commerce ministry.

“As the world’s second-largest consumption market, China has the largest middle-income group in the world, with stable growth in investment and consumption and enormous potential,” said Xu Man, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

Multiple domestic online and offline retailers such as JD, Alibaba’s online trading platform 1688, as well as Yonghui Superstores, said they would like to provide more domestic sales channels for foreign trade firms facing export obstacles.

For example, 1688 said for foreign trade companies with inventory backlogs the platform will provide sales assistance services and reduce commissions.

Mainland small Chinese businesses on an upward trajectory

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The adoption of new technology and tapping into new markets helped small businesses on the Chinese mainland hit a five-year-high performance levels in 2024, according to a new survey by CPA Australia, one of the world’s largest accounting bodies.

Its recently released annual Asia-Pacific Small Business Survey found that 66% of small businesses on the Chinese mainland reported growth in 2024, while 71% expect to expand this year. Both results are at their highest level since 2019.

Innovation, improved business management and venturing into new markets have been crucial in shaping their positive business sentiment, as shown by the survey.

Meanwhile, the survey found that 74% of small businesses on the Chinese mainland anticipate local economic growth this year, exceeding the Asia-Pacific average of 67%, further boosting business confidence.

“The Chinese government’s supportive measures for private enterprises bolstered many small businesses to grow stronger and better last year,” said Lloyd Peng, CPA Australia’s North China Committee president. “Policies such as pre-tax super deduction for R&D expenditure and VAT exemptions for small-scale taxpayers have helped to foster a stable business environment and encourage businesses to continuously uplift their innovation capabilities.”

The survey also reveals that 88% of respondents from the mainland expect to introduce new products or services this year, 16 percentage points above the Asia-Pacific average. Additionally, 51% forecast that their overseas sales will grow this year.

“Innovation is a core competency among China’s small businesses. They are good at turning insights on customer needs and emerging trends into new products or services swiftly,” Peng said.

Their strong capability to provide value-for-money products or services will continue to win customers at home and abroad despite international trade uncertainties, Peng added.

CPA Australia collected 4,236 responses from small businesses in various industries across 11 markets in Asia-Pacific during November to December last year for this annual survey, including 757 respondents from Chinese mainland.

Education key to improving financial literacy of investors

Improving the financial literacy of ordinary Chinese investors will lead to more rational investment decisions and better long-term financial planning, according to investment experts.

Their comments follow a report that found Chinese people’s average score for financial literacy is 71.8 out of 100 at present, up from 68.7 a year earlier. They said progress can be attributed to a higher proportion of respondents with advanced education, efforts to address gaps in basic financial knowledge and increased awareness of financial risk and fraud.

The report, jointly compiled by Shanghai Jiao Tong University’s Shanghai Advanced Institute of Finance and global financial service provider Charles Schwab, has been published since 2022.

The latest results show a strong link between financial literacy and practical skills. In general, polled interviewees with financial investment experience score higher across all six gauges, including currency and banking, savings and investing, financial planning, safety and security, among others.

Improvements in financial literacy usually foster more rational and healthy investment practices, according to the report. For example, among the high-scoring respondents, 57% held positions for longer than one year, compared with only 45% among low-scoring respondents.

Respondents with higher financial literacy also build more diversified portfolios and are less likely to make speculative investments, according to the report.

Based on these findings, Wu Fei, a SAIF professor and the project leader, suggested tailor-made financial education for different groups.

“For the high-frequency and complex securities investments group, we can focus education on investment discipline, the risk-return trade-off, and risk awareness to help them avoid excessive speculative behaviour.”

Meanwhile, respondents with higher financial literacy demonstrate a better understanding of retirement planning as well as its necessity and different ways of saving for retirement.

However, long-term planning still needs encouraging in China. Only half of the interviewees said they have “a clear, specific and long-term financial plan”, slightly down from the ratio last year.

Even for adults aged between 26 and 45, who face complex financial needs and are at a critical juncture for retirement planning, only 55% of them have constructed a long-term financial plan.

