AI ecosystem to get new legal framework, a pro­posed solu­tion for global AI gov­ernance

 

Governance Bill will not apply to personal use

PETALING JAYA: Artificial intelligence (AI) systems, the AI lifecycle, as well as AI developers and deployers, are set to be regulated under the proposed Artificial Intelligence Governance Bill.

However, the Bill will not apply to the personal use of AI or on matters of national security.

Intended to serve as a national legal framework for the safe, responsible and innovation-enabling use of AI, the law will apply to systems placed on the Malaysian market or put into service in Malaysia.

ALSO READ: Evolving AI could outpace regulation, warn experts

It will also apply to AI systems designed, developed or used here, as well as those used by deployers set up in Malaysia, regardless of where the systems are physically hosted.

The proposed AI Governance Act is guided by five key principles: protecting human dignity and rights, transparency and explainability, accountability, safety and security, and responsible data governance.

Together, these principles provide the foundation for the responsible development, deployment and use of AI systems, while promoting trustworthy AI, innovation and public confidence.

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According to the public consultation document released by the National AI Office (NAIO), the Bill will adopt a principle-based approach by setting out national AI Governance Principles to guide the responsible development, deployment and use of AI, with implementation supported through standards, guidelines and other instruments.

It also adopts a risk-based approach, with regulatory obligations proportionate to an AI system's level of risk, categorised into three levels: unacceptable, high and low.

This means that higher-risk systems will face stricter governance requirements while lower-risk applications will be subject to lighter obligations.

The risk framework is anchored on “harm”, which includes death, bodily injury, unlawful deprivation of fundamental liberty anchored to the Federal Constitution, and the contravention of any written law.

The Bill also categorise AI incidents to include failures, weaknesses, misuse, unexpected effects and near misses.

It will also require incidents to be reported, including the nature of the incident, its foreseeable harm, the containment measures taken, the root cause (where applicable), and the remediation actions implemented.

The Bill also proposes a central AI authority as the principal national body for AI governance, whose role will be to oversee and operate the national “baseline” principles and standards to strengthen the overall AI ecosystem by addressing gaps in capacity across sectors.

The authority will oversee AI safety by maintaining a risk framework, supervising assessments, supporting testing, developing incident reporting mechanisms and engaging in international technical cooperation.

It will also be responsible for investigations and enforcement, including technical fact-finding when AI incidents occur, determining what happened, identifying the systems and actors involved, as well as producing findings to support corrective actions.

In addition, it will carry out capacity-building functions for the public sector by developing guidance, templates, training and practical support for public authorities, regulators, AI sandbox operators or overseers, and regulated organisations to help them comply with the framework.

The authority may also appoint "Sectoral Leads", who will be delegated specific powers under the Bill to support the implementation of the framework, where they have the legal authority, technical expertise and governance capacity.

The proposed amendments in the document are not final and remain subject to further review and amendment.

Digital Minister Gobind Singh Deo said in June that the government will adopt a two-pronged approach by using existing laws to prosecute those who misuse content, while also drafting the AI Governance Bill to further strengthen prevention and accountability throughout the technology’s lifecycle.

He said the move is aimed at ensuring that risks posed by high-capability technologies such as deepfakes, synthetic content and identity manipulation can be addressed at an early stage.

Ultimately, according to the public consultation document, the Bill aims to set up a central oversight framework that works alongside existing sectoral regulators to enable coordinated governance while addressing industry-specific risks and operational needs.

“This will allow public bodies, including existing regulators, to collaborate within a common governance framework, while retaining the flexibility to address sector-specific risks and operational needs,” it said.

The NAIO will be launched tomorrow.

Related stories:

• Evolving AI could outpace regulation, warn experts

A proposed solution for global AI governance

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20 Jul 2026 — The speech focused on China's governance philosophy of prioritising AI risk prevention and control while advancing secure, controllable, and ...Read more

The dollar system and global economic imbalances, Crumbling dollar hegemony

 

Crumbling dollar hegemony.Illustration: Liu Rui/GT

By IF Watcher, International Financial NewsPublished: Jul 29, 2026 03:38 PMA narrative has gained traction in recent years that attributes global supply-demand mismatches, trade frictions and growing competitive pressures to expanding industrial supply in emerging markets, particularly what it describes as "China's industrial overcapacity". This argument reverses cause and effect and obscures the deeper issue: the structural flaws of an international monetary system built around the U.S. dollar's dominance.

