CARI Captures Issue 644: Prabowo Subianto on track to win Indonesian presidential election

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

INDONESIA
Prabowo Subianto on track to win Indonesian presidential election based on quick count of results
(14 February 2024) Former army general Prabowo Subianto is on track to win Indonesia’s presidential election held on 14 February, 2024, based on a quick count of the final results. As of 8 p.m. Jakarta time, the pollsters’ quick counts, based on about 90% of votes counted at sample polling stations, indicate Prabowo winning 57% to 59% of the total vote. In comparison, former Jakarta Govenor Anies Baswedan secured 24% to 26% of the total vote, while former Central Java Governor Ganjar Pranowo secured 16% to 17%. To win the presidential election, a candidate must gain the majority of total votes and more than 20% in at least half of the 38 provinces. If a candidate is unable to secure this, a second round is held on 26 June. The General Elections Commission has until 20 March to announce the final results.

INDONESIA
Indonesian stocks jump in early trading as Prabowo declares victory
(15 February 2024) Indonesian stocks jumped in early trading on 15 February after Indonesian Defense Minister Prabowo Subianto declared victory in the country’s presidential election held on 14 February, 2024. The Jakarta Composite Index rose as much as 2.2%, the most since May 2022, after Prabowo secured nearly 60% of votes in quick counts done by private pollsters. It closed 1.3% higher at 7,303.28 on 15 February. A swift victory for Prabowo is likely to remove the uncertainty that would come from a prolonged election. The defense minister largely campaigned on policy continuity with the current administration of President Joko Widodo, which also appealed to investors.

THAILAND
Government delays approval of draft bill banning recreational usage of cannabis
(13 February 2024) The Thai government has delayed the approval of a draft bill banning the recreational usage of cannabis as it seeks more opinions from other parties. According to Thailand’s Public Health Minister, the Ministry of Public Health could not submit the bill to the cabinet on 13 February, 2024 because more time is needed to seek views. Thailand’s Prime Minister Srettha Thavisin had pledged to limit cannabis only for medical and health-related use during the May 2023 election campaign over public concerns over addiction. The previous administration had implemented landmark legislation in mid-2022 to decriminalize the usage of cannabis, making Thailand the first country in Asia to do so.

MALAYSIA
Malaysia’s economy expands below target at 3.7% in 2023
(16 February 2024) According to Bank Negara Malaysia, Malaysia’s economy expanded by 3.7% in 2023, below the official target of 4% to 5%. This was a substantial drop from the 8.7% growth recorded in 2022. In the last quarter of 2023, GDP growth slowed to 3.0%, from the 3.3% growth recorded in the previous quarter. The fourth quarter performance was worse than the average 3.4% forecast in a Reuters poll of 23 economists published on 14 February, 2024. Bank Negara attributed this slowdown to a ‘challenging external environment’, and pointed to  slower global trade, the global tech downcycle, geopolitical tensions, and tighter monetary policies. Malaysia’s overall trade was down 7.3%, while manufacturing managed just 0.8% growth due to continued weakness in the electrical and electronics industry.

SINGAPORE
Non-oil domestic exports grows 16.8% year-on-year in January 2024
(16 February 2024) Singapore’s non-oil domestic exports grew by 16.8% year-on-year in January 2024, aided by growth in both electronic and non-electronic products. Non-oil domestic exports amounted to US$9.88 billion in January 2023, compared to US$11.5 billion last month. The expansion has continued the growth seen in November 2023, when non-oil domestic exports grew 1% after falling for 13 consecutive months. On a month-on-month seasonally adjusted basis, non-oil domestic exports grew 2.3% in January, after declining 2.8% in December 2023. The biggest expansion was in exports to China, which grew 101.3% year-on-year.

THE PHILIPPINES
Filipino conglomerate San Miguel chosen to revamp and operate main international airport
(16 February 2024) A consortium led by Filipino conglomerate San Miguel has been chosen by the Philippines government to revamp and operate Ninoy Aquino International Airport (NAIA), the country’s main international airport based in Manila. On 16 February, 2024, authorities announced that the winning contract went to San Miguel, which offered the central government 82% of revenue if it was granted a license to operate the airport under a privatization deal that will run for 15 years, with an option to extend it by another decade. The consortium includes RLW Aviation Development, RMM Asian Logistics and South Korea’s Incheon International Airport, and is expected to begin running operations within three to six months.

VIET NAM
Viet Nam records surging number of international arrivals during Chinese New Year holidays
(15 February 2024) According to the Vietnam National Authority of Tourism, Viet Nam recorded a surging number of international arrivals during the Chinese New Year holidays. While the city of Danang welcomed nearly 177,000 foreign arrivals between 8 to 14 February, Hanoi welcomed nearly 103,000 arrivals. During the same period, the number of international arrivals traveling to Ho Chi Minh City hit 75,000, while travelers to the Mekong Delta province of Kien Giang reached 44,370. Meanwhile, the number of arrivals to the Central Highlands province of Lam Dong reached 20,000. Authorities attributed the increase in the number of foreign visitors to favorable visa policies, proper market exploitation, and effective promotion activities.


RCEP Monitor


JAPAN
Japan’s economy unexpectedly falls into recession on 15 February, 2024
(15 February 2024) Japan’s economy unexpectedly fell into recession on 15 February, 2024 after shrinking for the second consecutive quarter in the last quarter of 2023. Japan’s GDP would contract by 0.4% year-on-year in the fourth quarter of 2023. The economy had shrunk by 3.3% year-on-year in the previous quarter. Japan would also lose its spot as the third largest economy in the world to Germany in US Dollar terms in 2023. While the IMF had predicted that Germany would overtake Japan as the third-largest economy in October 2023, the change in ranking will only be declared by the IMF once both countries have published the final versions of their economic growth figures.

SOUTH KOREA
South Korea prepares US$56.97 billion financial support programme for companies
(15 February 2024) South Korea has prepared a US$56.97 billion financial support program for companies increasing investments into key sectors as well as small businesses struggling with high-interest rates. The program includes US$11.26 billion worth of cheap policy loans from a state-run bank for key industries, such as semiconductor and battery, while commercial banks will also provide US$15.01 billion to support small and medium-sized businesses. South Korea’s Financial Services Commission cited the need for regulatory reform and financial support, pointing to evolving trade relations with China, technological advancement in major industries, and fragmentation of global supply chains.

AUSTRALIA
Unemployment rate stands at two-year high of 4.1% in January 2024
(15 February 2024) According to the Australian Bureau of Statistics, Australia’s unemployment rate in January 2024 jumped to a two-year high of 4.1%. In comparison, the unemployment rate measured 3.9% in December 2023. The economy added 11,100 full-time jobs while shedding 10,600 part-time roles, leaving a net gain for the month of just 500 jobs. This increase in the jobless rate was attributed in part to more people looking for work at the start of 2024. However, the participation rate remained unchanged from December 2023 at 66.8%. The Reserve Bank of Australia will be monitoring these latest numbers as it assesses the impact of 13 increases in official interest rates since May 2022.

CARI Captures Issue 643: Viet Nam pushes US to change its ‘non-market economy’ classification

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

VIET NAM
Viet Nam pushes US to change its ‘non-market economy’ classification
(05 February 2024) Viet Nam is pushing the US to change its ‘non-market economy’ classification before the US presidential elections in November 2024. The US continues to classify Viet Nam as a non-market economy, defined as a country in which the state has either a monopoly or near-monopoly on trade. The classification primarily impacts the response to allegations of ‘dumping’. The US uses different criteria to assess dumping in market and non-market economies, with the latter more liable to pay significantly higher anti-dumping duties. On 24 October, 2023, the US Commerce Department announced it would review Vietnam’s non-market economy classification. A decision that must be made within 270 days, meaning around mid-July 2024.

THAILAND
Government to ‘urgently’ move bill to ban the recreational use of cannabis
(06 February 2024) The Thai government is seeking to ‘urgently’ move a Bill that would ban the recreational use of cannabis. Thailand had previously decriminalized the drug in June 2022 under the previous government, which included the pro-decriminalization Bhumjaithai party. The move would prompt hundreds of cannabis dispensaries to sprout around the country, particularly in Bangkok. Critics have called for tighter legislation. Thailand’s health minister said the new Bill – which bans the recreational use of cannabis – will be proposed at the Cabinet meeting next week. The new Bill would be an amendment to the existing one, and will only allow the usage of cannabis for health and medicinal purposes.

THAILAND
Thai SEC announce new criteria for marking troubled stocks on Bangkok bourse
(06 February 2024) On 06 February, 2024, the Thai Securities and Exchange Commission (SEC) announced new criteria for marking financially distressed companies listed on the Bangkok bourse from April 2024 onwards. As part of the new rules, the “C” or caution sign will apply to companies that have reported net losses for three consecutive years or annual revenue below THB 100 million (US$2.8 million), defaulted on loans or bonds, or submitted financial statements with a “no comment” from an auditor. As well, companies with a free-float ratio below the minimum requirement will be marked with “CF,” while those with inadequate audit committee members will receive a “CC.” The new measures come amidst calls for Thailand to raise the standard of listed companies and prevent corporate scandals that contributed to the SET index falling 15.2% in 2023, becoming Asia’s worst-performing market.

