ASEAN
Experts advocate for ASEAN regional strategy to achieve greater food security
(12 February 2025) Asean’s agricultural imports reached USD 129.13 billion in 2023, with Viet Nam accounting for 20.9% (USD 27.05 billion), followed by Indonesia (USD 26.06 billion) and Malaysia (USD 20.34 billion). Key imports included wheat (USD 9.46 billion), soybeans (USD 5.21 billion), and corn (USD 5.21 billion), with the United States (USD 13.9 billion), Brazil (USD 13.8 billion), China (USD 13.3 billion), and Australia (USD 12.3 billion) as top suppliers. Experts advocate for a regional strategy to enhance intra-ASEAN food trade, reduce reliance on external markets, and eliminate non-tariff barriers. The Malaysia-based Khazanah Research Institute emphasised integrated supply chains, while other experts highlighted the need to secure fertilisers, seeds, and animal feed. Indonesia’s President Prabowo Subianto aims for food self-sufficiency within four years. PNB Research Institute suggested focusing on climate-suited crops like rice and tropical fruits, alongside collective bargaining for essential imports.

SINGAPORE, TAIWAN
Taiwanese investments into Singapore surpass that of China for first time since 1991  
(11 February 2025) In 2024, Taiwanese investments in Singapore reached USD 5.81 billion, surpassing the USD 3.65 billion invested in China—the first occurrence since 1991. A significant 87% of these investments targeted electronic parts and components manufacturing, including chip fabrication, while 10% were directed towards the financial and insurance sectors. United Microelectronics Corporation (UMC) is set to commence commercial production at its new USD 5 billion Singapore fabrication plant in 2026, which will also house UMC’s largest research and development centre outside Taiwan. Additionally, Vanguard International Semiconductor Corp and NXP Semiconductors initiated construction of a USD 7.8 billion 12-inch wafer fabrication plant in Tampines in December 2024, with production expected to begin in 2027. Cathay United Bank plans to double its Singapore branch workforce to approximately 200 employees in 2025, reflecting increased investments and client demand. Analysts attribute this shift to geopolitical tensions and a realignment of global supply chains favouring Southeast Asia. Singapore’s politically neutral stance, efficient infrastructure, and strong rule of law enhance its appeal as an investment destination for Taiwanese firms. This trend is anticipated to continue amid ongoing geopolitical uncertainties.

INDONESIA
Indonesia diversifying trade partnerships amidst rising global protectionism
(13 February 2025) Indonesia is adjusting its trade strategy in response to rising global protectionism, with Indonesia’s Deputy Trade Minister stating that the government is safeguarding domestic manufacturers while expanding export markets. The US’s potential tariffs on Chinese goods could present opportunities for Indonesia, but officials are proceeding cautiously before implementing import regulations. Indonesia, a BRICS member, has not been directly targeted by US trade actions but remains watchful. Meetings with the US ambassador are scheduled next week. The government is diversifying trade partnerships, negotiating Comprehensive Economic Partnership Agreements with Peru and Canada, and reopening talks with the EU despite challenges related to climate policies, particularly the EU’s deforestation law. Strengthening trade relations with India is also a priority, following President Prabowo Subianto’s recent visit to Prime Minister Narendra Modi.

INDONESIA
Indonesia to launch USD 900 billion sovereign wealth fund on 24 February
(13 February 2025) Indonesia will launch the Danantara sovereign wealth fund on 24 February, with assets under management exceeding USD 900 billion (MYR 4 trillion), following parliamentary approval last week. President Prabowo Subianto stated the fund will invest in high-impact projects across renewable energy, advanced manufacturing, downstream industries, and food production to support the government’s goal of 8% annual economic growth by 2029, up from 5% in 2024. Modelled after Singapore’s Temasek, Danantara will take over state-owned company holdings, including Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia, from the Ministry of State-Owned Enterprises. Prabowo also announced that the government has saved over USD 20 billion—approximately 10% of annual spending—through efficiency measures, with funds allocated to more than 20 large-scale projects focused on nickel, bauxite, copper, and other critical minerals.

THAILAND
Thailand to appoint selection panel to identify successor to central bank governor
(10 February 2025) Thailand will appoint a selection panel in March to identify a successor to central bank governor Sethaput Suthiwartnarueput, whose term ends in September. The panel must submit a shortlist to the finance minister at least 90 days before Sethaput’s departure. Probable candidates include BOT Deputy Governor Roong Mallikamas and former IMF economist Sutapa Amornvivat. The Finance Ministry has nominated former permanent secretary Somchai Sujjapongse as BOT chairman, a role that does not influence monetary policy but can contribute to economic discussions. Investors are monitoring whether the new governor will align with government calls for rate cuts and a weaker currency. The selection process follows the government’s unsuccessful attempt to appoint a former minister as BOT chair. The BOT last adjusted its policy rate in October 2023, cutting it to 2.25%, and will review the rate on 26 February.

