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.

ASEAN
China introduces multiple-entry “ASEAN visa” for ASEAN citizens
(04 June 2025) China has introduced a new multiple-entry “ASEAN visa” for business travellers from the 10 ASEAN member states and observer Timor-Leste, effective 03 June, according to China’s foreign ministry. The visa permits multiple entries over five years, with each stay lasting up to 180 days, and is also available to accompanying spouses and children. This new scheme supplements existing bilateral visa-free arrangements China holds with Singapore, Thailand, and Malaysia. The policy builds on the “Lancang-Mekong visa” launched in November 2024, which offers similar terms to business travellers from Cambodia, Laos, Myanmar, Thailand, and Viet Nam. Separately, from 01 June, China implemented a trial policy granting unilateral visa-free entry to citizens of Brazil, Argentina, Chile, Peru, and Uruguay, and has also extended visa-free access to all Gulf Cooperation Council countries. China received over 9 million foreign visitors in Q1 2025, up over 40% year-on-year. Chinese officials stated that these measures demonstrate China’s commitment to expanding high-level openness and improving policies to facilitate cross-border exchanges.

LAO PDR, THAILAND
Lao PDR eases restrictions on importing of animal products from Thailand
(04 June 2025) Lao PDR has eased restrictions on importing and transporting livestock and livestock products from Thailand following the containment of an anthrax outbreak in Don Tan District, Mukdahan Province. A letter from Lao PDR’s Ministry of Agriculture and Forestry dated 30 May confirmed the decision, allowing imports of cattle, buffalo, horses, pigs, sheep, and goats, particularly in border provinces. Laotian officials stated that imports must originate from disease-free areas and animals must be vaccinated against anthrax at least 20 days prior. Imports from or transiting through Mukdahan Province remain restricted for an additional 30 days, with a mandatory 21-day quarantine. Livestock transported through Lao PDR to third countries must not undergo vehicle changes or stops within Lao PDR. The decision signals increased confidence in Thailand’s disease control measures and supports ongoing efforts to maintain biosecurity standards in regional livestock trade.

MALAYSIA
Petronas to cut over 5,000 jobs, representing 10% of workforce
(05 June 2025) Petronas will cut over 5,000 jobs, representing approximately 10% of its workforce, as part of a company-wide restructuring to manage cost pressures from declining crude oil prices. The layoffs will be phased through 2025, and a hiring freeze will be in place until December 2026. Taufik cited narrowing margins and diminishing oil field yields as challenges to meeting dividend targets. The company’s financial outlook is under strain, with Brent oil prices at around USD 65 per barrel—below Petronas’ budget assumptions of USD 75–80. Petronas’ net income fell 32% in 2024, following a 21% decline in 2023. The decline in profitability and output also impacts Malaysia’s fiscal position, as Petronas contributed 10% of government revenue in 2024 through dividends and taxes used to fund national infrastructure, education, and social programmes.

THAILAND
Thailand records 14% year-on-year drop in foreign arrivals in May 2025
(05 June 2025) Thailand recorded a 14% year-on-year drop in foreign arrivals in May 2025 to 2.6 million, marking the fourth consecutive monthly decline and the longest downturn since 2021. The decrease is driven primarily by falling regional tourism, with Asian arrivals down nearly 11% year-to-date and Chinese tourist numbers falling 33%, amounting to nearly one million fewer visits compared to 2024. Contributing factors include safety concerns linked to scam operations near the Myanmar border, viral news of Chinese actor Wang Xing’s January kidnapping, and negative perceptions reinforced by recent earthquakes and global travel advisories. Arrivals from Malaysia, the second-largest source market, fell 17%, and flight bookings from China for June to August are down 15% year-on-year. Hotel occupancy dropped to 52% in May from 63% in April, with further declines expected as hotels reduce rates. Despite a 12% rise in U.S. tourist arrivals to over 625,000 and an 18% increase from Europe to over three million through May, officials are concerned about missing the 2025 target of 39 million visitors and USD 68 billion in spending. The Tourism Council and Thai Hotels Association have urged the government to step up safety assurances and diversify promotional efforts beyond China.

INDONESIA
Indonesia launches IDR 24.44 trillion stimulus package to support consumer spending
(05 June 2025) Indonesia has launched a IDR 24.44 trillion (USD 1.5 billion) stimulus package to support consumer spending amid slowing economic growth, which fell to 4.9% in Q1 2025—the weakest in over three years. The package, announced by the Finance Minister, includes two months of wage subsidies, transportation and toll discounts, and expanded social aid aimed at sustaining near-5% GDP growth during the school holidays. The stimulus follows declining indicators such as weakened purchasing power, retail, and auto sales, and coincides with falling commodity prices and trade tensions. Indonesia, which faces a paused 32% US tariff, is negotiating tariff reductions with Washington and has pledged to purchase more American goods. Growth targets are further pressured by reduced infrastructure spending as President Prabowo Subianto redirects funds to his USD 28 billion annual free meals programme, which aims to reach over 82 million children and pregnant women daily. Bank Indonesia has cut interest rates by 50 basis points in 2025, bringing the policy rate to 5.5%, with further reductions expected. The central bank’s GDP forecast stands at 4.6–5.4%, while Bank of America estimates growth will slow to 4.7–4.8% in Q2 and Q3. Economists expect the fiscal stimulus to have only moderate effects on overall demand, citing weak consumer sentiment and job market concerns, and argue that more aggressive policy support may be necessary.