THE PHILIPPINES
Inflation rate eases to 2.8% year-on-year in January 2024
(06 February 2024) According to the Philippine Statistics Authority (PSA), the inflation rate in the Philippines eased to 2.8% year-on-year in January 2024 from 3.9% in December 2023. According to the PSA, the inflation rate in January was the lowest since the 2.3% inflation rate recorded in October 2020. In January 2023, the inflation rate was recorded at 8.7%. The downtrend in the overall inflation in January was primarily attributed to a slower annual increment of food and non-alcoholic beverages prices at 3.5% in January from 5.4% in December. Core inflation, which excludes select food and energy prices, decreased to 3.8% in January from 4.4% in December.

SINGAPORE
Singaporean banks’ profits set to peak in fourth quarter of 2023 due to coming rate cuts
(6 February 2024) Singaporean banks’ profits are expected to peak in the fourth quarter of 2023 due to central banks around the world pivoting towards rate cuts. Analysts have argued that the earnings momentum for Singaporean banks has peaked, with the tailwinds enjoyed by rising interest rates in 2023 unlikely to be sustained in 2024. Besides higher global rates, Singapore banks have also benefited from strong inflows of wealth over the last few years. Singaporean banks are also expected to see sharper scrutiny of their wealth management businesses in 2024 in response to an SGD 2.2-billion money laundering scandal that hit Singapore last year.

MALAYSIA
Malaysia’s benchmark stock index ends higher after volatile session
(06 February 2024) On 06 February, 2024, Malaysia’s benchmark stock index, the FBM KLCI, recovered from a volatile trading session to end on a slightly positive note as investors weighed larger developments in the global economy. The day’s trading volume totaled 3.09 billion shares valued at MYR 2.17 billion (US$455 million). Malaysia’s stock market was helped along by bullish sentiments concerning China’s economy, in particular news that Beijing will ramp up support. Among Malaysia’s blue chip stocks, Nestle rose for a sixth consecutive session by RM1.30 (US$0.27) to RM121.30 (US$25.45) as the food & beverage giant is expected to benefit from the seasonal festivities.

INDONESIA
Indonesian economy expands 5.05% in 2023, lower than 2022’s 5.31%
(06 February 2024) According to Statistics Indonesia (BPS), Indonesia’s economy expanded by 5.05% year-on-year in 2023, lower than the 5.31% recorded in 2022. The economy also expanded on a quarterly basis from 4.94% in the third quarter of 2023 to 5.04% in the fourth quarter. The island that saw the largest GDP increase was Kalimantan, the site of the new capital city of Nusantara under construction, followed by Sulawesi and Maluku, which are locations for nickel downstream investments. Maintaining domestic demand was another factor driving growth.


RCEP Monitor


AUSTRALIA
Australia’s central bank keeps interest rates at 12-year high and suggests further tightening possible
(06 February 2024) Australia’s central bank, the Reserve Bank of Australia (RBA), left interest rates at a 12-year high on 07 February, 2024, and suggested that further tightening may be needed. The RBA kept its cash rate at 4.35%, and stated that a further increase in rates cannot be ruled out. The Australian Dollar rose as much as 0.5% to 65.17 US cents, while yields on three-year government bonds were up 2 basis points to 3.70%. Compared to many of its global peers, the RBA retains a mild tightening bias. The RBA also predicts that core inflation will only hit the midpoint of its 2% to 3% target band in 2026.

JAPAN
Toyota to boost spending on EV production in the US by US$1.3 billion
(07 February 2024) Toyota is boosting investment at a factory in the state of Kentucky in the US by US$1.3 billion. The Japanese automaker announced that the added spending is earmarked for its first U.S.-made EV and other unspecified battery-powered models, and includes money for a battery pack assembly line at the factory. The added investment brings total outlays at the Georgetown, Kentucky, factory to nearly US$10 billion since 1986. The Kentucky location is Toyota’s oldest vehicle assembly plant in the U.S. Toyota has taken a more cautious approach towards introducing fully electric vehicles than peers such as Volkswagen and General Motors.

AUSTRALIA
Australia to propose setting up international standards for ethical and environmentally friendly mining
(07 February 2024) The Australian government has proposed setting up international standards for ethical and environmentally friendly mining in an attempt to command higher prices for its minerals. Australia’s Minister of Resources stated that she will propose the idea at the PDAC 2024 Convention, a mineral industry trade event, in Canada in March 2024. She also noted that Australia intends to cooperate with ‘like-minded nations’ including Canada, which already has high working standards and environmental standards. This comes amidst the falling global prices of metals such as nickel and lithium, which has negatively impacted the Australian minerals industry. The slump follows an EV market slowdown alongside oversupply from countries like Indonesia. An international standard on ethics and the environment could help strengthen the competitiveness of Australia’s minerals, which are relatively expensive compared to other countries.

CARI Captures Issue 642: Future of planned Indonesian capital Nusantara faces uncertainties due to election

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

INDONESIA
Future of planned capital city Nusantara faces uncertainties due to coming election
(31 January 2024) The future of Indonesia’s planned capital city Nusantara faces uncertainties due to the country’s coming elections on 14 February, 2024. The Indonesian government plans to finance 20% of the total funding for the project, while private investors will finance the remaining 80%. However, private funding for the new capital has recently halted, with investors awaiting the election results and what Jokowi’s successor’s views on the project are. Of the three candidates to replace Jokowi, two of them, Prabowo Subianto and Ganjar Pranowo, have declared their support for Nusantara and intend to continue it. The remaining candidate, Anies Baswedan, has expressed skepticism about the project, arguing Indonesia has more urgent problems to fix. As of now, foreign investors have remained hesitant to pledge funding for the project. As of 16 January, the government has received about 345 letters of interest, of which about 207 were from domestic companies.

INDONESIA
Inflation eases to 2.57% in January 2024, midpoint of central bank target
(01 February 2024) According to data by Bank Indonesia, Indonesia’s inflation rate eased to 2.57% in January 2024. This is a slight decrease from the 2.61% measured in December 2023. The inflation rate in January 2024 is near the midpoint of Bank Indonesia’s target range of 1.5% to 3.5% for 2024. The core inflation rate, which excludes government-controlled prices and volatile food prices, also cooled to 1.68% in January, from 1.80% in December. Inflation in Indonesia has stayed within the central bank’s target range since the middle of 2023, helped by Bank Indonesia’s interest rate hiking cycle of 250 basis points between August 2022 and October 2023.

MALAYSIA
Malaysia’s PMI rises to 49.0 in January 2024, a sixteen-month high
(01 February 2024) According to S&P Global, the seasonally-adjusted S&P Global Malaysia Manufacturing purchasing managers’ index (PMI) rose to 49.0 in January 2024, from 47.9 in December 2023 and the highest since September 2022. The latest reading suggests that 2023’s downturn is losing momentum and sets the Malaysian manufacturing sector on course for a gradual recovery. It was noted that new orders, output, and exports were all scaled back to lesser extents in January, representative of a slight pick-up in the rate of GDP growth. Manufacturing new orders also moderated for the seventeenth month running in January, though the latest slowdown was the weakest recorded since October 2022.

ASEAN
Funds raised through IPOs in Southeast Asia drop over 60% in second half of 2023
(31 February 2024) Funding raised through IPOs dropped over 60% year-on-year in the second half of 2023, with companies shying away from listings due to factors such as China’s ongoing slowdown as well as domestic elections. A total of US$1.6 billion was raised in the second half of 2023, down 63% year-on-year. The number of IPOs dropped 21% to 71. Thailand saw the largest fundraising drop in the region, declining by 75% to US$773 million. This was attributed to the political uncertainty that followed the May 2023 election, when there was a delay in setting up the new government. In Indonesia, the number of IPOs in the July-December period of 2023 dropped from 42 to 31, as investors await the results of the coming elections in February 2024. Some analysts forecast the IPO space to improve in 2024 as the interest rate environment begins to stabilize.

ASEAN
Chinese EV maker BYD eyes aggressive expansion in ASEAN
(31 January 2024) Chinese electric vehicle (EV) maker BYD is pursuing an aggressive expansion in ASEAN, particularly in Singapore and the Philippines. The automaker plans to open more than a dozen sales outlets for passenger cars this year in Singapore and the Philippines. In mid-January, BYD launched three of its passenger models in Indonesia, including its Seal sedan, Atto 3 sports utility vehicle, and the Dolphin hatchback. This marked its foray into the Indonesian market. In Singapore and the Philippines, BYD works with local distributors to sell its EVs, namely automotive group Sime Darby Motors and the Philippine conglomerate Ayala respectively.

