ASEAN
Southeast Asia pursuing nuclear power to meet future energy needs 
(03 February 2025) Southeast Asian countries are pursuing nuclear energy to meet rising electricity demand, reduce reliance on fossil fuels, and address air pollution. Indonesia plans 20 nuclear plants, while Viet Nam revived its nuclear ambitions by signing a cooperation deal with Russia on 14 January 2024, after suspending a project in 2016 due to escalating costs reaching USD 18 billion. A Korean company is assessing the potential revival of the dormant Bataan nuclear power plant in the Philippines. Singapore signed a nuclear cooperation agreement with the U.S. in 2023. Nuclear financing remains limited, with the World Bank not funding projects, but 14 major financial institutions endorsed a target to triple global nuclear capacity by 2050. The International Energy Agency expects a record high for nuclear-generated electricity in 2025 and urges an acceleration of new plant construction to meet emission targets. Small modular reactors are being promoted as a cheaper and safer alternative, but their commercial viability remains uncertain. Critics cite safety concerns, uranium supply risks, and challenges in waste disposal. Viet Nam faces a skills gap, estimating a need for 2,400 trained personnel to restart its nuclear program.

ASEAN
ASEAN plans special summit with the US to discuss tariff concerns
(20 February 2025) ASEAN plans to hold a special summit with the United States to address proposed U.S. tariffs of 25% on automotive, semiconductor, and pharmaceutical imports, Malaysia’s Foreign Minister Mohamad Hasan announced. He stated that the tariffs would significantly impact Malaysia, where electrical and electronics products account for 60% of trade with the U.S. Malaysia, set to chair ASEAN in 2025, will work with member states to present a unified stance to mitigate potential economic burdens. The U.S. goods trade with Malaysia reached USD 80.2 billion in 2024, with a trade deficit of USD 24.8 billion, according to the Office of the United States Trade Representative.

MALAYSIA
Over USD 31 billion in data center investments in first ten months of 2024
(19 February 2024) Malaysia’s data center market, concentrated in Johor state, has grown from near zero in 2019 to 1.6 gigawatts, with projections exceeding 5 gigawatts by 2035. The country attracted over USD 31 billion in data center investments in the first 10 months of 2024, tripling 2023 levels. Foreign firms, including Equinix, Microsoft, and China’s GDS Holdings, dominate the sector, with Johor hosting 22 mostly foreign-owned centers spanning over 21 hectares. The government expects data centers to modernise Malaysia’s economy but acknowledges their substantial energy demand. Malaysia’s renewable energy capacity in 2023 was less than the projected data center consumption in 2035, and 95% of the country’s energy came from fossil fuels in 2022, according to the International Energy Agency. Prime Minister Anwar Ibrahim stated in September 2023 that Malaysia had a surplus of energy to sustain large projects. Concerns include water shortages and power reliability, as data centers require significant cooling and electricity, especially in Malaysia’s tropical climate. Malaysia is now the eighth-largest data center market globally and is on track to enter the top 10 within five to seven years.

INDONESIA
China-linked nickel smelter significantly cuts production amidst financial distress
(20 February 2025) PT Gunbuster Nickel Industry, an Indonesian nickel smelter linked to bankrupt Chinese firm Jiangsu Delong Nickel Industry Co., has significantly cut production and is nearing a full shutdown due to financial distress. The company is delaying payments to local energy suppliers and struggling to secure nickel ore amid tight supply conditions caused by government-imposed mining quotas. Gunbuster, with an annual production capacity of 1.8 million tons of nickel pig iron, has shut down most of its 20 production lines since early 2025. A Chinese court-appointed working group of officials and lawyers from Xiangshui County, Jiangsu province, has taken control of the firm as part of Delong’s restructuring. Delong was one of the first major investors in Indonesia’s nickel smelting sector but faced increasing competition from Tsingshan Holding Group and the impact of China’s economic slowdown. The company had initially planned a USD 3 billion investment in the plant, which was inaugurated in 2021 in the presence of then-Indonesian President Joko Widodo. Global nickel prices have dropped nearly 50% since late 2022, putting pressure even on Indonesian producers with lower energy and labour costs.

INDONESIA
Indonesia to issue government bonds to finance low-income housing
(21 February 2025) Indonesia will issue government bonds to finance low-income housing projects, with Bank Indonesia committing to purchase the bonds in the secondary market. The funds will support the expansion of the government’s homeownership loan facility, part of a programme to build 3 million affordable houses annually. The issuance size was not disclosed. This aligns with Bank Indonesia’s broader support for President Prabowo Subianto’s priority initiatives. Previously, the central bank reduced reserve requirement ratios for banks providing mortgage loans, increasing liquidity incentives for the housing sector by up to IDR 80 trillion (USD 4.9 billion).