VIET NAM, CHINA
Viet Nam seeks Chinese loans to partially fund USD 8.3 billion railway project 
(13 February 2025) Viet Nam plans to secure Chinese government loans to partially fund a USD 8.3 billion railway project linking Lao Cai, Hanoi, and Haiphong, Viet Nam’s Transport Minister Nguyen told parliament. The 391km railway will have a 1,435mm gauge and support train speeds of up to 160kph for both passenger and cargo transport. Construction is set to begin in 2024 and be completed by 2030. Parliament will vote on the project next week. In November 2023, lawmakers approved a separate USD 67 billion, 1,541km high-speed rail project connecting Hanoi and Ho Chi Minh City, with operations targeted for 2035.

THE PHILIPPINES
Central bank pauses on easing cycle amidst global economic uncertainties
(13 February 2025) The Bangko Sentral ng Pilipinas (BSP) held its benchmark interest rate at 5.75% on Thursday, pausing its easing cycle due to global economic uncertainties. The BSP’s Governor stated that the central bank remains in an easing stance and confirmed a planned 50 basis points rate cut in 2025, with a reduction possible at the April 3 meeting. The BSP will also lower banks’ reserve requirement ratio by 200 basis points to 5% in the first half of the year, potentially before mid-year. Inflation remained at 2.9% in January, within BSP’s 2%-4% target, with risks to the outlook now “broadly balanced.” The decision to hold rates surprised markets, as only one of 29 economists surveyed anticipated the move. Following the announcement, the peso strengthened by 0.2% against the dollar, and the main stock index rose 1.1%. The BSP’s Governor cited increased uncertainty in global policy as a key challenge, stating that BSP is recalibrating its economic models to address these risks.

RCEP Monitor

SOUTH KOREA, JAPAN
South Korea and Japan to respond to Trump’s 25% tariffs on steel imports
(12 February 2025) The U.S. will impose 25% tariffs on steel imports from 12 March, prompting responses from Japan and South Korea, key exporters. Japanese Prime Minister Shigeru Ishiba stated his government will assess the impact and seek exemption, with Japan’s Chief Cabinet Secretary confirming a formal request has been made. Japan’s Nippon Export and Investment Insurance will cover losses from U.S. order cancellations due to tariff costs. Japan’s Economy Minister warned of significant risks to the WTO-based trade system. In South Korea, acting President Choi Sang-mok convened a trade meeting to discuss countermeasures, with policymakers concerned about economic effects. South Korea was the fourth-largest steel exporter to the U.S. in 2023, shipping 2.8 million net tons. The Korea Development Institute forecasted 1.6% GDP growth in 2025, down from 2.0% in 2024, citing worsening trade conditions under Trump. POSCO Holdings, the country’s largest steelmaker, is consulting with the government on its response. Tariffs could expand to automobiles and semiconductors, raising further concerns. Trump indicated that security allies may negotiate exemptions.

CHINA
DeepSeek breakthrough spurs bull market in Chinese tech stocks 
(12 February 2025) The Hang Seng Tech Index has surged 25% since January 13, 2025, entering a bull market, driven by investor enthusiasm following DeepSeek’s AI model breakthrough. This performance surpasses the Nasdaq 100’s 4.4% gain and contrasts with a 0.5% decline in major U.S. tech stocks during the same period. DeepSeek’s AI model, developed with significantly less computing power than its U.S. counterparts, has prompted a global reassessment of Chinese tech companies. Notably, Alibaba’s shares rose over 6% after reports of collaboration with Apple to implement AI features in China. Other companies benefiting from this trend include Xiaomi, Baidu, and BYD, with share increases of 34%, 13%, and 40% respectively. Additionally, e-commerce platforms JD.com and Meituan have seen gains of 24% and 11%, respectively, supported by strong consumption data from the Lunar New Year holiday and expectations of significant fiscal stimulus from Beijing. The broader Hang Seng Index has also risen by 15% in the same timeframe. Data from the Stock Connect programme indicates increased activity among mainland Chinese investors, with average daily turnover in February up two-thirds from January and three times higher than February 2024. Analysts attribute this surge to advancements in large language models by Chinese internet companies and anticipate rapid adoption of AI technologies in consumer-facing applications.

NEW ZEALAND
New Zealand to ease golden visa requirements to attract wealthy investors
(10 February 2025) New Zealand is easing investment visa requirements (also known as ‘golden visas’) to attract wealthy investors, reducing residency obligations and removing the English-language requirement. Investors must commit at least NZD 5 million (USD 2.8 million) to local businesses and spend 21 days in the country over three years, down from 117 days over four years. A second option allows for NZD 10 million investment over five years with a 105-day residency requirement. Prime Minister Christopher Luxon framed the changes as part of a broader economic strategy, citing the need to encourage investment. New Zealand’s Immigration Minister noted that previous residency rules deterred investors. The Ardern government’s 2022 “Active Investor Visa” policy directed funds into businesses rather than stocks and bonds but attracted only 20 applicants, compared to previous schemes that saw 200 applicants and NZD 2.2 billion invested in two years. New Zealand’s Finance Minister stated that the Ardern-era scheme resulted in just NZD 70 million in investments since 2022. The policy shift follows Luxon’s rollback of other Labour policies, including a smoking ban and restrictions on oil and gas exploration. New Zealand’s GDP shrank 1% in Q3 2023, reinforcing the government’s focus on economic recovery.