THE PHILIPPINES
Economy expands by 5.6% in 2023, missing government target of 6% to 7% growth
(31 January 2024) Annual GDP growth for the Philippines for 2023 came in at 5.6%, short of the 7.6% pace in 2022 and missing the government target of 6% to 7% growth. Growth in the fourth quarter of 2023 came at 5.6%, weaker than the 7.1% recorded in the same period in 2022. The Philippines economy faced multiple headwinds in 2023, including soaring food prices and persistent supply chain bottlenecks. In response, the central bank, the Bangko Sentral ng Pilipinas (BSP), raised interest rates to their highest in years, which also dampened household spending power. The BSP currently maintains its benchmark lending rate at 6.5%, after an emergency increase of 25 basis points in October 2023.

SINGAPORE
Investment commitments in Singapore slowed to US$9.5 billion in 2023 from US$16.78 billion in 2022
(30 January 2024) Investment commitments into Singapore slowed to US$9.5 billion in 2023 from a record US$16.78 billion in 2022. According to the Economic Development Board (EDB), these commitments are expected to create 20,045 jobs over the next five years. About 58% of those jobs are likely to be in services, 26% in research and development, and the remaining 16% in manufacturing. The EBD noted that the outlook for 2024 remains challenging due to many headwinds, including ongoing geopolitical tensions, policy uncertainty created by electoral contests in many jurisdictions, increased competition for investments, and macroeconomic uncertainty.


RCEP Monitor


CHINA
China’s debt-to-GDP ratio climbs to new record high in 2023 despite slow pace of borrowing
(30 January 2024) According to a report by the National Institution for Finance and Development (NIFD), China’s debt-to-GDP ratio rose to a new record high in 2023 despite the slow pace of borrowing, reflecting China’s weak economic growth. The macro leverage ratio, which measures total outstanding nonfinancial debt as a share of nominal GDP, rose to 287.8% in 2023, up 13.5% year-on-year. It was found that the expansion of the overall leverage ratio outpaced the growth of borrowing. The total liabilities of the household, corporate, and government sectors expanded at 9.8% in 2023, largely unchanged from 2022. The limited debt expansion and significant rise of the macro leverage ratio in 2023 were attributed to the slowdown in China’s nominal economic growth. China’s nominal growth measured at 4.6% in 2023.

CHINA
China’s benchmark PMI measures at 49.2 for first month of 2024
(31 January 2024) According to China’s National Bureau of Statistics, China’s benchmark purchasing managers’ index (PMI) came in at 49.2 for the first month of 2024. The reading was higher than the 49.0 measured in December 2023. The slight improvement in January 2024’s PMI was attributed to a rebound in the manufacturing sector. The PMI has been below the 50-point level that separates growth from contraction since October 2023 — and for most of 2023 — amid a global economic slowdown and an uneven recovery in domestic demand. The PMI rose for the first time since October 2023, backed by gains in subindexes including production and new export orders. Readings for imports and finished goods inventory also improved in the period before the country enters the Lunar New Year in early February 2024.

CHINA
Foreign investors sell net US$2 billion worth of mainland Chinese stocks in January 2024
(31 January 2024) Foreign investors sold a net US$2 billion worth of mainland Chinese stocks in January 2024. The month also produced the sixth consecutive monthly outflow since August 2023. This trend marks the ‘strongest’ and ‘longest’ net outflow since the Stock Connect trading link between Hong Kong and the mainland opened in 2014. These outflows came despite measures by the Chinese government to prop up the stock market. This included China’s central bank cutting the bank reserve ratio to boost liquidity. As well, China’s securities regulator said it was suspending stock borrowing via exchanges for short selling. According to Goldman Sachs, the Chinese and Hong Kong markets are performing the worst and third worst in Asia in dollar terms year-to-date, with losses of 10.9% and 9.8% respectively.

CARI Captures Issue 641: Southeast Asian markets poised for turnaround in 2024 on back of cheap valuations

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Southeast Asian markets poised for turnaround in 2024 on back of cheap valuations
(22 January 2024) Southeast Asian markets are poised for a turnaround in 2024 on the back of cheap valuations and potentially high economic growth. This follows sluggish growth for said markets in 2023. According to research by Maybank Investment Banking Group, improving growth, rising exports, a pick up in manufacturing, and a better-than-expected outlook by Taiwan Semiconductor Manufacturing Company last week all mean that Southeast Asia markets are poised for a better year. The MSCI Southeast Asia Index dropped a little over 3% in 2023, compared with the more than 20% rise in the broader MSCI World Index. It was noted that even a potential US recession will not dampen optimism for Southeast Asian markets, with certain countries such as Indonesia, Malaysia, and Thailand strongly driven by domestic consumption. Meanwhile, other economies in the region are placed to benefit from their growing presence in the chips and electric vehicle industries.

ASEAN
The Philippines, Indonesian and Malaysian currencies reach three-month low
(25 January 2024) The Filipino peso, Indonesian rupiah and Malaysian ringgit were among several Asia-Pacific currencies that reached a three-month low against the US dollar on 24 January, 2024. Meanwhile, the Thai baht was among others which reached its weakest in one or two months. The weakening of many ASEAN currencies is attributed to both a slowdown in the Chinese economy as well as the firmness of the US dollar. Many Asian economies depend heavily on China, meaning any slump in the latter tends to spur selling in their home currencies. The most important industries in these countries for earning foreign currencies depend on the Chinese economy, from electronic devices in the Philippines to tourism in Thailand.

VIET NAM, GERMANY
Germany President visits Viet Nam with business delegation
(23 January 2024) German President Frank-Walter Steinmeier visited Hanoi on 23 January, 2024 alongside a business delegation to explore alternative markets as part of its China de-risking strategy. Steinmeier met with Viet Nam’s President Vo Van Tthuong, where they both signed a memorandum of understanding on facilitating the movement of skilled workers from Vietnam to Germany. According to the German Chamber of Commerce in Viet Nam, German companies have invested more than US$3 billion into Viet Nam. Germany is Viet Nam’s most important trading partner in the European Union, while Viet Nam is one of Germany’s most important partners in ASEAN.

MALAYSIA
Malaysia’s economy to expand by 4.6% in 2024
(20 January 2024) According to RHB Investment Bank (RHB IB), Malaysia’s economy is set to expand by 4.6% in 2024. RHB IB noted that Malaysia’s growth momentum is expected to accelerate in 2024, driven by improvements in external demand. It noted that nominal export growth is projected to rebound by 4.3% year-on-year in 2024, compared to a decline of 8% in 2023. The bank also had a positive outlook on private consumption growth, supported by robust labor market demand conditions. Among the potential upside risks to its 2024 growth forecasts include the continuation of major infrastructure projects, alongside the implementation of business-friendly policies and incentives focusing on priority sectors such as technology, tourism, and agriculture, as well as those with export capacity.

INDONESIA
Troubled state-owned builder PT Wijaya Karya signs US$1.31 billion debt restructuring deal
(24 January 2024) Troubled Indonesian state-owned builder PT Wijaya Karya signed a US$1.31 billion debt restructuring deal with 11 financial institutions, including PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia, PT Bank Tabungan Negara, PT Bank Syariah Indonesia, and PT Bank Panin. The deal covers 87.1% of the debt being restructured as of 23 January. Wijaya Karya has seen its liabilities balloon amid an aggressive push to build infrastructure under the presidency of Joko Widodo. The company has switched 93% of its projects to a payment mechanism based on monthly progress, a significant increase from the 40% in 2016.

THAILAND
Thai stock exchange to expedite delistings to improve investor sentiment
(23 January 2024) The Stock Exchange of Thailand (SET) has outlined new rules and procedures to monitor listed companies and prevent fraud, as well as to expedite the delisting of companies. This is to improve investor perceptions of the SET, which finished as Asia’s worse-performing market in 2023. The SET Index fell by 15.2% in 2023 amid halting recoveries for manufacturing and tourism plus decade-high interest rates. Among the changes in the bourse’s three-year operational plan include additional grounds for delisting and oversight of companies reporting weak performance. As well, the window for companies to improve their performance before being delisted will also be narrowed. This is to shorten the delisting process, which can take up to seven years at present.

THE PHILIPPINES
Authorities shelve plans for more taxes amid elevated high inflation
(24 January 2024) Authorities have shelved plans to impose new taxes on junk food and sweetened beverages amid high inflation. The Philippines’ Finance Secretary stated that it is ‘not the time’ to impose additional taxes, but to prioritize enforcement of existing laws instead. He stated that there may be a need to ‘temper’ a proposed hike in taxes on motor vehicle users, but was supportive of measures imposing levies on single-use plastic and digital services. In 2023, the country had listed priority measures that the Filipino Congress needed to pass, including reforming the military’s pension system. Under the proposals for military pensions, soldiers and uniformed personnel would pay to their retirement funds instead of the state.


RCEP Monitor


CHINA
Chinese gaming stocks rise after regulators seemingly take down draft regulations
(23 January 2024) The stocks of Chinese gaming companies rose in Hong Kong after regulators seemingly took down the draft of regulations aimed at curbing players’ spending. The draft of the gaming rules had been removed from the official website of the National Press and Publication Administration (NPPA), China’s gaming regulator, as of the morning of 23 January, 2024. It is unknown if the draft rules were removed due to the rules being scrapped or because the consultation period for the draft regulations had ended. The issuance of the draft regulations in December 2023 wiped out the equivalent of billions of U.S. dollars of Chinese gaming companies’ market capitalizations just one day after it went online, as investors feared a new tech crackdown.

