Captures has widened its scope to include news related to all the members of the Regional Comprehensive Economic Partnership (RCEP) agreement which was signed towards the end of 2020. Besides the ASEAN Member States, this includes Australia, New Zealand, China, Japan, and South Korea. 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.

THAILAND
Thailand’s 2024 auto production revised downwards to 1.5 million units
(26 November 2024) The Federation of Thai Industries (FTI) has revised down Thailand’s 2024 auto production forecast to 1.5 million units, a 12% reduction from its earlier estimate of 1.7 million and a 21% decrease from the initial 1.9 million projection. This marks an 18% year-on-year decline, the steepest drop since 2020. A key factor driving the reduction is a stagnating domestic market, with the forecast for vehicles built for domestic sale lowered by 100,000 units to 450,000. Tightened auto loan approval criteria, in response to the Bank of Thailand’s concerns over high household debt (around 90% of GDP), have led to loan rejections for many low- to middle-income earners. Exports, accounting for roughly half of production, have also been downgraded by 100,000 units to 1.05 million due to weaker demand in Southeast Asia and the Middle East. The FTI expressed hope for economic recovery in 2025 but acknowledged uncertainty surrounding the resolution of household debt issues. Thailand’s auto industry faces additional challenges, with automakers like Isuzu, Honda, Nissan, and Suzuki scaling back production or exiting the market. In October, total production dropped 25%, with domestic production falling by 52% and export production down by 7%.

THAILAND
ADB secure USD 820 million financing package for 12 renewable energy projects in Thailand 
(29 November 2024) The Asian Development Bank (ADB) and Gulf Renewable Energy Company Limited have secured a USD 820 million financing package to support the development of 12 renewable energy projects in Thailand. These projects include eight ground-mounted solar photovoltaic (PV) plants with a contracted capacity of 393 MW and four solar PV plants with battery energy storage, providing 256 MW of generation capacity and 396 MWh of storage. The financing package, arranged by ADB, includes USD 260 million from ADB’s ordinary capital resources and USD 529 million in parallel loans from institutions such as the Asian Infrastructure Investment Bank, DEG, the Export-Import Bank of China, and KEXIM Global (Singapore). An additional USD 31.35 million in concessional finance is being provided by the Clean Technology Fund. These initiatives align with Thailand’s goal to increase renewable energy generation to 50% by 2037 under its 5-gigawatt renewable energy feed-in-tariff programme, which aims to double installed wind and solar capacity by 2030.

INDONESIA
Jakarta Composite Index declines by approximately 10% from 2023 peak  
(29 November 2024) Indonesia’s Jakarta Composite Index (JCI) has declined by approximately 10% from its 2023 peak, marking a technical correction. The index fell as much as 1.3% to its lowest level since 6 August, with PT Alamtri Resources Indonesia and PT Bank Mandiri Persero contributing significantly to the drop. Foreign investors sold a net USD 52.9 million in equities on Thursday, marking the 16th consecutive day of outflows as the strengthening US dollar reduced the attractiveness of emerging-market assets. Indonesia’s GDP growth for Q3 2023 was the slowest in a year, and corporate profit growth also softened, exacerbating market concerns. The rupiah has weakened by 1% against the dollar in November. JPMorgan analyst Henry Wibowo attributed the decline to foreign fund outflows and currency pressures. Under new President Prabowo Subianto, the government is preparing measures to boost purchasing power following factory closures and job losses.

INDONESIA
Indonesia rejects Apple’s USD 100 million investment proposal to lift iPhone 16 sales ban
(25 November 2024) The Indonesian Ministry of Industry has rejected Apple’s USD 100 million investment proposal aimed at lifting a sales ban on the iPhone 16, citing dissatisfaction with its scope and non-compliance with local manufacturing requirements. Apple still owes USD 10 million from a prior USD 107 million investment pledge for 2023, which was intended to fulfil the mandate for 35% locally produced components in electronic devices. The ministry compared Apple’s proposal to investments by other smartphone manufacturers with local production facilities and deemed it inadequate in terms of added value, state revenue, and job creation. Apple has relied on its Apple Academy centres to meet localisation rules but would need to submit new proposals every three years to continue this approach. The ministry is summoning Apple to address the unpaid investment and discuss extending commitments through 2026, while urging the company to consider building local manufacturing facilities to align with fairness principles and eliminate recurring negotiations. Revisions to local content calculation rules are also under consideration to reflect evolving industry dynamics. Apple has not commented on the matter.