According to Thomas Pixley, general manager of Charles Schwab (Shanghai), a long-term financial plan is especially important given the changing global economic landscape and the increasing market complexities. Such a plan can help individuals weather market fluctuations and avoid pain, he added.

 

Dubai to allow crypto payments for government services

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Dubai is to allow individuals and businesses to use cryptocurrency to pay for government services.

Dubai Finance (DOF) has signed a Memorandum of Understanding (MoU) with Crypto.com, a global cryptocurrency trading platform, to enable the payment of government services fees using cryptocurrencies.

It marks a significant step in advancing digital finance on a global scale in the UAE.

The agreement was signed at the recent Dubai FinTech Summit. The DOF said that the partnership “supports the implementation of the Dubai Cashless Strategy by enabling secure and efficient financial transactions through cryptocurrencies”, adding that the move also “paves the way for Dubai’s transition to a fully digital, cashless society by empowering the Government of Dubai to introduce a new digital payment channel across its official platforms”.

Abdulla Mohammed Al Basti, Secretary-General of the Executive Council of Dubai, said that adopting secure cryptocurrency solutions within the Government of Dubai’s payment system reflects a proactive approach to anticipating future needs and responding to global economic and financial developments.

Al Basti said: “Dubai continues to advance through co-ordinated efforts across government entities and key sectors to meet and exceed the expectations of individuals, businesses, and the wider community.

“As a global leader in digital transformation, the emirate is further strengthening its position by deploying the latest secure financial technology solutions that support its cashless strategy, streamline government transactions, and foster innovation in financial services.

“I extend my sincere appreciation to the Department of Finance for enabling new global partnerships that support the objectives of the Dubai Economic Agenda D33 and reinforce Dubai’s status as a global hub for innovation.”

Abdulrahman Saleh Al Saleh, Director-General of DOF, said: “We take great pride in Dubai Finance’s key role in driving the Dubai Cashless Strategy and shaping a distinctive digital financial future.

“We remain committed to collaborating with our partners across government entities and leading financial service providers to advance the digital payment ecosystem and develop innovative solutions that support the rapidly evolving digital economy.”

Eric Anziani, President of Crypto.com, said: “The Government of Dubai has been a true global visionary with its plans for a cashless society. We are proud to be selected to support Dubai’s Department of Finance as part of this initiative, which will see Crypto.com enable the delivery of the first comprehensive and holistic Government-wide implementation of payment digitisation.

“We are excited to bring our capabilities and innovative thinking to catalyse this progress and we recognise the exceptional vision of Dubai’s leadership in shaping the future of economic growth with ambitious programmes such as these.”

Amna Mohammed Lootah, Director of Digital Payment Systems Regulation, said: “The Dubai Cashless Strategy aims to strengthen the emirate’s position among the world’s leading digital cities, with a goal of conducting more than 90% of financial transactions across both the public and private sectors through cashless methods by 2026.

“The signing of this agreement with a globally renowned cryptocurrency platform marks a ground-breaking initiative, enabling government service users to pay all government fees through digital currencies – an unprecedented step in the global financial landscape.

“We are confident that this milestone will significantly accelerate the advancement of the Dubai Cashless Strategy.”

The Dubai Cashless Strategy is expected to drive economic growth by adding at least AED8bn ($2.2bn) annually to the economy, fuelled by the development of a wide range of innovative financial technology services and the accelerated expansion of Dubai’s fintech sector.

Once the necessary technical arrangements for the agreement’s activation are finalised, individuals and businesses customers of government entities will be able to pay service fees seamlessly through Crypto.com’s digital wallets.

The platform will securely convert these payments into Emirati dirhams and transfer them to Dubai Finance accounts, ensuring a streamlined, secure and innovative payment framework.