CHINA
Hong Kong-listed stocks hits 36% discount to mainland peers, deepest in 15 years
(22 January 2024) A rout in Chinese stocks listed in Hong Kong has pushed their discount to mainland peers to 36%, their deepest in 15 years. The steeper losses in Hong Kong, where some of China’s most influential firms are listed and there is less interference from Beijing, suggests global investor sentiments towards the Chinese economy remains gloomy. The seemingly endless selloff in Chinese shares has been attributed to a range of factors, from a deepening housing slump to stubborn deflationary pressures to uncertainty about US interest rates. Chinese stocks listed in Hong Kong are often regarded as a better barometer of the health of China’s economy and a more accurate gauge of broader investor sentiment.

SOUTH KOREA
South Korea’s economy maintains 0.6% growth for fourth quarter of 2023
(25 January 2024) According to the Bank of Korea, the Korean economy maintained quarterly growth of 0.6% in the fourth quarter of 2024. This brought overall growth for 2023 to 1.4%. South Korea had earlier registered 0.6% growth in the second and third quarters of 2023. Exports grew by 2.6%, down from 3.4% the preceding quarter, while private consumption registered 0.2% growth, a slight decline from 0.3% the preceding quarter. The Bank of Korea projects the economy to expand by 2.1% in 2024, down from an initial outlook of 2.4%. The IMF has predicted annual growth of 2.2%.

CARI Captures Issue 640: Malaysian ringgit vulnerable to drop towards 2023 low due to political risks

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

MALAYSIA
Malaysian ringgit vulnerable to drop towards 2023 low due to political risks
(15 January 2024) The Malaysian ringgit is vulnerable to dropping towards 2023’s low due to concerns over the current government’s stability. The ringgit is also facing headwinds from a recent slide in oil prices and falling exports. The ringgit is currently about 3% away from the 25-year low reached in October 2023. Last year, the ringgit was labelled as emerging Asia’s worst performer. RBC Capital Markets has projected the ringgit to drop about 2% from 12 January’s close to 4.75 versus the US Dollar in the first half of 2023. In October, the ringgit slumped to nearly 4.8, the weakest since January 1998, the height of the Asian financial crisis. The ringgit has slid more than 1% in January, adding to losses from the previous three years.

MALAYSIA
Sovereign wealth fund Khazanah Nasional invest US$42 million in Indian fast food chain
(16 January 2024) Malaysia’s sovereign wealth fund Khazanah Nasional invested US$42 million into Indian fast food chain Wow! Momo. Khazanah Nasional acquired a 15% stake in the chain. The fast food chain also raised another US$7.2 million from Indian investment firm, OAKS Asset Management. Wow! Mamo plans to use its newly acquired funds for expansion as well as to provide an exit route to early-stage investors. Wow! Mamo is based in Kolkata in West Bengal state, and was founded in 2008. The company operates about 630 outlets and kiosks in 35 cities under different brands.

ASEAN
Southeast Asian leaders appealing to Tesla to invest in their country
(16 January 2024) Southeast Asian leaders are appealing to electric vehicle (EV) maker Tesla to invest in their countries to curb its dependence on the Chinese market. In May 2022, Indonesian President Joko Widodo visited Tesla CEO Elon Musk in Texas, where he urged Musk to build an EV plant in Indonesia to leverage upon the country’s rich nickel minerals. In July 2023, Malaysian Prime Minister Anwar Ibrahim discussed potential investments and other topics with Musk. Thai Prime Minister Srettha Thavisin met with Musk on the sidelines of the United Nations General Assembly in September 2023. Strettha later stated that he expected at least US$5 billion in total investments from Tesla and other U.S. corporations.

THAILAND
Thailand set to delay launch of US$14.3 billion digital wallet scheme until after May 2024
(17 January 2024) Thailand is set to delay the launch of its US$14.3 billion digital wallet handout scheme until after May 2024. Thailand’s Deputy Finance Minister stated that it is ‘unlikely’ the scheme will be launched in May, and that there is no back-up plan if the scheme could not be implemented. The programme was originally slated for February, before being delayed to May. The scheme would see US$285 transferred to 50 million Thais each via a mobile app to spend in their local communities. The digital wallet was a key election campaign policy of the ruling Pheu Thai party. It is among a raft of stimulus measures that Thailand’s government has promised, alongside debt suspension for farmers and a minimum wage hike.

INDONESIA
Central bank keeps policy rates unchanged on 17 January, 2024
(17 January 2024) Indonesia’s central bank, Bank Indonesia (BI), kept its policy rates unchanged on 17 January, 2024. BI claimed this was consistent with efforts to stabilise the rupiah exchange rate and ensure inflation remains within target in 2024. BI left its benchmark 7-day reverse repurchase rate at 6.00%, where it has been since October 2023. Its two other policy rates were also unchanged. BI has targeted inflation between 1.5% to 3.5% for 2024, lower than 2023’s target of 2% to 4%. The central bank forecasts growth of between 4.7% and 5.5% for 2024, compared with 2023’s forecast of 4.5% to 5.3%.

INDONESIA
Indonesia’s trade surplus shrinks to US$36.93 billion in 2023
(15 January 2024) Indonesia’s trade surplus shrank by almost a third to US$36.93 billion in 2023, down from the record US$54.46 billion recorded in 2022. This shrinkage was attributed to a drop in exports and imports along with commodity prices and weakening global trade. Prices of Indonesia’s main commodities, including coal, palm oil and nickel, fell sharply in 2023. Some economists predict a further drop in 2024 albeit at a slower rate. In 2023, exports dropped to US$258.82 billion from US$291.9 billion in 2022. Meanwhile, imports reached US$221.89 billion last year, down from US$237.45 billion the year before.

THE PHILIPPINES
Government to spend US$1.7 billion to boost rice production
(16 January 2024) The Filipino government plans to spend US$1.7 billion to build more storage and other facilities to boost food production and cut prices, including that of rice. The government plans to build facilities that will minimize post-harvest losses and lessen dependence on imports. According to the Philippines’ Agriculture Secretary, the country seeks to modernize farm and fisheries production and develop its logistics system. Around 30% of the Philippines’ farm production is lost due to poor logistics, and authorities claim eliminating such losses will lower the cost of high-value crops and vegetables by as much as 15%. The country incurs 494,000 metric tons a year in post-harvest losses on the staple grain and corn.


RCEP Monitor


CHINA
China’s population falls for second consecutive year in 2023 at 0.15% year-on-year
(17 January 2024) China’s population fell for the second consecutive year in 2023 due to a record-low birth rate and a wave of COVID-19 deaths following the end of lockdown measures. According to China’s National Bureau of Statistics, the total number of people in China declined by 2.08 million, or 0.15%, to 1.409 billion in 2023. In comparison, the population declined by 850,000 in 2022. Due to authorities lifting strict nationwide COVID-19-related measures at the end of 2022, total deaths rose 6.6% to 11.1 million in 2023, the highest level since 1974. Meanwhile, new births fell by 5.7% to 9.02 million. The birth rate reached a record low of 6.39 births per 1,000 people, down from a rate of 6.77 births in 2022. China’s 2023 rate of 7.87 deaths per 1,000 people was higher than the rate of 7.37 deaths in 2022.

CHINA
China’s economy grows by 5.2% year-on-year in 2023, beating official forecast
(17 January 2024) According to China’s National Bureau of Statistics, China’s economy grew by 5.2% year-on-year in 2023, beating an official forecast of roughly 5.0%. The growth rate for the fourth quarter of 2023 was also 5.2% year-on-year, up from 4.9% for the previous period, as government spending helped spur a recovery from the COVID-19 pandemic. Quarterly, GDP in the fourth quarter expanded by 1%, lower than the 1.3% recorded in the previous quarter. Authorities also resumed reporting of the youth unemployment rate, which had been suspended after it hit a record high of 21.3% in June. The rate at the end of December 2023 was measured at 14.9%, which does not include fresh graduates looking for work.

CHINA
China’s coal output reached record high of 4.66 metric tonnes in 2023
(17 January 2024) According to China’s National Bureau of Statistics, China’s coal output reached a record high of 4.66 metric tonnes in 2023. This is an increase of 2.9% year-on-year. In December, coal output reached 414.31 million tonnes, nearly flat with November’s 414 million tonnes and up 1.9% year-on-year. Daily output over the month was 13.36 million tons, slipping from November’s record-high daily average of 13.8 million tons. China’s overall power generation, which is dominated by coal-fired plants, rose 8% year-on-year in December. Analysts are predicting another modest coal production increase in 2024.

CARI Captures Issue 639: Myanmar to begin taxing nationals working abroad to boost foreign-currency reserves

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

MYANMAR
Myanmar to begin taxing nationals working abroad to boost foreign-currency inflows
(07 January 2024) Since mid-December 2023, Myanmar’s embassies in key Asian countries have announced a series of new tax rules to impact Myanmar nationals working in said countries in order to boost foreign-currency inflows. For Myanmar nationals currently residing in Japan, for instance, they are now subject to a 2% income tax, with the amount of tax to be paid depending on their respective income bracket. Myanmar nationals working in South Korea, Singapore, Thailand, and Malaysia are also facing a 2% tax rate as a general rule, though the final amounts owed vary depending on residency status and income level. Under tax reforms for fiscal year 2023, the Myanmar government began requiring nationals living abroad to pay income taxes in the foreign currencies they earn, effective 01 October, 2023.