VIET NAM, CANADA
Canada opens Export Development Canada (EDC) branch in Ho Chi Minh City 
(28 November 2024) Export Development Canada (EDC) has opened a branch in Ho Chi Minh City, Viet Nam, to provide financing and consulting services as part of Canada’s efforts to reduce trade reliance on the U.S., which accounted for 57.4% of Canadian exports in 2023. This move comes amid growing trade tensions, including U.S. President-elect Donald Trump’s proposed tariffs on Canada, Mexico, and China. The EDC signed memoranda with Viet Nam’s FPT and Masan, aiming to enhance Canadian exports and investment opportunities. In 2023, Canada imported CAD 13 billion (USD 9 billion) in goods from Viet Nam, over 15 times its exports to the country, which mainly comprise farm products and machinery. Viet Nam, in turn, exports electronics, apparel, and footwear to Canada but underutilises tariff reductions under the CPTPP, which Canada plans to address. The new office will work with EDC’s nine other regional offices and focus on clean technology, renewable energy, infrastructure, and manufacturing. Vietnam’s exports to the U.S. and China represented 27.5% and 19.9% of its total exports in 2023, respectively. The EDC aims to facilitate broader collaboration between Canadian and Vietnamese businesses, signalling Vietnam’s potential as a key market.

MALAYSIA
Malaysian air cargo operator hopes to capitalize on growing cross-border e-commerce between China and ASEAN
(28 November 2024) Teleport, a Malaysian air cargo operator, has opened an office in Shenzhen to capitalise on the growing demand for cross-border e-commerce between China and Southeast Asia. With over 40 staff based in China, the company is targeting faster delivery times, aiming to reduce the standard five-day delivery process to next-day delivery. Teleport collaborates with major Chinese logistics firms, including SF Airlines, DHL, and Nippon Express, and partners with e-commerce platforms like TikTok Shop, Shopee, and Temu. It forecasts a USD 3.8 billion freight market value for trade between China and Southeast Asia’s top five e-commerce markets by 2025, supported by international e-commerce growth from USD 194 billion in 2023 to over USD 330 billion by 2025. Teleport currently ships over 81,000 parcels daily from China to Southeast Asia, contributing to a 35% year-on-year revenue increase in Q2 2023 to MYR 225 million (USD 47.5 million). Expansion plans include the Middle East, India, and potentially Europe and South America, despite challenges such as fluctuating demand and geopolitical risks. The company emphasises transparency and operational flexibility to maintain service reliability.

THE PHILIPPINES
S&P revises the Philippines’ credit outlook from stable to positive
(26 November 2024) S&P Global Ratings revised the Philippines’ credit outlook from stable to positive while maintaining its long-term foreign currency debt rating at BBB+, citing fiscal reforms, improved infrastructure, and a stronger policy environment. The revision suggests a potential upgrade to an “A-” rating within 24 months, contingent on narrowing current account deficits and faster fiscal consolidation. This could lower borrowing costs and enhance the country’s investment appeal. The Philippines, currently rated Baa2 by Moody’s and BBB by Fitch, remains one of Asia’s fastest-growing economies, with projected GDP growth of 5.5% in 2023, ahead of Indonesia and China but below Viet Nam’s 7.4%. The Bangko Sentral ng Pilipinas highlighted the country’s robust foreign reserves as a buffer against global economic risks. S&P warned the outlook could revert to stable if economic recovery weakens or fiscal and debt positions deteriorate. Third-quarter growth slowed to 5.2% due to reduced government spending and declining exports.