On April 16, 2025, during the visit of China’s President Xi Jinping to Malaysia, the two nations formalised an agreement through a memorandum of understanding to deepen cooperation in services trade and industrial sectors. China has been Malaysia's largest trading partner for 16 consecutive years, with total bilateral trade reaching RM484.12bil in 2024. A practical example of Malaysia-China collaboration could be the implementation of green smart supply chains integrating advanced technologies like artificial intelligence (AI) and the Internet of Things (IoT) with sustainable practices to create more efficient, eco-friendly, and digitally connected urban logistics and service systems.
The incorporation of green technologies into logistics and supply chain management has become a major area of research, driven by growing environmental awareness and the need for sustainable business approaches. Research on sustainable smart supply chains examines a range of technological innovations aimed at improving efficiency while reducing negative effects on the environment. The concept of a green smart supply chain perfectly aligns with this vision, as it combines cutting-edge digital innovations with environmentally responsible practices to transform logistics and supply chain management.
At the heart of Malaysia's 13th Malaysia Plan (13MP) for 2026-2030, lies a clear commitment to harnessing Industry 4.0 technologies such as AI, IoT, blockchain, and big data analytics to drive economic growth while ensuring sustainability. Through automation, real-time tracking, and predictive insights enabled by these technologies, businesses can monitor and manage emissions, waste, and energy consumption with unprecedented precision. For instance, the integration of blockchain with IoT tracking allows for transparent and real-time measurement of environmental impact, triggering timely mitigation efforts.
Influencing factors of Malaysian Green Smart Supply Chain
The shift toward green smart supply chains in Malaysia is driven by a combination of internal business strategies and external environmental factors. Internally, the readiness of Malaysian enterprises to adopt green smart practices depends heavily on their technological capabilities, availability of skilled workforce, and the commitment of leadership to environmental goals. Companies with strong digital infrastructure, such as those investing in automation, IoT systems, and data analytics, are better equipped to implement sustainable supply chain solutions. Additionally, awareness of environmental risks among executives, along with a supportive organisational culture, plays a vital role in integrating eco-friendly and intelligent practices into daily operations.
Externally, Malaysian manufacturers, especially small and medium enterprises (SMEs) often face challenges such as limited access to green technologies, high implementation costs, and a lack of technical expertise. These barriers highlight the importance of targeted government support and policy intervention. Under initiatives such as the New Industrial Master Plan 2030 (NIMP 2030), the government provides financial incentives, training programs, and regulatory frameworks to encourage the transition toward green and digital supply chains. Furthermore, public-private partnerships and collaboration with international players like China can accelerate knowledge transfer and investment in sustainable logistics and smart manufacturing infrastructure, positioning Malaysia as a competitive and environmentally responsible player in the regional supply chain ecosystem.
Malaysia–China collaboration
To bring this into sharper regional focus, Malaysia and China have recently advanced several collaborative efforts that underscore the practical application of green, smart supply chain principles. One significant example is the "Premier Supply Chain Synergy Programme". The Premier Supply Chain Synergy Programme is a Malaysian Investment Development Authority (Mida) and Chery collaboration launched in May 2025 to strengthen Malaysia's electric vehicle (EV) and automotive supply chain by linking Chery's Chinese suppliers with Malaysian vendors. The program focuses on localisation, technology transfer, and preparing Malaysia for next-generation vehicles, including the development of the upcoming Chery Smart Auto Industrial Park. This initiative supports Malaysia's National Automotive Policy (NAP) 2020 and aims to position the country as a competitive hub for automotive manufacturing and innovation
The Premier Supply Chain Synergy Programme is a clear example of how Malaysia–China collaboration aligns with and reinforces the principles of a green smart supply chain. By connecting Malaysian and Chinese automotive suppliers, the initiative facilitates the transfer of advanced technologies such as IoT-enabled machinery, AI-driven quality control systems, and smart logistics platforms. These innovations are essential components of a smart supply chain, enabling real-time monitoring, predictive analytics, and automation that improve operational efficiency and reduce resource wastage. At the same time, the programme promotes environmentally sustainable practices, particularly in the development of eco-friendly automotive components like electric powertrains and lightweight materials, contributing to the reduction of carbon emissions and energy consumption in the manufacturing process.
This dual focus on digital innovation and environmental sustainability directly supports Malaysia’s broader national agendas, including the New Industrial Master Plan 2030 (NIMP 2030), and the National Energy Transition Roadmap (NETR), which aims for net-zero emissions by 2050. The programme also strengthens the capacity of local SMEs by integrating them into regional green value chains, enhancing their technological capabilities and competitiveness in the global market. In doing so, the Premier Supply Chain Synergy Programme not only accelerates the transition toward a green smart supply chain in Malaysia’s automotive sector but also sets a model for sustainable industrial cooperation across other sectors.
In conclusion, from a strategic perspective, this Malaysia-China collaboration also helps Malaysian SMEs integrate into regional and global green value chains, improving their competitiveness and opening up new export opportunities. By being part of a supply network that values both technological sophistication and environmental responsibility, Malaysian manufacturers can position themselves as credible partners in the future of sustainable industrial development. This not only enhances Malaysia’s export competitiveness but also supports its broader goals of sustainable development and economic resilience in the face of global disruptions.
Dr Nurul Aqilah Mhd Yusak is an Assistant Professor at Tunku Abdul Rahman University of Management and Technology. The views expressed here are entirely the writer’s own.
The SEARCH Scholar Series is a social responsibility programme jointly organised by the Southeast Asia Research Centre for Humanities (SEARCH) and Tunku Abdul Rahman University of Management and Technology (TAR UMT).