VIET NAM
US places pressure on Viet Nam to reduce dependence on Chinese materials
(03 June 2025) At the end of May, the US delivered a detailed annex of tariff negotiation demands to Viet Nam, requesting that Viet Nam-based manufacturers reduce dependence on Chinese materials and enhance production and supply chain transparency, according to individuals familiar with the talks. The request follows a second round of negotiations aimed at averting proposed 46% reciprocal tariffs on Vietnamese imports. The demands, described as “tough” and “difficult,” are part of a broader US push to realign global supply chains away from China. Viet Nam’s economy, heavily reliant on China for intermediate goods, could face structural challenges if these changes are implemented. While Hanoi has addressed concerns over Chinese transshipments and has committed to buying US goods, including planes, farm products, and energy via non-binding agreements, US officials are pressing for legally binding contracts. In 2024, Viet Nam’s exports to the US and imports from China each reached approximately USD 140 billion, highlighting the intertwined trade flows. Despite crackdowns on transshipment, both trade figures hit record highs in April. It remains unclear how Vietnam will respond by the Wednesday deadline reportedly set by Washington, or whether it will present a counterproposal.

THE PHILIPPINES
The Philippines’ unemployment rate increases to 4.1% in April 2025
(06 June 2025) The Philippines’ unemployment rate increased to 4.1% in April 2025 from 3.9% in March, with the number of unemployed individuals rising slightly to 2.06 million from 2.04 million year-on-year, according to the Philippine Statistics Authority. Despite this increase, the Undersecretary of the Department of Economy, Planning, and Development stated that the labour market remains resilient and within the government’s target unemployment range of 4.4% to 4.7% under the Philippine Development Plan 2023–2028. Separately, the country’s gross international reserves rose marginally to USD 105.5 billion at the end of May from USD 105.3 billion in April, according to preliminary data from the central bank. These reserves are equivalent to 7.3 months of import coverage, which the central bank described as robust.

RCEP Monitor

SOUTH KOREA
Newly-elected president Lee Jae-myung reaffirm US alliance while criticizing protectionism
(04 June 2025) Following Lee Jae-myung’s presidential election victory in South Korea, the U.S. State Department reaffirmed its “ironclad commitment” to the alliance and trilateral cooperation with Japan. In his inauguration speech, Lee underscored the importance of the alliance while referencing rising protectionism and shifts in the international order. The current 90-day pause on Donald Trump’s “Liberation Day” tariffs ends 08 July, with the U.S. requesting trade proposals by 05 June. South Korea’s exports to the U.S. fell 8.1% year-on-year in May, driven by declining automobile shipments, while a new 25% U.S. tariff on all foreign-made vehicles is raising concern in Korea’s auto sector, which accounts for over 10% of exports. South Korea’s policymaking capacity was limited under interim leadership until Lee’s election, and the former Finance Minister had stated in April that a policy package for U.S. trade talks was targeted for July. Lee has not outlined specific trade strategies but campaigned on pragmatic diplomacy and the pursuit of new export markets. He has maintained a non-confrontational stance towards the U.S., despite his progressive background, which traditionally opposes a strong U.S. military presence. In defence policy, Lee supports alliance continuity while signalling openness to North Korea dialogue.

JAPAN
Ministry of Finance expected to adjust debt issuance strategy due to historically high yields
(06 June 2025) Market expectations are rising that Japan’s Ministry of Finance (MOF) will adjust its debt issuance strategy by July, shifting towards increased sales of short-term securities and reducing issuance of super-long bonds to contain yields now at historic highs. This follows a weak 30-year bond auction on Thursday, which recorded the lowest demand ratio since 2023, despite a subsequent decline in yields. The 30-year yield dropped to 2.88% from a May peak of 3.185%, while the 40-year and 20-year yields declined to 3.055% and 2.335%, respectively. Investor sentiment was buoyed by speculation that the MOF may cut issuance, particularly after the ministry circulated a market questionnaire and scheduled a 20 June meeting with primary dealers. Resona Asset Management and JPMorgan Securities Japan forecast super-long bond issuance reductions of JPY 250 billion to JPY 450 billion per month, with a cut below JPY 300 billion likely to disappoint investors. HSBC suggested the Bank of Japan may reduce purchases of bonds with maturities of 10 years and below while maintaining or increasing support for the super-long end. The upcoming MOF decision coincides with the BOJ’s 16–17 June policy meeting and ongoing global concerns about rising borrowing costs and fiscal deficits.

JAPAN
Tax-free sales at Japanese department stores decline 26.7% year-on-year in April 2025
(04 June 2025) Tax-free sales at Japanese department stores declined 26.7% year-on-year in April to JPY 43.9 billion, with the trend continuing into May, according to the Japan Department Stores Association and three major retailers, despite a 28.5% increase in visitor numbers to a record 3.9 million and a 3.1% rise in tax-free shoppers to 521,000. The average tax-free spend per customer dropped 28.9% to JPY 84,000, driven by reduced demand for luxury goods such as handbags and watches, impacted by last year’s price hikes, a stronger yen, and geopolitical uncertainty. Isetan Mitsukoshi, Daimaru Matsuzakaya, and Takashimaya are forecasting annual declines in foreign visitor sales of 2%, 3%, and 5%, respectively. Sales of luxury goods fell 32.4% in April, while tax-free sales of consumables such as cosmetics and food rose 15.6%. Takashimaya reported double-digit growth in categories including sporting goods and clothing, while Daimaru Matsuzakaya cited strong sales at its Umeda store due to demand for Japan-specific branded content. Although current tax-free sales exceed 2019 pre-pandemic levels, department stores are adjusting forecasts and strategies.