MALAYSIA
State-owned conglomerate Sime Darby Bhd purchases majority stake in UMW Holdings
(7 January 2024) In December 2023, Malaysian state-owned conglomerate Sime Darby Bhd purchased a majority stake of 61.2% in local automobile major UMW Holdings, hoping it will open up further opportunities in Malaysia’s automobile sector by adding the Toyota and Perodua brands to its local sales and distribution portfolios. Sime Darby Bhd has interests in the automobile and industrial sectors through its subsidiaries Sime Darby Motor and Sime Darby Industrial. Sime Darby Motors focuses on retail, distribution and assembly of vehicles, including for brands like Jaguar, Porsche, BMW, Audi, Volvo, Mazda, Ford, Kia, and BYD. For its part, UMW has interests across the automotive, equipment, manufacturing, engineering and aerospace sectors. UMW operates Toyota’s assembly and manufacturing operations in Malaysia through joint venture UMW Toyota Motor, and also controls leading budget car brand Perodua.

MALAYSIA
Malaysia’s small-to-mid-cap stocks outperform biggest companies due to Johor projects
(08 January 2024) Digital infrastructure and construction projects in the southern Malaysian state of Johor are fueling Malaysia’s small- to mid-cap stocks. The MSCI Malaysia Small Cap Index rose by 15.7% in 2023 in comparison to a 2% gain for the large-cap index, the latter of which includes prominent stocks such as Maybank and Petronas Chemicals Group. The state of Johor has emerged as one of the fastest-growing markets in Southeast Asia, with much of this development heavily connected to neighboring Singapore. Malaysia and Singapore are currently seeking to deepen economic ties by setting up a Special Economic Zone (SEZ) in Johor that would bring tighter business links and better connectivity.

MALAYSIA
Malaysia’s total palm oil stocks fall by 4.64% to 2.29 million tonnes in December 2023
(10 January 2024) According to the Malaysian Palm Oil Board’s latest industry performance report for December 2023, Malaysia’s total palm oil stocks fell by 4.64% to 2.29 million tonnes in December 2023 from 2.40 million tonnes in November. Meanwhile, crude palm oil (CPO) inventory decreased by 9.43% to 1.20 million tonnes from 1.23 million tonnes in November. CPO production fell by 13.31% to 1.55 million tonnes, while palm oil exports dropped by 5.12% to 1.33 million tonnes in December from November’s 1.41 million tonnes. Meanwhile, CPO imports stood at 11,103 tonnes in the same month.

THE PHILIPPINES
Transition plan for jeepneys faces pushback from drivers
(08 January 2024) The Philippines government’s plan to force drivers to transition from traditional jeepneys to minibuses has faced pushback from jeepney drivers who argue they cannot afford to transition their vehicles. Due to jeepney’s diesel engines releasing large amounts of air pollution, the government has been seeking to get rid of them. It had set 31 December, 2023 as a deadline for jeepney drivers and operators to switch from operating traditional jeepneys to minibuses prescribed by the Land Transportation Franchising and Regulatory Board (LTFRB). Jeepney drivers would have to pay US$50,000 for a new minibus. Authorities estimate that 40% of the jeepneys in Metro Manila and 70% nationwide have applied to join the cooperatives. Over the recent holidays, thousands of drivers went on strike and protested in front of the Presidential Palace, calling upon the government to cancel the deadline.

THE PHILIPPINES, INDONESIA
The Philippines and Indonesia agree to bolster cooperation in energy and security
(10 January 2024) During Indonesian President Joko Widodo’s visit to Manila, both Indonesia and the Philippines agreed to bolster cooperation in energy and security. Widodo and Philippines’ President Ferdinand Marcos Jr. witnessed the signing of a memorandum of understanding to deepen bilateral relations on energy. The Philippines gets the bulk of its imported coal from Indonesia, and in 2023 Manila received assurance from Jakarta concerning steady access to the commodity. Indonesia also pushed for improvements in border security cooperation, as well as the settlement of continental shelf boundaries. Widodo also pitched to sell anti-submarine warfare aircraft from Indonesia to the Philippine Navy.

CAMBODIA
Per capita income in Cambodia expected to exceed US$2000 in 2024
(08 January 2024) Cambodia’s per capita income is expected to exceed US$2,000 in 2024, marking an increase of over 8% compared to 2023. Economic growth is expected to reach about 6.6%, with the GDP to reach US$34.92 billion. GDP per capita is anticipated to rise to US$2,071 in 2024, up from US$1,917 in 2023 and US$1,784 in 2022. Experts have noted that Cambodia’s exports to international markets in the past year have shown positive trends despite a sluggish global economy. The Cambodian government is aiming for the country to reach upper-middle-income status by 2030, laying the foundations for it to become a high-income economy by 2050.


RCEP Monitor


JAPAN
Japanese seafood companies seeking to process scallops in Viet Nam after China ban
(06 January 2024) Japanese seafood companies are seeking to process scallops from Hokkaido in Viet Nam in response to China’s recent ban on Japanese seafood imports. Japanese seafood retailer Foodison is partnering with companies including wholesaler Ebisu Shokai and trading houses Ocean Road and Nosui in an arrangement in which scallops from Ebisu are to be purchased by Ocean Road and exported to Viet Nam, where they will be processed and sent back to Japan to be sold to restaurants and retailers by Foodison, Ebisu and Nosui. A lack of manpower in Japan for processing has seen inventories of unprocessed scallops start to pile up after China (where scallops are traditionally sent for processing) imposed restrictions on Japanese seafood imports. These restrictions were in response to Japan releasing treated wastewater from the Fukushima Daiichi nuclear power plant.

JAPAN, CANADA
Honda Motor mulling building electric vehicle plant in Canada
(07 January 2024) Japanese automobile maker Honda Motor is mulling building an electric vehicle plant in Canada, with the project to possibly include the in-house manufacture of batteries. Overall spending on the project could reach up to US$14 billion, making it one of Honda’s largest investments. Honda is currently exploring several sites for the new factory, next to an existing automobile factory in Ontario province. It expects to decide by the end of 2024, with the new facility to go onstream as early as 2028. In December 2023, Canada announced plans to effectively end sales of new passenger vehicles powered only by gasoline or diesel by 2035. Canada also has plentiful renewable energy sources, so its carbon footprint per unit of electricity generated is relatively low, making it an ideal site.

AUSTRALIA
Consumer price indicators rises 4.3% year-on-year in November 2023
(10 January 2024) Australia’s consumer price indicators rose by 4.3% year-on-year in November 2023, lower than economists’ estimate of 4.4% and the smallest annual increase since January 2022. This the second straight month in which Australia’s monthly inflation gauge moderated. When excluding volatile items such as fuel, fruit and vegetables, and holiday travel, the annual rise was 4.8%, lower than October’s 5.1%. This slowdown further bolsters the case for the Reserve Bank of Australia (RBA) to hold rates steady during its next policy decision in February 2024. The RBA has taken its key rate to a 12-year high of 4.35% in an effort to bring inflation down to within its 2% to 3% target band.

CARI Captures Issue 638: Malaysia and Singapore to raise consumption taxes in early 2024

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN
Malaysia and Singapore to raise consumption taxes in early 2024
(28 December 2023) Singapore and Malaysia plan to raise their consumption taxes in early 2024 to broaden their financial base in order to support their aging populations as well as return to fiscal sustainability. Singapore will be raising its goods and services tax (GST) from 8% to 9% on 01 January, 2024, the second of a two-tier increase with the first having occured in January 2023. The tax increase highlights Singapore’s desire to shore up its revenue base in the face of climbing health care costs due to the country’s ageing population. In Singapore’s 2023 budget, the country’s total spending on health care tripled to US$12 billion compared with 10 years earlier. In Malaysia, the government plans to raise its sales and services tax (SST) by two percentage points to 8% in March 2024, excluding essential expenses like food, beverages and telecommunications.

THE PHILIPPINES
International tourist receipts top pre-pandemic levels
(03 January 2024) International tourism receipts in 2023 have managed to eclipse the level prior to the COVID-19 pandemic. According to data by the Department of Tourism, the Philippines registered an estimated US$8.7 billion in international tourism receipts in 2023, up 124.9% year-on-year. This has exceeded the US$8.65 billion registered in 2019, prior to the pandemic. Authorities are targeting 7.7 million international visitor arrivals in 2024, with the Philippines having logged 5.45 million international visitors in 2023, surpassing the 4.8 million target but representing only 66% of total arrivals in 2019. South Korea and the United States were the main tourist sources in 2023.