At the most fundamental macroeconomic level, global imbalances are not primarily an industrial issue, but one rooted in monetary arrangements and balance-of-payments structures. Under the savings-investment identity, a country's current-account balance essentially mirrors the gap between domestic savings and investment. The long-standing global pattern in which deficit countries consume while surplus countries produce is not determined by differences in industrial capacity. It is built into the structure of the dollar-based system.

As the world's dominant reserve and settlement currency, the dollar is subject to the inescapable Triffin dilemma. The U.S. must run persistent current-account deficits to provide the dollar liquidity needed to support international trade, capital flows and foreign-exchange reserves. Much of the dollar-denominated assets accumulated by other countries then flows back into U.S. financial markets, particularly into U.S. Treasury securities. This continually lowers America's overall financing costs and supports persistent fiscal deficits and consumption beyond current means.

This cycle of exporting dollars, importing goods and recycling capital back into the U.S. lies at the heart of global imbalances. It has existed for decades and is not fundamentally linked to the rise of Chinese industry.

Claims that so-called "overcapacity" is disrupting global markets also reveal a clear double standard. The large and persistent trade surpluses generated by Germany's advanced manufacturing sector, Japan's auto industry and U.S. high-tech products are widely viewed as a reflection of international specialization. Yet China's export competitiveness, built on integrated industrial supply chains, cost advantages and technological advances, is characterized as a "market distortion". In reality, the ample supply seen in some Chinese industries stems from persistently weak global demand, shifts in global supply chains and industrialization efforts across countries. It is a consequence of global imbalances, not their cause.

Blaming systemic global imbalances on the industrial capacity of a single country is neither objective nor does it do much to address the problem. Suppressing supply, erecting trade barriers and forcing surplus countries to scale back industrial capacity would only accelerate the fragmentation of global supply chains and further weaken effective global demand.

Addressing the root causes of global economic imbalances requires far-reaching reform of the international financial order.

First, the international monetary system should be further diversified. The global economy should reduce its excessive reliance on a single sovereign currency by expanding the use of the euro, the renminbi and other currencies in cross-border settlement, investment, financing and reserve holdings. Broader use of Special Drawing Rights (SDRs) should also be encouraged to support a more multipolar and balanced monetary system with greater risk diversification.

Second, mechanisms should be established to impose greater discipline on reserve-currency issuers. Global macroeconomic policy coordination should be strengthened to constrain unilateral and aggressive monetary and fiscal policies by major reserve-currency countries and reduce volatility in global capital flows and asset prices resulting from their spillover effects.

Third, the global financial governance architecture should be reformed. Voting shares and governance structures at the International Monetary Fund and the World Bank should be reformed to give emerging markets and developing countries a greater voice. A fairer and more transparent framework for global debt governance and crisis response should also be established.

Fourth, cross-border payment and settlement systems should be diversified. A broader range of cross-border clearing arrangements should be developed to reduce the path dependence of global trade and investment on a single payment system and bolster the resilience of the global financial system.

Global economic imbalances reflect tensions accumulated over a century of globalization and the evolution of the international monetary system. Only by moving beyond the short-sighted approach of blaming supply and shifting responsibility, and by reforming the international financial system toward greater diversity, equality, stability and shared governance, can the world address the underlying pressures behind these imbalances and achieve more balanced and sustainable global economic growth.

Why digital asset fraud victims won’t sue

 

 Photo by DUYET LE on Unsplash

Bit­coins live on the pub­lic block­chain that is oper­ated by nearly 20,000 com­puter nodes scattered world­wide. Unlike cloud stor­age where one can pin­point spe­cific phys­ical server loc­a­tions where data is kept, each node has a duplic­ate copy of the bit­coin ledger.

A GUY placed an order for supplies on a foreign website and paid for them in bitcoins.