SINGAPORE
Prime Minister announces cash handouts in pre-election budget
(18 February 2025) Prime Minister Lawrence Wong announced a budget package including SGD 800 (USD 596) vouchers for all households, additional utility subsidies for social housing residents, and credits for children and young adults. Singaporeans over 21 will receive SGD 600, while those over 60 will get SGD 800, marking the country’s 60th anniversary. Hawker centre food vendors will receive SGD 600 in rent support. Wong projected GDP growth of 1–3% in 2025, down from 4.4% in 2024, and inflation of 1.5%–2.5%. The Monetary Authority of Singapore recently eased monetary policy for the first time in four years. Wong accepted MAS recommendations to introduce tax incentives to attract stock market listings and fund manager investments, but analysts questioned their impact without pension fund participation. The government will increase its evaluation of nuclear power for key industries. The election must be held by November, with cost-of-living concerns expected to be central.

VIET NAM
National Assembly approves government restructuring plan reducing government workforce
(18 February 2025) Viet Nam’s National Assembly approved a restructuring plan reducing the government workforce by approximately 20%, affecting an estimated 100,000 civil servants. The plan, passed at an extraordinary session in Hanoi, abolishes five ministries, merges others, and consolidates state-run media by shutting down multiple TV channels, newspapers, and magazines. Nguyen Chi Dung, former planning and investment minister, will become deputy prime minister as his ministry merges with finance, alongside Mai Van Chinh, former head of the Party Central Committee’s Commission for Mass Mobilization, which is merging with the propaganda department. Communist Party chief To Lam is driving the reforms ahead of the 2026 National Party Congress, where he is positioning for a full term as general secretary. The government is offering compensation to displaced workers amid concerns about their transition to the private sector. Prime Minister Pham Minh Chinh targets 8% GDP growth for 2025, aiming for double-digit expansion in subsequent years.

RCEP Monitor

AUSTRALIA
RBA claims keeping rates unchanged would see core inflation undershoot this year
(20 February 2025) Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser stated that keeping interest rates unchanged this year would have caused core inflation to fall below the 2.5% midpoint of the bank’s target. The RBA’s latest forecasts, released alongside Tuesday’s policy decision, project trimmed mean inflation to decline to 2.7% from mid-2025 and remain at that level until mid-2027, assuming three rate cuts this year. The RBA cut the cash rate by 25 basis points to 4.1%, but Hauser emphasised that inflation at 3.2% remains above target, and the board remains focused on price stability. His comments, interpreted as hawkish by financial markets, pushed Australian 10-year government bond yields above US peers for the first time since 10 December. Traders now expect a second rate cut in August but have reduced the probability of a third cut to 70%. Hauser stated that all data leading up to the April 1 policy decision would be considered but cautioned against overemphasising monthly CPI data unless it significantly deviates from projections. He noted that Australia’s employment growth remains strong, with January’s job gains exceeding estimates, reinforcing confidence in the labour market.

SOUTH KOREA
South Korea planning tariffs on low-cost Chinese steel imports
(20 February 2025) South Korea plans to impose provisional tariffs of up to 38.02% on Chinese hot-rolled steel plates, citing market disruption from low-cost imports, according to the trade ministry. Specific tariffs include nearly 28% on Baoshan Iron & Steel Co. and around 38% on Hunan Valin Xiangtang Iron and Steel Co. The investigation began in October following a request from Hyundai Steel Co. in July, with final approval pending from the finance ministry. Hyundai Steel’s shares surged up to 10% in Seoul, while Posco Holdings also saw gains. The move follows China’s nine-year high in steel exports and recent US tariffs of 25% on steel and aluminium imports. Hyundai Steel and Posco Holdings cited cheap Chinese imports as key factors affecting their operations, with Posco closing its No. 1 wire rod plant in Pohang.

NEW ZEALAND
RBNZ cuts benchmark interest rate by 50 basis points to 3.75% 
(19 February 2025) The Reserve Bank of New Zealand (RBNZ) cut its benchmark interest rate by 50 basis points to 3.75%, signalling further cuts due to moderating inflation and a struggling economy. The RBNZ’s Governor indicated that the central bank anticipates two additional 25-basis point rate reductions in April and May, with the official cash rate potentially reaching 3% by the end of the year. The RBNZ’s updated forecast suggests rates will be 3.45% by June and 3.10% by Q4, down from prior projections. Since August, the bank has reduced rates by 175 basis points to stimulate a recession-hit economy. Inflation is expected to settle within the RBNZ’s target range, but global uncertainties, especially concerning U.S. President Donald Trump’s tariff policies, pose ongoing risks. The RBNZ aims to support demand despite the global economic instability, and its rate reductions contrast with more cautious approaches by the U.S. Federal Reserve and Australia. Inflation in New Zealand currently stands at 2.2%, with an expected rise to 2.7% in Q3 before easing again.