India’s MSMEs facing labour and access to credit challenges

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Around a quarter of India’s micro, small and medium-sized enterprises (MSMEs) say a lack of skilled labour is one of their major challenges, according to a new survey by the Small Industries Development Bank Of India (SIDBE)

It found that these shortages are particularly acute in sectors including defence equipment, ready-made garments, hotels and sanitaryware.

The SIDBI report, called ‘Understanding the Indian MSME Sector: Progress, and Challenges’, provides comprehensive insights into the rapidly growing MSME sector in India, based on both primary and secondary research. It includes industry, gender and regional-level analysis, drawn from a survey of more than 2,000 MSMEs across 19 industries.

In particular, the report provides insights into women entrepreneurship and sustainability initiatives, aligning with the Government’s focus on these areas. The study also offers an estimate of the credit gap in the MSME sector.

When it comes to access to credit, survey respondents consider timely and adequate credit access as one of their key challenges despite the comprehensive policy initiatives in that regard. While borrowings from informal sources are minimal for small and medium enterprises at 3% and 2% respectively, it is still relatively significant at 12% for micro enterprises.

The survey also found that 18% of MSMEs using digital lending platforms and 90% accepting digital payments, demonstrating “promising digital adoption”.

Increased credit supply to MSMEs is in evidence, the research found. However, the study broadly estimates that the sector still has an addressable credit gap of about 24%. The gap is higher in the services sector at 27%; it is estimated to be also higher at 35% for women-owned MSMEs, indicating a need for targeted government policy.

SIDBE found that women entrepreneurship has become a significant aspect in the MSME sector, with 26.2% in proprietary enterprises being owned by women as recorded in the Annual Survey of Unincorporated Sector Enterprises (ASUSE) of 2023-2024, signalling growing inclusivity.

Some 76% of the women-led MSME respondents have access to credit, but they continue to face higher challenges compared with their male counterparts, with 41% highlighting credit access and high competition as the largest obstacle to their growth.

According to the survey, a majority of the MSMEs have been slow to adopt modern channels to reach customers. Around 70% of respondents continue to use traditional modes of marketing, which hinders their scalability and ability to remain competitive. The report said: “Effective utilization of e-commerce and digital marketing can provide MSMEs with improved access to new markets and customers.”

However, the survey also found that inadequate infrastructure and technology adoption affects productivity and competitiveness; this is more prominent in sectors like auto components, iron and steel and transport and logistics. A significant proportion of the respondents cited technology adoption as a major obstacle to their growth.

When it comes to sustainability, more than one-third of MSMEs have adopted sustainable practices; 31% use energy-efficient systems, and 21% utilize renewable energy. However, 33% cite limited awareness as a key barrier to further adoption.

Tech challenges leave Indian accountants ‘overwhelmed’

The rapid pace of technology changes and impact of artificial intelligence on their roles has left Indian accountants overwhelmed, according to a survey by global accounting body ACCA.

The third annual Global Talent Trends Survey 2025 by the Association of Chartered Certified Accountants (ACCA) revealed that more than half of Indian accountants taking part in a global survey have flagged concerns of not being able to develop the required future skills due to the frequently changing technology.

“This concern is inversely proportional to seniority, where mid and junior-level professionals are more worried than senior leadership and board-level respondents,” the survey found.

Some 54% of India respondents are concerned about not developing the required future skills, higher than the global average of 50%. And only 37% of respondents said that their organisation was providing opportunities to learn AI-related skills.

“To thrive in the future workplace, a thorough understanding of technology is non-negotiable. I feel very excited to see that finance professionals are getting more comfortable with technology,” Emma Jindal, CFO of Accenture, India, said in the survey. Regarding hybrid and remote working models, the survey revealed that 45% of respondents from India were working in a hybrid model, while 41% of them were fully office-based. Out of those working from the office, only 13% prefer the model, while 75% prefer hybrid working.

Over 10,000 individuals from 175 countries, including India, took part in the survey which focused on issues ranging from career ambitions, hybrid working and inclusivity practices to upskilling, mental health and employability issues.