The shipment never came, he got locked out from his account, and the admin is uncontactable. He wants to sue but worries it’s a lot more hassle than it’s worth.

Disclaimer: What you’re about to read is not legal opinion. If you’re facing a similar transaction, get advice beforehand not after. Had he done this, he wouldn’t be here.

First, he was asked by a lawyer to choose the jurisdiction for his case to be heard, each with its own private laws and civil procedure, as he needs to establish geographic connections like where the goods are based, where the loss occurred, and where the parties are located.

Bitcoins live on the public blockchain that is operated by nearly 20,000 computer nodes scattered worldwide.

Unlike cloud storage where one can pinpoint specific physical server locations where data is kept, each node has a duplicate copy of the bitcoin ledger.

All of this is virtual, hence the paradox: ‘nowhere and everywhere’. Lawyers have a word for it: “omni-territorial”.

The bitcoin wallet he used to make the payment is a browser extension, which could be accessed wherever he’s at with an internet connection.

Same goes for the website domain, hosting service, and InterPlanetary File System gateway, which are foreign. How then is his location of loss determined?

He’s also unsure whether the interface is actually a decentralised application (dApp) that runs by itself. He could have been interacting with a bot all along i.e. there’s no one for him to sue.

Some dApps are set up as decentralised autonomous organisations (DAO); but most jurisdictions don’t recognise DAO as a legal person, which means it cannot enter contracts, own property, and sue or be sued.

So, he’s back to square one: ‘Random Victim vs Persons Unknown’.

Naturally he’d filed a police report. He heard about the recent Cybercrimes Bill which addresses extra-territorial concerns, but for now, time is his biggest enemy.

At this junction, he’d hired an expert to trace the movement of bitcoins in the recipient’s wallet address with a ‘blockchain explorer’ (search engine for crypto activity).

He was told they are parked at a digital asset exchange (DAX) registered to an island somewhere on the Indian Ocean.

He wants to seek urgent interim relief from the court to freeze the funds before they’re dissipated, like how it’s done for bank accounts.

But he only has a lead. He can’t even bring a fully pleaded claim since there’s no information about the name or address of the other party!

He has no choice but to compel the DAX to disclose the name of its customers, even though the DAX is probably just a transit point and an innocent third party who got mixed up in this.

To assist him with such discovery, the court may grant free-standing information orders but they are highly discretionary and rarely used in foreign proceedings; and this is assuming there’s a strong cause of action for the court to assert jurisdiction on his claim.

Then there are service issues, i.e. proper delivery of court documents to the unknown defendant. Some judges allow serving directly to the wallet address with a non-fungible token ( T) that contains hyperlinks to the lawsuit.

But this isn’t always reliable, as the address is anonymous and can only be accurately linked to a human owner if the DAX has verified updated records.

To paraphrase an analogy from Lord Sumption (former Justice of UK Supreme Court): a hit-and-run driver who cannot be identified does not subsequently become identified simply because an T has been nailed to a tree near the scene of crime!

Let’s say he finally gets his way in court, he could still face obstacles with the judgment – will the foreign court recognise it, how to enforce it, are the funds already gone?

Truth be told, there’s a ‘silent majority’ crisis: studies show that 78% of crypto crimes are never escalated to the authorities. Of those that do, just US$1 is recovered for every US$65 lost, though it depends on fraud type and response time (93% don’t even report within 24 hours!).

Less than 6% consult a lawyer, and even far less would end up with civil litigation.

Most victims don’t seek recourse unless the amount of loss is huge because they feel that the legal process is expensive, slow and complex; and is largely designed for prosecution rather than compensation or refund.

But this perpetuates a vicious cycle: there’d be insufficient data points for investigators to develop typologies and for public interest groups to push reform, and courts won’t have the right cases to rule on for precedent – while fraudsters out there continue to get bolder without reprisal.

In the end he decides not to sue. Sorry, there are no heroes in this story.

 

By Edmund Yong is a director of the Generative AI Association of Malaysia and ambassador of the Global Blockchain Business Council founded in Davos.