INDONESIA
Indonesia eyeing higher and earlier debt issuance to pre-empt tighter finances
(03 January 2024) Indonesia is eyeing higher and earlier debt sales to pre-empt finances possibly tightening this year due to a weaker global economy and softer commodity prices reducing revenue and inflows. The government is seeking to raise US$15.5 billion from bond sales in the first quarter of 2024, higher than actual borrowings a year ago as well as the last quarter of 2023. Indonesia began marketing three tranches of benchmark-sized dollar bonds, joining a flurry of global issuance at the start of 2024. Indonesia has set its budget deficit at 2.3% for 2024, after enjoying some tax windfall in 2023 that shrank the gap to the lowest in more than a decade. This provided room for Indonesia to reduce borrowings, boosting the performance of its sovereign debt.

INDONESIA
Indonesia’s rice harvests for January and February 2024 expected to drop 46.3% year-on-year
(03 January 2024) Indonesia’s rice output for January and February 2024 is expected to drop by 46.3% year-on-year due to the El Nino weather phenomenon impacting the harvests. A prolonged drought driven by El Nino is expected to reduce rice output by 2% in 2023, while planting for 2024’s main harvest season has been delayed. El Nino is expected to remain in early 2024 and gradually dissipate by April. The rice harvest in January is expected to produce 930,000 tons, while the harvest in February is expected to produce 1.32 million tons, against monthly consumption of 2.54 million tons. Indonesia has set a target of producing 32 million tons of rice in 2024, up 3.56% from an estimated 30.9 million in 2023.

VIET NAM
Viet Nam’s economy expands by 5.05% in 2023, missing official growth target
(29 December 2023) According to Viet Nam’s General Statistics Office, Viet Nam’s economy expanded by 5.05% in 2023, missing the official growth target of 6.5%. This was primarily attributed to slowing overseas demand. This year’s growth was also below the average annual growth of 5.87% during the previous decade. Viet Nam’s economy expanded by 6.72% in the fourth quarter of 2023, a slight increase from the 5.47% expansion recorded in the third quarter and 4.25% recorded in the second quarter. Viet Nam’s annual exports fell by 4.4% from 2022 to US$355.5 billion, with shipments of coffee, a key export commodity, down 9.6% year-on-year to 1.6 million metric tons. Retail sales rose 9.6% year-on-year, while foreign tourist arrivals shot up to 12.6 million visitors from 3.6 million in 2022.

THAILAND, CHINA
Thailand and China set to permanently waive visa requirements for each other
(03 January, 2024) Thailand and China will permanently waive visa requirements for each other’s citizens from March 2024 onwards. Thailand had initially waived visas for Chinese nationals in September 2023 in a bid to boost tourist arrivals. More than 22,000 Chinese nationals entered Thailand in the first two days of the waiver. Thai authorities expect some 3.5 million Chinese tourists to have visited Thailand in 2023, which is short of its 4 million target. This is also less than half the nearly 11 million Chinese tourists who visited Thailand in 2019. The Thai government has set a target of 8.2 million Chinese tourists for 2024.

THE PHILIPPINES
Inflation in the Philippines cools to 22-month low in December 2023
(05 January 2024) Consumer prices in the Philippines rose by 3.9% year-on-year in December 2023, a 22-month low. While inflation eased back to within the Bangko Sentral ng Pilipinas’ (BSP) 2% to 4% goal for the first time since March 2022, the 2023 average of 6% missed the inflation target for a third straight year. Rice inflation accelerated for the second straight month to 19.6% year-on-year, the fastest pace since March 2009. In response, the government is mulling further cutting tariffs on rice imports to help cool rice prices. The BSP stated that they have gauged it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.


RCEP Monitor


SOUTH KOREA
US$18.8 billion of foreign direct investment flows into South Korea in 2023
(04 January 2024). South Korea drew in a record US$18.8 billion worth of foreign direct investment in 2023, a 3.4% increase year-on-year. The electronics sector alone accounted for US$3 billion of the total, with the rise in investments indicating investors remain bullish about the long-term prospects of South Korea’s technology industries. Semiconductors and rechargeable batteries represent two major pillars of the country’s electronics industry. While global consumer demand for some electronic products remains slow, semiconductors regained strength in late 2023, with the industry shipping 21.8% more year-on-year in December 2023. Exports of rechargeable batteries, used for electric vehicles, slid 1% in December after a brief double-digit expansion in November.

CHINA
China’s BYD overtakes Tesla in electric car sales in last quarter of 2023
(03 January 2024) China’s BYD overtook Telsa in electric car sales in the last quarter of 2023. The company claimed it had sold 526,000 battery-only vehicles in the last quarter, as compared to 484,500 electric vehicles sold by Tesla. This marked the first quarter in which BYD’s battery-only sales have outpaced Tesla’s. However, Tesla sold more electric vehicles for the whole of 2023, delivering 1.8 million. In comparison, BYD sold 1.6 million battery-only vehicles for the whole of 2023, while selling more than 3 million so-called-new energy vehicles (NEVs), which includes both battery-only vehicles and hybrids.

CHINA, EU
China launches anti-dumping investigation into liquor products from the EU
(05 January 2024) China is launching an anti-dumping investigation into liquor products such as brandy from the European Union (EU). Beijing claimed the investigation was instigated by an application from a domestic liquor association, and targets French cognac. It is believed the anti-dumping investigation was launched in retaliation to the EU opening a probe into China’s electric vehicle subsidies. China’s investigations will focus on brandy products that come in smaller than 200 liter containers and hail from the EU. China imported US$1.57 billion worth of spirits from distilled grape wine in 2023 through November. Meanwhile, the country exported about US$12.7 billion worth of electric vehicles to the EU in the same period.

CARI Captures Issue 637: Lao PDR frames its 2024 ASEAN Chairmanship as ‘Enhancing Connectivity and Resilience’

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

LAO PDR, ASEAN
Lao PDR frames the theme of its 2024 ASEAN Chairmanship as ‘Enhancing Connectivity and Resilience’
(21 December 2023) Lao PDR has framed the theme of its 2024 ASEAN Chairmanship as ‘Enhancing Connectivity and Resilience’. At the Chairmanship handover ceremony in September 2023, Lao PDR’s Prime Minister Sonexay Siphandone highlighted that Vientiene would focus on further consolidating the ASEAN Community including enhancing connectivity and economic integration, narrowing the development gap, advancing digital transformation, promoting people-to-people-exchanges, as well as promoting climate resilience and health development. In preparation for its Chairmanship, Laotian authorities have started work on the necessary infrastructure including improving roads and airports, meeting venues, communication and internet facilities, tourism destinations, and accommodation. ASEAN Dialogue Partners have also offered their support, such as through the provision of vehicles and IT systems, capacity building, and English language training.

MALAYSIA
28,310 people evacuated due to flooding in six states
(27 December 2023) According to Malaysia’s National Disaster Management Agency (Nadma), flooding has hit a total of six states in Malaysia, with the number of evacuees as of 6 AM on 27 December, 2023 rising to 28,310 people compared to 25,938 on the evening of 26 December. Kelantan remains the state with the highest number of evacuees at 17,466, who have been placed in 89 temporary relief centres. This is an increase from the 15,145 evacuees housed in 92 centres at 4 PM the day prior. In neighboring Terengganu, the number of flood victims was recorded at 10,103. Johor and Sabah state were the latest states to be impacted by flooding.

SINGAPORE
Annual vessel arrival tonnage at Port of Singapore in 2023 hits over 3 billion gross tonnage
(26 December 2023) According to the Maritime and Port Authority of Singapore (MPA), the annual vessel arrival tonnage – a measure of the traffic of vessels – at the Port of Singapore for 2023 hit just over 3 billion gross tonnage in 2023. This is compared to the 2.83 billion gross tonnage recorded in 2022. The Port of Singapore had previously reached 1 billion gross tonnage in 2004 and 2 billion gross tonnage in 2011. Singapore’s Acting Minister for Transport noted that the 3 billion gross tonnage breakthrough was significant given the maritime industry’s downturn in 2016 and supply chain disruptions resulting from the COVID-19 pandemic.

SINGAPORE
Core inflation eases slightly to 3.2% year-on-year in November 2023
(26 December 2023) According to a joint statement by the Monetary Authority of Singapore (MAS) and the ministry of trade and industry, Singapore’s core inflation eased slightly to 3.2% year-on-year in November 2023, compared to the 3.3% growth recorded in October 2023. This slowdown was attributed to lower inflation for retail and other goods, food, as well as electricity and gas. Core inflation excludes private road transport and accommodation. This slowdown will provide the MAS room to extend its monetary-policy pause during its next monetary decision due in late January 2024. The MAS has kept its policy stance unchanged at its two scheduled reviews in 2023 after tightening settings five times between October 2021 and 2022.

THAILAND
Thailand to increase its minimum wage in January 2023, to raise it further in March
(26 December 2023) Thailand’s government has confirmed it will raise its minimum wage in January 2023 while also planning to raise it further in March 2023. While a wage committee had previously agreed to increase the daily minimum wage by 2.37%, effective in January 2024, Prime Minister Srettha Thavisin had deemed the hike too low. While the government will now commit to the previous deal, the committee will meet in January to seek a further wage hike. Thailand’s ruling Pheu Thai party campaigned on a populist platform with a key plank of raising the daily minimum wage to US$11.61, despite concerns by business groups over competitiveness.