Digital innovation to drive China’s economy

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China’s focus on developing the digital economy and bolstering the application of artificial intelligence will drive industrial transformation and inject fresh impetus into the country’s tech development, according to officials, experts and business leaders.

Liu Liehong, head of the National Data Administration (NDA), said the country’s digital economy has gained strong momentum, with the added value of the core digital industries accounting for about 10% of GDP.

During Liu’s presentation at a forum of the 8th Digital China Summit in Fuzhou, capital of Fujian province, he said significant progress has been made in fields such as AI, integrated circuits, industrial software and basic software.

The number of China’s ‘lighthouse factories’, which represent the highest level of intelligent manufacturing, represents more than 40% of the global total, demonstrating the deep integration of data elements with digital technologies, especially AI, he noted.

Liu said the administration will enhance the core competitiveness of the digital economy, develop new quality productive forces in accordance with local conditions, support technological innovations and industrial applications of AI, and nurture new enterprises working in the digital economy.

More efforts will be made to promote the in-depth integration of the real economy and the digital economy, while strengthening international co-operation in the digital economy and facilitating the development of cross-border e-commerce, he added.

The Digital China Development Index – which records the country’s digital progress – climbed to 150.51 in 2024, up 10.65% from the previous year, according to the NDA’s national institute for data development.

Jiang Xiaojuan, a professor at the University of Chinese Academy of Social Sciences, said the internet, big data and AI have significantly enhanced the capabilities of data generation, transmission and processing.

However, Jiang said more efforts are needed to accelerate the sharing, development and use of public data and improve data governance systems “to further unleash the immense value of data elements”.

Industry experts also highlighted that AI is spearheading the development of the digital economy, and seamlessly integrating into every facet of industrial development and people’s lives.

Wu Hequan, from the Chinese Academy of Engineering, underscored the significance of advanced digital technologies in improving the production efficiency of enterprises and lowering operational costs, estimating that the revenue from AI software and services is projected to showcase an upward trajectory in the future and will serve as an important driving force for GDP growth.

“The revolutionary advancement of AI technology has become the key to promoting the sustainable development of human society,” said Huo Jia, vice-president of Alibaba Cloud Intelligence Group, the cloud computing unit of Chinese tech giant Alibaba Group.

Huo said the company is ramping up efforts to build intelligent computing power platforms; expand the application of AI models in a broad range of sectors including finance, government affairs, energy and healthcare; and boost industrial digital transformation.

 

NDB about to enter new ‘golden age’

The New Development Bank (NDB), the financial organisation that promotes the development of emerging markets and developing countries, is set to enter another ‘golden age’ as it advances its investment in infrastructure and innovation with China’s continued support, according to Dilma Rousseff, the bank’s president.

She made the comment after President Xi Jinping’s recent visit to the bank’s headquarters in Shanghai.

President Xi defined the NDB’s first decade from its establishment in 2014 as “a golden decade”, with the bank approving 120 projects and investing $40 billion in that time, according to Rousseff.

Xi suggested that the NDB continue to adhere to the principles that created the bank, which involve investing in the BRICS countries. It should invest in areas, including digital and social infrastructure, that will make a difference in developing countries and emerging economies, said Rousseff, quoting Xi.

The Chinese president underlined the importance of continued investment in innovation and technology, and that the NDB should grow into a modern bank by using all possible digital instruments available, including artificial intelligence and big data.

By keeping the NDB’s commitments, as Xi has suggested, the bank will head for “the second golden decade”, she added.

The NDB was founded by Brazil, Russia, India, China and South Africa (the original BRICS) in 2014 with the purpose of mobilising resources for infrastructure and sustainable development projects in emerging markets and developing countries. It was formally opened in July 2015.

In 2021, the NDB began expanding its membership and admitted Bangladesh, Egypt, the United Arab Emirates and Uruguay as new member countries.

AI ‘to reshape Malaysia’s economic landscape’

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Artificial intelligence (AI) is set to significantly reshape Malaysia’s economic landscape, presenting not only challenges but also ground-breaking opportunities for growth, job creation, and innovation.