TCM mak­ing global moves from clinic coun­ters into every­day life, No longer just an exotic alternative

Right dose: A pharmacist preparing Chinese herbal medicine for a patient in Qianmen, Beijing. — Xinhua

In the heart of Germany, a traditional Chinese herbal product has secured a lasting place on the shelves of the renowned Bahnhof-Apotheke pharmacy chain for over six years, with nearly 200,000 bottles of Shufeng Jiedu granules sold to date.

Priced at €39.90 (RM186) per bottle, this respiratory relief formula is among more than a dozen products from Anhui Jiren Pharmaceutical Co Ltd in eastern China, exemplifying the global journey of traditional Chinese medicine (TCM).

This journey is no longer limited to classic remedies stored behind pharmacy counters.

Since last year, a “Four Seasons Tea” based on TCM principles has been offered not only in German pharmacies but also on the menu of a tea house in Hamburg, ser­ving as a daily wellness supplement.

Behind the scenes: A staff member working at a plant of the Tianjin Pharmaceutical Da Ren Tang Group Co Ltd in Tianjin. — Xinhua

“From treatment to wellness, we seek to integrate TCM’s health-preserving culture into the daily lives of Europeans,” said Zhu Qiang, deputy general manager of Anhui Jiren Pharma­ceutical.

Once regarded as an exotic alternative, TCM is now expanding its global presence and joining the worldwide conversation on health and lifestyle.

To progress from cultural curiosity to global acceptance, TCM first had to tackle a fundamental challenge: making the “inexplicable” explicable.

The empirical nature of TCM, coupled with the complexity of herbal formulas, has long puzzled international regulators and scientists.

For instance, the same herb may either promote or stanch blood flow, depending on its combination with other ingredients.

The response has been a systematic drive towards standardisation.

China has facilitated the establishment of a technical committee under the International Organization for Standardization, which has so far issued over 100 international standards for TCM.

Pioneering institutions have also played a key role.

For example, Tianjin University of Traditional Chinese Medicine has led the creation of the world’s first international educational standard for TCM undergraduate programmes.

On the corporate front, major Chinese pharmaceutical companies have diligently pursued international certifications.

Tianjin Pharmaceutical Da Ren Tang Group Co Ltd has obtained certifications recognised in Australia and Japan.

As early as 1997, its product Suxiao Jiuxin Pills, a compound emergency medicine for heart attacks, was successfully registered as a prescription drug in Russia.

Anhui Jiren Pharmaceutical entered the European market in 2018, and 193 of its TCM granule varieties have passed official German quality inspections and are available in the EU market.

“We are exploring new approaches to bring more products to the global market, including strengthening ties with overseas research institutions to prove TCM’s efficacy with scientific evidence,” Zhu Qiang said.

Data from China’s National Administration of Traditional Chinese Medicine showed that TCM is now practised in 196 countries and regions.

China has also signed TCM cooperation agreements with over 40 foreign governments and international organisations.

Beyond documentation, transformation is underway on factory floors and in research labs, where intelligent technology is decoding herbal wisdom and demonstrating its mechanisms through data.

At the digitalised workshop in a Tianjin Pharmaceutical Da Ren Tang plant, Suxiao Jiuxin Pills roll off automated production lines. Each bottle carries a QR code that allows consumers to trace the medicine’s journey – from the specific herb plantation to every step of processing, storage and quality control.

“We use digital control to tackle the pain point of batch-to-batch variation in herbal products, ensuring both efficacy and stabi­lity,” explained Li Hongjiang, the plant’s production deputy general manager.

The upcoming new generation intelligent workshop, with an investment exceeding 300 million yuan (RM181mil), will use near-infrared spectroscopy and visual inspection systems to further enhance precision, Li added.

Artificial intelligence (AI) is also scaling up TCM production.

Remedy for all: People visiting a museum on traditional Chinese medicine in Tianjin. — Xinhua

In 2024, Tianjin-headquartered Tasly Pharma, in collaboration with Huawei Cloud, launched a TCM large language model.

Trained on a massive corpus of classical texts and clinical data, it assists in formula optimisation, mechanism explanation and the discovery of new clinical applications.

Similarly, a large model was jointly developed last year by organisations including the National SuperComputer Center in Tianjin and Tianjin University of Traditional Chinese Medicine, encompassing knowledge from over 20 TCM clinical disciplines.