VIET NAM
Vietnamese gaming company VNG seeks listing in New York City
(24 December 2023) Vietnamese gaming company VNG is seeking a listing on the Nasdaq in New York City as it seeks to become a global gaming company. The company, based in Ho Chi Minh City, was founded in 2004 as Vinagame and has grown to become Viet Nam’s leading game publisher. The company has expanded to other areas as well, running a digital wallet, cloud services, and Viet Nam’s most popular messaging platform. Gaming remains a big part of the company’s operations, with 80% of revenue still earned in that division. The company publishes some 10 games a year in Viet Nam and other parts of Southeast Asia, and is seeking to expand into other markets such as Latin America and the Middle East.

SINGAPORE
Nightclub operator Zouk eyeing opening new clubs in New York, Miami and Dubai
(25 December 2023) Singapore-based nightclub and entertainment operator Zouk is eyeing new markets to open clubs, including New York, Miami, and Dubai. The nightlife brand had recently secured deals for venues in Tokyo and Los Angeles. Zouk opened its first nightclub in Singapore in 1991, before proceeding to open Zouk Genting nightclub in the Malaysian resort town of Genting Highlands in 2019. Zouk was previously owned by Malaysian gaming and resorts conglomerate Genting Hong Kong, before being sold to Tulipa, another Malaysian company. The CEO of Zouk noted that spending is currently down 20% to 30% from the previous year.


RCEP Monitor


JAPAN
Japan preparing regulations to require tech giants to allow third-party app platforms and billing
(27 December 2023) Japan is currently preparing regulations that will require tech giants like Google and Apple to allow outside app stores and payments on their mobile operating systems. These antitrust laws are aimed at tackling the abuse of these tech giant’s dominant position within the Japanese market. The proposed legislation is slated to be sent to parliament in 2024 and would focus on restricting moves by platform operators to keep users in the operators’ own ecosystems while shutting out rivals, focusing mainly on the four areas of app stores and payments, search engines, browsers, and operating systems. The plan will allow the Japan Fair Trade Commission to impose fines for violations.

CHINA
China approves 105 domestic games in sign of softening stance towards gaming industry
(25 December 2023) On 25 December, 2023, China approved 105 domestic games in the latest sign of Chinese authorities softening its stance towards the gaming industry after its move to tighten industry restrictions led to a US$80 billion rout last week. On 22 December, 2023, the top gaming regulator National Press and Publication Administration announced new rules to limit the development of online games, including an unspecified cap on spending by adult players. This announcement rekindled fears of a new tech crackdown by the Chinese state. China’s leading game publishers Tencent Holdings Ltd. and NetEase Inc. saw their market value plunge after the announcement was made.

CHINA
Earthquake causes US$74.6 million worth of damage in northwestern province of Gansu
(24 December 2023) A 6.2 magnitude earthquake has caused US$74.6 million worth of direct economic losses in the northwestern province of Gansu, which hosted the epicenter. Officials estimated that the earthquake inflicted losses that included US$48.27 million on animal husbandry and US$14.28 million on crop production. As of 22 December, 2023, the earthquake has reportedly killed 148 people and injured 781. The earthquake is set to further burden the finances of Gansu, an underdeveloped province whose economic output ranked 27th out of 31 Chinese provinces and municipalities as of 2022.

CARI Captures Issue 636: ASEAN and Japan agree to deepen economic and security cooperation

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN, JAPAN
ASEAN and Japan agree to deepen cooperation regarding economic and security issues
(17 December 2023) On 17 December, 2023, ASEAN and Japan agreed to deepen cooperation regarding security and economic issues at a summit in Tokyo commemorating 50 years of friendship and cooperation. In a ‘joint vision statement’ issued after the gathering, the leaders pledged to enhance cooperation in areas as varied as maritime security, supply chains, sustainable energy practices, and people-to-people exchanges. The leaders also launched a new initiative for the next-generation auto industry aimed at mapping out strategies to enable ASEAN members to remain a major hub of auto production and exports. Other efforts to boost the economy included supporting digital startups as well as accelerating public and private investment to achieve decarbonization.

THAILAND
Cabinet approves debt suspension for smaller businesses and support for retail debtors
(19 December 2023) In order to address the country’s ongoing debt issues, Thailand’s cabinet has approved debt suspension for smaller businesses as well as support for retail debtors. The programme is aimed at helping the 10.3 million Thais believed to be struggling to service their debts. At the end of the second quarter of 2023, household debt stood at 90.7%. The government also aims to maintain diesel prices at about US$0.86 per litre and electricity bills at up to US$0.12 per unit to help lower energy costs. The diesel price cap would be maintained for three months and supported by tax measures and the national oil fund. While new electricity bills will be decided in January 2024, vulnerable groups will be offered the current rate of US$0.11 per unit. Government subsidies have helped keep inflation low, with headline inflation measuring at -0.44% in November 2023, the lowest in nearly three years.

MALAYSIA
Malaysia sees 2.4% year-on-year decline in overall trade in November 2023
(19 December 2023) According to Malaysia’s Ministry of Investment, Trade and Industry (Miti), Malaysia recorded a 2.4% year-on-year decline in trade growth to US$49.51 billion in November 2023. Exports dropped by 5.9% year-on-year to US$26.08 billion, while imports grew by 1.7% year-on-year to US$23.43 billion. Malaysia’s trade surplus for the month measured at US$2.65, which is the lowest surplus recorded since May 2020. Shipments of Malaysian manufactured goods saw a contraction of 6.7% year-on-year, while exports of mining goods saw growth of 0.5% year-on-year. Shipments of agricultural goods meanwhile saw a contraction of 5.5% year-on-year.

MALAYSIA, JAPAN
Malaysia attracts potential investments worth US$1.40 billion
(19 December 2023) Malaysia has managed to attract some US$1.40 billion worth of potential investments from Japan during Prime Minister Anwar Ibrahim’s visit to Japan. Anwar noted that the Malaysia-Japan relationship is seeing a new shift in terms of investment, trade, education and technology cooperation. Anwar noted that the potential investments could be in the form of new investments or expansion of existing investments, and involves a wide range of sectors including renewable energy, electrical and electronics, chemicals and digital economy.

CAMBODIA, JAPAN
Number of users of Cambodian digital currency Bakong reaches 10 million
(19 December 2023) According to the National Bank of Cambodia (NBC), the number of users for Cambodia’s digital currency Bakong has reached 10 million. This indicates that some 60% of Cambodia’s population is likely able to use Bakong to make payments or transfer money. The NBC jointly developed Bakong in cooperation with Soramitsu, a Tokyo-based blockchain technology startup. The digital currency first went into circulation in October 2020. Bakong has been described as the world’s first central bank digital currency, and enables anyone to make monetary transactions with a smartphone. As for taking Bakong digital transactions to other countries, the NBC has already launched cross-border payment connectivity with Thailand, Lao PDR and Viet Nam.

THE PHILIPPINES
Philippines’ central bank decides to maintain inflation target range of 2% to 4% through 2026
(21 December 2023) On 21 December, the Philippines’ central bank stated it would maintain its inflation target range of 2% to 4% through 2026, and reiterated its readiness to tweak monetary policy to achieve targets. According to the central bank, the inflation target range remained an ‘appropriate representation of the medium-term goal for price stability’. The central bank noted that its current higher-for-longer policy stance, coupled with non-monetary measures by the government, is ultimately aimed at a sustained return of inflation to the medium-term target and to keep inflation expectations anchored. Inflation in the Philippines eased to 4.1% in November 2023.

VIET NAM
Viet Nam to lift regional minimum salary for laborers by 6% in 2024
(21 December 2023) Viet Nam intends to lift its regional minimum salary for laborers by 6% in 2024, with the National Wage Council having granted the green light to the increase and submitting it to the government for approval. If approved, the regional minimum wage increase will take effect on 01 July, 2024. The regional minimum salary for workers in Region I, which includes urban areas of Hanoi and Ho Chi Minh City, is set to rise to US$204 a month, while that of Region II, which includes rural areas of the two cities along with major urban areas in the country like Can Tho, Danang and Hai Phong, is set to increase to US$181. Meanwhile, the minimum salary for workers in Region III, which includes the cities and districts of northern Bac Ninh, Bac Giang and Hai Duong provinces, is poised to climb up to US$158. Meanwhile, in Region IV, which comprises the rest of the country, the minimum salary is poised to rise to US$141.


RCEP Monitor


CHINA, JAPAN
Chinese electric vehicle maker BYD seeking to crack Japanese market
(18 December 2023) China’s top electric vehicle (EV) maker BYD is seeking to crack the Japanese market, seeing it as a gateway to global markets. BYD first entered the Japanese market in January 2023, and has set a goal of selling 30,000 EVs annually in Japan by 2025. Japan is the world’s fourth-largest auto market, with Japanese automakers holding a market share surpassing 90%. BYD sold 2.08 million vehicles globally during the first three quarters of 2023, raising global sales volume 75% year-on-year. In the third quarter of 2023, BYD was roughly 3,400 units shy of beating world EV leader Tesla. BYD intends to build a web of dealerships in Japan in order to reach out to Japanese consumers.