That’s the view of Georg Chmiel, co-founder and chair of Juwai-IQI, executive chairman of Chmiel Global Advisory, and board member of World Digital Chamber, who cited recent studies as saying that AI has the potential to boost Southeast Asia’s GDP by $1 trillion with Malaysia leading the way in this transformation.

A 2024 report from the Department of Statistics Malaysia (DOSM) estimates that 600,000 workers may lose their old jobs over the course of the next three to five years as AI replaces clerical, administrative, and some manufacturing jobs.

Globally, 85 million jobs are likely to be lost while 97 million new ones are to be created, demonstrating that strategic workforce management and proactive protective reskilling plans are necessary.

In the case of Malaysia, applying AI does not stop at giving advanced machines to do the work but to improve the people that work, in order to create more high-value jobs, Georg Chmiel said.

He added that by prioritizing AI literacy and comprehensive reskilling initiatives, Malaysia can transform potential disruptions into significant opportunities, ensuring its workforce thrives in the dynamic digital economy.

Chmiel said that the next five years were “absolutely critical to position Malaysia as a leader in the AI revolution”.

Acknowledging the profound impact of AI, the Malaysian government is taking decisive steps to leverage its transformative potential while proactively addressing the challenges posed by job transitions. Minister of Communications and Digital Gobind Singh Deo has described it as a cornerstone of the nation’s economic growth strategy.

 

Malaysia GDP growth slows despite strong services sector

Malaysia’s GDP growth is estimated to be 4.4% in the first quarter of 2025, a slight decline from the 5% recorded in the previous quarter, according to Chief Statistician Malaysia Dr Mohd Uzir Mahidin.

Growth continues to be underpinned by the services, manufacturing and construction sectors, while the mining and quarrying sector remained on a declining trajectory, he said.

However, on a quarter-on-quarter basis, he said the economy contracted by 3.7%, against a 2.7% expansion in the fourth quarter of 2024.

Continuing its upward trajectory, Malaysia’s industrial production demonstrated moderate growth in February 2025. The Industrial Production Index (IPI) rose by 1.5%, largely driven by a notable 4.8% expansion in the manufacturing sector.

This positive performance outweighed declines in other sectors, notably mining and electricity, which recorded contractions of 8.9% and 2.8% respectively, the figures show.

When comparing month-on-month figures, the IPI experienced a drop of 6.8% in February, a sharp decline compared to a marginal decrease of 0.4% recorded in January 2025.

Looking at a broader perspective, Malaysia’s wholesale and retail trade sector achieved RM148.3 billion (£25.7 billion) of sales in February 2025, reflecting a growth of 5.1% compared with the same month in the previous year.

This increase was largely driven by strong performances in retail trade which grew by 5.9% and wholesale trade at 5.3%. In a similar trend, the volume index also experienced a year-on-year rise of 3.9%, with wholesale trade rising 4.9% and retail trade growing 4.3%. However, when compared to January 2025, the sector saw a slight decline of 0.4% in overall sales, primarily due to decreases in both wholesale trade (-1.9%) and retail trade (-1.5%). This indicates a slowdown in consumer activity month-on-month, despite the positive year-on-year performance.

In a climate of stable economic conditions, Malaysia’s inflation rate eased to 1.5% in February 2025, down from 1.7% in January. This moderation was primarily driven by slower price increases in key categories such as housing, water, electricity, gas and other fuels, which saw a growth of 2.3%, and recreation, sport and culture which increased by 1.5%.

Malaysia’s trade sector continued to demonstrate steady growth in early 2025, driven by strong performances in both exports and imports. In February 2025, Malaysia’s total trade increased by 5.9% year-on-year, reaching RM223.9 billion. This growth was largely fuelled by a 6.2% rise in exports, which amounted to RM118.3 billion, alongside a 5.5% increase in imports, totalling RM105.6 billion. As a result, the trade surplus saw a significant boost, rising by 12.2% to reach RM12.6 billion.