“AI can synthesise the vast empirical knowledge recorded in ancient TCM texts, thereby supporting the standardisation of TCM practice,” said Guo Yi, vice-president of Tianjin University of Traditional Chinese Medicine.

The ultimate test of TCM’s global integration lies not only in clinics but also in its seamless adoption into daily life.

This is evident in the growing trend among young Chinese who are embracing TCM-inspired beverages, foods and physical exercises.

Meanwhile, Chinese companies are also actively introducing TCM as a modern lifestyle choice worldwide.

Anhui Jiren Pharmaceutical’s Four Seasons Tea in Germany is a prime example. Each product in the series adapts its herbal composition to a specific season. Marketed as a food supplement, it lets consumers embrace TCM’s concept of seasonal wellness through a simple and enjoyable daily ritual.

Educational and experiential platforms amplify this soft power.

Tianjin University of Traditional Chinese Medicine has been promoting TCM culture overseas through platforms such as Confucius Institutes.

Meanwhile, Beijing Tong Ren Tang Chinese Medicine Co Ltd operates ­museums both in China and abroad to showcase the history, culture, products and services of TCM.

TCM is also merging with tourism to boost its global appeal.

In the southern island province of Hainan, the Sanya Hospital of Traditional Chinese Medicine has designed customised treatment plans for foreign clients, offering services such as acupuncture, massage, herbal baths, medicinal cuisine and weight management services.

Konstantin, a Russian engineer, brought his parents to the hospital for therapies such as acupuncture.

“The techniques combined with Sanya’s warm climate greatly alleviate neck and lumbar pain,” he said.

Some community-based institutions in Hainan have also created one-stop “wellness communities” for international tou­rists by integrating residential environments, health services and healing therapies.

“With a history spanning thousands of years, TCM embodies profound wisdom and unique insights,” said Zhang Boli, an academician with the Chinese Academy of Engineering and an expert in TCM.

“As TCM continues to evolve and innovate while actively engaging with the global community, its value will be recognised by more people worldwide, contributing Chinese wisdom to the advancement of human health.” — Xinhua

Push to strengthen Mandarin skills amid China’s growing influence

 

For a good cause: (Eighth from left) Chong, Liow, Chan and Liew cutting a cake together alongside event committee members during the fundraising dinner and 10th anniversary celebration of SJK(C) Bukit Serdang at Wisma Huazong in Seri Kembangan. — CHAN TAK KONG/The Star

Chan: Proficiency key amid China’s growing influence

SERI KEMBANGAN: Mastering Mandarin is important as China is already leading the world in various sectors while leveraging the language’s global influence, says Tunku Abdul Rahman University of Management and Technology board of governors chairman Tan Sri Chan Kong Choy.

The former transport minister urged Malaysian leaders to have the foresight to continue supporting Chinese education in the country.

“There are already about 80 countries, including the United Kingdom, Australia and South Korea, that have incorporated Mandarin into their education systems.

“Researchers have also predicted that Mandarin may one day replace English as the world’s most important language.

“Hence, I hope Malaysian leaders will have the vision and be open-minded in upholding Chinese education.

“It should no longer be viewed as a racial issue, but a national issue,” Chan said during the fundraising dinner and 10th anniversary celebration of SJK(C) Bukit Serdang at Wisma Huazong on Saturday.

The dinner, attended by about 1,500 guests, raised RM3,066,888 for the construction of a new four-storey block that will house 12 additional classrooms.

Also present was the school’s board of governors chairman Datuk Liew Yuen Keong, who said the new school block was needed to accommodate the more than 3,500 students expected to enrol in the school next year.

“SJK(C) Bukit Serdang has come a long way since its establishment in 2015. We started with 197 students and now have 1,265, making us one of the fastest-growing schools in Selangor,” he said.

Liew added that the Subang Jaya City Council approved the building plans for the new block on July 16.

“I hope construction can begin by the end of this year or early next year so that the new block will be ready for use in 2028,” he said.

Also present were MCA secretary-general Datuk Chong Sin Woon and former MCA president Tan Sri Liow Tiong Lai.