JAPAN
Japanese exports contract by 0.2% to US$61 billion in November 2023
(20 December 2023) Japanese exports contracted by 0.2% year-on-year to US$61 billion in November 2023, the first contraction in three months. Imports meanwhile fell by 11.9%, resulting in an overall trade deficit of US$5.42 billion. While automobile exports increased by 16.3%, those of steel dropped 11.6%, while chip manufacturing equipment shipments dropped by 10.6%. While exports to the EU fell for the first time in 33 months at 0.03%, exports to the U.S. grew by 5.3% for a 26th consecutive month of expansion. Meanwhile, China-bound exports fell 2.2%, the 12th straight month of decline.

NEW ZEALAND
Government predicts smaller budget deficit for fiscal year ending 30 June, 2024
(20 December 2023) New Zealand’s new centre-right government projected a smaller budget deficit at its half-yearly economic update. The government forecast a budget deficit of US$5.84 billion for the fiscal year ending 30 June, 2024, smaller than the deficit of US$7.11 billion forecasted in the update released ahead of the election. It continues to expect a return to a US$87.46 million surplus by 2026/27. While net debt under the old calculations was forecast to peak at 43.5% of GDP in 2023/24, these forecasts were finalized on 24 November, 2023 ahead of the formation of the new government, and did not take into account new policies or the surprisingly weak GDP data released last week. The new government’s proposed spending cuts are expected to be broadly neutral in terms to the overall fiscal outlook once combined with other signaled commitments.

CARI Captures Issue 635: Taiwanese startups eye ASEAN markets due to China risks

Given recent developments in the region, Captures will widen its scope to include news related to members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. The other weekly newsletters under CARI, China-ASEAN Monitor and Mekong Monitor will also be consolidated into the Captures newsletter. We hope this new version of Captures will serve you better and look forward to providing a curation of stories relevant to ASEAN and its trading partners.

ASEAN, TAIWAN
Taiwanese startups eye ASEAN markets due to China risks
(12 December 2023) Technology startups in Taiwan are increasingly eyeing ASEAN markets for further expansion as the prospects of stability for doing business in China wanes. According to Taiwan’s Ministry of Economic Affairs, Taiwanese companies invested more in Southeast Asia and South Asia than in China for the first time in 2022, with total investments into the region reaching US$5.2 billion. In comparison, a total of US$5 billion was invested into China. In November 2023, a delegation of close to 30 Taiwanese startups met in Singapore seeking regional partnerships. This delegation was led by Taiwan’s deputy minister of National Development Council, an agency overseeing efforts to help the island’s startups access global markets. This would be the first time that the council led a business expedition to Singapore for Taiwanese startups.

INDONESIA
TikTok announces US$1.5 billion investment into GoTo to restart e-commerce business in Indonesia
(11 December 2023) Chinese short video app TikTok announced a US$1.5 billion investment into GoTo in a deal that would allow it to restart its e-commerce business in Indonesia. Under the terms of the deal, TikTok’s e-commerce platform TikTok Shop will be merged with GoTo’s e-commerce platform Tokopedia, with TikTok having a controlling stake in the entity. The strategic partnership will begin with a pilot period carried out in close consultation with and supervision by the relevant regulators. The deal is expected to be closed in 2024. TikTok Shop was forced to close in October 2023 after Indonesian authorities banned direct sales on social media to protect millions of small businesses.

MALAYSIA
Chief of state pension fund appointed as second finance minister
(12 December 2023) Malaysian Prime Minister Anwar Ibrahim made significant changes to his cabinet on 12 December, 2023 amidst dropping approval ratings. Among the new figures in the cabinet included Amir Hamzah Azizan, the CEO of the state pension fund Employees’ Provident Fund (EPF), who was appointed to the position of second finance minister. The selection of the EPF CEO was in response to public perceptions that the finance ministry had been neglected due to Anwar’s other responsibilities as prime minister. Former defense minister Mohamad Hasan was moved to the foreign ministry, while deputy prime minister Fadillah Yusof was moved to the newly-created energy transition and public utilities portfolio from the commodities ministry. Popular lawmaker Dzulkefly Ahmad, meanwhile, returns to the post of health minister. Anwar’s approval ratings have dropped amidst an economic slowdown and rising consumer costs.

MYANMAR
Myanmar’s economy expected to grow just 1% over the year to March 2024 amidst border disruptions
(12 December 2023) According to the World Bank, Myanmar’s economy is expected to grow just 1% over the year to March 2024 amidst border disruptions caused by anti-junta resistance elements. GDP growth is expected to remain stagnant at about 2% next fiscal year. The ongoing fighting has disrupted Myanmar’s trade with its neighbors across land borders, which accounted for 40% of its exports and 21% of its imports in the six months to September 2023. The volatility of the kyat, persistent power disruptions and high inflation is also expected to hammer households and businesses. Inflation is set to remain at around 20% until March 2024.

THE PHILIPPINES
International tourist arrivals in 2023 breach 5 million mark
(12 December 2023) According to the Department of Tourism, international tourist arrivals to the Philippines in 2023 breached the 5 million mark, logging in at 5,067,752 as of 12 December, 2023. Authorities had set a target for 2023 of 4.8 million arrivals. Due to these developments, tourism contributed nearly US$7.85 billion to the Philippines’ economy this year. In 2022, 2.6 million foreign tourists had visited the country. The Philippines’ recovery from the COVID-19 pandemic from January to November 2023 in terms of international tourist arrivals was measured at 65%. This is compared to the 62% recovery found among many other nations in the Asia-Pacific.

VIET NAM
Viet Nam to see 32% growth in coffee consumption through 2027
(10 December 2023) According to Euromonitor Asia, Viet Nam is expected to see 32% growth in coffee consumption through 2027. Alongside India, Viet Nam will lead coffee consumption in the Asia region through the coming years. The Philippines and Indonesia are also expected to see significant growth in coffee consumption. While Viet Nam is already the world’s largest exporter of robusta, Vietnamese coffee has also become a cultural export, with the country having popularized its distinctive drip filters and ca phe sua da (iced milk coffee) around the globe. In making their projections, Euromonitor Asia observed that coffee drinking is correlated with discretionary income and urbanization.

LAO PDR
ADB approves US$32 million financing package to help Lao PDR strengthen climate change response
(12 December 2023) On 12 December, 2023, the Asian Development Bank (ADB) approved a US$32 million financing package to help Lao PDR strengthen its response to climate change as well as to help improve the livelihoods of agricultural communities in Vientiane and the central provinces of Bolikhamxai and Khammouan. Dubbed the Flood and Drought Mitigation and Management Sector Project, the package will aid Lao PDR in its efforts to reduce financial and economic losses from floods and droughts as well as enhance dietary diversity. Lao PDR is highly vulnerable to extreme weather events including floods and droughts, which is estimated to reduce the country’s GDP by up to 2% annually.


RCEP Monitor


JAPAN
Wholesale inflation eases to 0.3% yeah-on-year in November 2023
(12 December 2023) Wholesale inflation in Japan eased to 0.3% year-on-year in November 2023, following a 0.9% gain in October. This comprised the 11th straight month of slowdown since December 2022, when wholesale inflation hit 10.6%. While the slowdown was attributed partly to the base effect of last year’s sharp rise in raw material costs, analysts expect wholesale prices to start falling from December onwards due to slumping oil prices and the yen’s recent appreciation. This latest data underscored the Bank of Japan’s view that commodity-driven inflation will gradually dissipate, with the focus to shift towards whether domestic demand will be strong enough for the central bank to start normalizing its ultra-loose monetary policy.

JAPAN
Government plans to issue US$24.7 billion package to help stem falling birthrates
(12 December 2023) The Japanese government plans to issue a package of different measures to help stem falling birthrates by year-end, which will call for annual outlays of US$24.7 billion. Dubbed the Children’s Future Strategy Policy, the package contains an expansion of child allowances, free university education for families with three or more children, and regulatory changes to improve day care services. The expansion of child allowances will include the elimination of income restrictions, the extension of the benefit period to high school-age children; and the doubling of the monthly payment to US$306 for third and subsequent children. Meanwhile, for households with three or more children, tuition and enrollment fees for universities, junior colleges and technical colleges will be made “free of charge” without income restrictions from fiscal 2025 onwards.

SOUTH KOREA
South Korea unveils US$29 billion financial package to aid EV battery makers diversify supply chains
(13 December 2023) South Korea unveiled a US$29 billion financial package over the next five years aimed at helping local electric vehicle (EV) battery makers diversify their supply chains. This comes as the US calls for a reduced reliance on China, which is the world’s biggest EV and battery maker. The financial aid will take the form of loans, credit guarantees, lower borrowing rates, and insurance premiums for investment in manufacturing facilities in North America, where South Korean EV battery manufacturers can benefit from tax breaks from the Biden administration’s Inflation Reduction Act. The Korean government also aims to set up a fund to help firms secure minerals and expand their production overseas.