“The country’s labour market continued to show strength, with the number of employed persons rising by 2.9% year-on-year to reach 16.73 million in February 2025. This growth led to an increase in the employment-to-population ratio, which climbed to 68.5%, up from 68.2% in the same period last year,” said Mohd Uzir.

“The labour force also expanded by 2.6%, reaching a total of 17.27 million, supported by a slight increase in the labour force participation rate which rose to 70.7%.

India ‘offers strong growth and stability’, says RBI Governor

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India offers strong growth and stability for investors looking for long-term value, Reserve Bank of India (RBI) Governor Sanjay Malhotra has said.

He said the country continues to be an economy supported by stability, pointing to monetary, financial and political policies; a flexible and supportive business environment; and strong macroeconomic fundamentals.

The Governor said: “At a time when many advanced economies are facing economic headwinds and a deteriorating economic outlook, India continues to offer strong growth and stability making it a natural choice for investors seeking long term value and opportunity.”

Malhotra, speaking in Washington DC at the recent US-India Economic Forum, organised by Confederation of Indian Industry (CII) and US India Strategic Partnership Forum (USISPF), added: “Our strong domestic demand and relatively lower dependence on exports cushions the Indian economy from external spillovers.”

India’s domestic demand contributes about 90% to GDP, whereas merchandise exports contribute about 12% of GDP, which is much lower compared with countries with similar economies.

The Governor highlighted that India offers a policy ecosystem that is transparent, rule-based and forward-looking —ideal conditions for long-term and productive investments.

“As the world’s fastest-growing major economy, India is not just a destination for investment – it is a partner in prosperity,” he said, while asking global investors to collaborate and invest in India.

The country’s financial markets offer seamless entry and exit for foreign investors, reflecting the maturity of its economy, he added.

Malhotra said the country’s banking sector, with its healthy balance sheet, strong profitability, lower non-performing assets and adequate capital buffers is poised to meet organisations’ investment needs.

He said that the Indian economy has seen an average annual growth rate of 8.2% over the past four years (2021-22 to 2024-25).

“Even this year (FY2026), our growth is expected to remain robust at 6.5%. This is despite the tremendous increase in uncertainty and volatility in global financial markets. While this rate is lower than in recent years and falls short of India’s aspirations, it remains broadly in line with past trends and the highest among major economies,” the Governor said.

US – China tariffs ‘could have implications for India’

Worsening trade ties between the United States and China have raised hopes of more US-bound orders shifting to India, with China’s Ministry of Commerce saying it is “evaluating” the possibility of initiating tariff negotiations with the US.

“China has noticed that the senior leadership of the United States has repeatedly stated that it is willing to negotiate with China on tariff issues. At the same time, the United States has recently taken the initiative to convey information to China through relevant parties, hoping to talk to China. In this regard, China is evaluating it,” the Ministry said in a statement.

This comes as Indian exporters have started receiving more orders and inquiries from US clients, amid elevated tariffs on Chinese goods.

Indian exporters told The Indian Express that the availability of shipping containers — which had been a constraint — is beginning to improve due to the cancellation of several Chinese shipments to the US. However, any return to normality between the US and China could slow the shift in business towards India.

Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), said several Chinese exporters have reached out to Indian suppliers for help in fulfilling US orders, as they do not wish to lose their US clients. A deal that results in lower Chinese tariffs may potentially weaken the role of Indian suppliers.

The biggest shift so far has been in the electronics sector. Apple CEO Tim Cook said that the majority of iPhones sold in the US during the third quarter of 2025 will be exported from India. However, he added that he could not offer a longer-term outlook due to the evolving trade war between the US and China, where Apple currently manufactures most of its products.

Richard Baldwin, Professor of International Economics at IMD Business School, said that if high tariffs on China remain, it would be advantageous for large emerging markets.

“China was a big competitor before, and it has now been hobbled,” he said. However, he pointed out that the now-deferred reciprocal tariffs did not cover pharmaceuticals and electronics — two sectors where India could have benefited most.

“From a geo-economic perspective, anything that’s bad for China is good for India,” Baldwin added.

New academy to boost AI education opens in Dubai

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A new academy designed to widen the breadth and scope of education around AI has been launched by the Dubai AI Campus.

The Dubai AI Academy was unveiled at the Dubai AI Retreat, held as part of the inaugural Dubai AI Week, at the Museum of the Future, where over 150 government leaders and global AI experts gathered to discuss AI integration across sectors.

Dubai AI Campus – launched last year – is the largest dedicated cluster of artificial intelligence and advanced tech companies in the Middle East, Africa and South Asia region, located in the DIFC Innovation Hub.

The Dubai AI Academy, which is aiming to provide AI education for 10,000 emerging and experienced leaders, said its learning programmes will be delivered in partnership with world-class academia and training providers. The initiative is designed to broaden the pool of talent capable of advancing adoption of AI across future-focused industries.

“The Academy will offer unique training and certifications, tailored to match the objectives and skill requirements of civil servants and the private sector. This includes, for instance, the ability to understand AI, identify and implement AI use cases, and utilise AI as a strategic capability of organisations, including ethical aspects,” it said. “The Dubai AI Academy is a vital step that supports the goal of doubling Dubai’s economic growth and increasing AI’s contributions to the emirate and the UAE’s GDP.”

McKinsey’s research sizes the global long-term AI opportunity at $4.4 trillion in added productivity growth potential from corporate use cases.

Commenting on the launch, Arif Amiri, Chief Executive Officer of DIFC (Dubai International Financial Centre ) Authority said: “The Dubai AI Academy is yet another milestone in our journey to advance the Dubai Universal Blueprint for Artificial Intelligence (DUB.AI).

“To stay competitive in this fast-evolving world, organisations must prioritise AI and ensure its adoption within the workforce. This will give them an edge over other organisations, helping them drive operational efficiencies and transform their business models. The Dubai AI Academy will create a pool of AI talent who will accelerate the adoption of AI applications within all sectors, solidifying Dubai’s status as a preferred global destination for AI, innovation and technology companies.”

One of the first programmes will be ‘AI for Civil Service’, which will be accessible to all government employees in partnership with US not-for-profit educational organisation Udacity. Dubai AI Academy has also partnered with the Minerva Project to deliver ‘Leadership in the Age of AI’, which will equip participants with durable, transferable skills to lead teams, navigate complexity, and make informed, ethical decisions in an AI-enabled world.

Building on ongoing collaborations on leadership and talent development, the Academy is also collaborating with the University of Oxford’s Saïd Business School.

More information on the Dubai AI Academy and its current programmes is available at: http://dubaiaicampus.com/dubai-ai-academy

 

‘Digital Wallet’ launch to boost digital transformation

A ‘Digital Wallet’ has been launched as part of the UAE’s digital services package, in line with the Emirates’ strategy for the comprehensive digital transformation of government services.

The initiative came from the Ministry of Human Resources and Emiratisation (MoHRE), in partnership with Abu Dhabi Islamic Bank.

The ‘Digital Wallet’ allows corporate customers to make payments for MoHRE’s services and settle fees and financial obligations instantly. By linking the Ministry with the bank, the wallet offers fully integrated financial services that enhance service efficiency and deliver added value to users.

Mohammed Saqr Al Nuaimi, Assistant Undersecretary for Support Services at MoHRE, called on companies to register for the ‘Digital Wallet’ on MoHRE’s platforms via the Electronic Wallet Registration for Companies service. Companies may begin using the wallet for payments upon approval of the registration request by the bank.

He added that the launch of the wallet is the first phase of the service, which will be expanded to include multiple bank options in due course. “This will support financial inclusion and align with the ministry’s strategy to enhance labour market efficiency, ease of doing business, competitiveness, flexibility and attractiveness – consolidating the country’s position as a leading hub for investment and business,” he said.