VIET NAM, SOUTH KOREA
Viet Nam and South Korea commit to expand bilateral trade to USD 150 billion
(13 August 2025) Vietnamese President To Lam’s four-day state visit to South Korea marked the start of President Lee Jae-myung’s ASEAN policy, with both leaders committing to expand bilateral trade to USD 150 billion by 2030 from USD 86.8 billion. Lam led a high-level delegation including ministers of trade, industry, technology and foreign affairs. Ten memorandums of understanding were signed, covering nuclear and renewable energy, financial policy, and scientific innovation. Lee highlighted the contribution of approximately 10,000 Korean firms operating in Viet Nam and prioritised joint development in semiconductors. Lam requested expanded cooperation in training Vietnamese talent in AI, biotech and shipbuilding. Both sides pledged to strengthen defence-industrial collaboration, including a potential USD 300 million deal for K9 howitzers, though a technology transfer agreement for local production remains pending. Defence ministers agreed to revise existing cooperation frameworks. Analysts noted the strategic backdrop of US tariffs—15% on South Korean and 20% on Vietnamese goods—and the broader US-China rivalry, driving Seoul and Hanoi to seek economic and military diversification. The summit outlined plans for cooperation in maritime security, demining, UN peacekeeping, and strategic information exchange. South Korean firms are expected to increase investments in high-tech sectors, digital infrastructure, and smart cities in Vietnam.

VIET NAM
Viet Nam undergoing one of the fastest demographic ageing transitions globally
(13 August 2025) Vietnam is undergoing one of the fastest demographic ageing transitions globally, with the proportion of citizens aged 60 and above increasing from 8.7% in 2009 to 14.2–16% by early 2024. Projections show Vietnam will enter the ‘aged population’ phase between 2036 and 2038 and become a super-aged society by 2050—achieving in 17–20 years what took France 115 years. The country currently has around 16.1 million elderly, expected to rise to 18 million or 20% of the population by 2045. This demographic shift stems from a postwar baby boom followed by a sharp decline in birth rates, leading to low replacement fertility. Key risks identified include increased numbers of elderly without family support, rising caregiving burdens (especially on women), labour shortages, and escalating healthcare and social welfare pressures. Most elderly care is informal, with fewer than 1% accessing public nursing homes, and Vietnam faces a severe shortage of trained caregivers. The WHO recommends 5,000 care workers per 100,000 people aged 65 and above, a target Vietnam is far from meeting. Non-communicable and age-related diseases, such as cardiovascular conditions, cancer, dementia, and depression, are prevalent and strain healthcare resources.

THAILAND
Bank of Thailand reduces policy rate by 25 basis points to 1.50%
(13 August 2025) The Bank of Thailand’s Monetary Policy Committee unanimously reduced the policy rate by 25 basis points to 1.50%, effective immediately, marking the lowest level in two years. The MPC Secretary stated that while economic growth projections for 2025 and 2026 remain broadly unchanged, the current policy shift is driven by the need to address increasing structural challenges and weakened competitiveness resulting from recent US trade measures. Headline inflation remains subdued, and small and medium-sized enterprises are identified as particularly vulnerable. The MPC concluded that more accommodative monetary policy is necessary to maintain supportive financial conditions and ease the burden on affected sectors.

SINGAPORE
Number of million-dollar flat sales hit record in Q2 2025, reflecting 75.8% year-on-year increase
(13 August 2025) A record 415 public housing units in Singapore were resold for SGD 1 million or more in Q2 2025, reflecting a 75.8% year-on-year increase, according to OrangeTee Group. Combined with 348 such transactions in Q1, high-value sales in H1 2025 now represent nearly 75% of the total for 2024, positioning the market to surpass last year’s full-year record of 1,035 million-dollar units. The highest-priced resale in the quarter was a 122 sqm unit sold for SGD 1,658,888. Overall resale prices rose 0.9% quarter-on-quarter, marking the 21st consecutive quarterly increase but the smallest since Q2 2020. OrangeTee forecasts a full-year public housing resale price increase of 4% to 5.5%, citing stable economic fundamentals and declining interest rates. The government had previously implemented borrowing restrictions to moderate housing demand. On 12 August, following stronger-than-expected H1 performance, Singapore raised its 2025 GDP growth forecast to 1.5%–2.5%, up from 0.0%–2.0%, reversing a prior downgrade prompted by US tariffs.

MALAYSIA
Proportion of Malaysians holding at least MYR 1 million in wealth to double over next decade
(13 August 2025) HSBC Bank projects that the proportion of Malaysians holding at least USD 250,000 (MYR 1.18 million) in financial wealth will double over the next decade, driven by the country’s expanding economy. This projection was disclosed by HSBC’s head of international wealth and premier banking Asia, during the launch of the bank’s updated HSBC Premier offering targeting affluent and high-net-worth clients. The country head of international wealth and premier banking at HSBC Malaysia noted a growing demand among affluent Malaysians for investment solutions that support both wealth accumulation and lifestyle protection. Separately, a 2023 Knight Frank report indicated that the number of Malaysians with wealth exceeding USD 1 million (MYR 4.6 million) is expected to increase from over 85,000 in 2022 to more than 164,000 by 2027.

MALAYSIA
Foreign outflows from Malaysia’s bond market to ease due to Fed rate cut bets
(12 August 2025) Convera Singapore anticipates a potential easing of foreign outflows from Malaysia’s domestic bond market, following renewed expectations of US Federal Reserve rate cuts. In July, global funds withdrew USD 1.2 billion from Malaysian sovereign debt, the highest outflow since October, amid a strengthening US dollar. However, weaker-than-expected US nonfarm payroll data has led swap markets to price in at least two rate cuts in 2025, improving sentiment toward emerging-market assets. Malaysian bonds may benefit from this shift, supported by moderating domestic inflation, with June’s price increase marking the slowest since February 2021. Convera’s FX and macro strategist noted that outflow pressures may have peaked, while the bond market outlook for the remainder of the year will depend on emerging market risk appetite, US monetary policy trajectory, and domestic policy clarity.

SINGAPORE
Limited exposure to US economy shields Singapore from economic turbulence
(14 August 2025) Singapore Prime Minister Lawrence Wong warned of significant global challenges during the country’s 60th independence anniversary, citing an “unravelling” of the international order that had supported its growth. Despite this, investor sentiment remains positive, with the iShares MSCI Singapore ETF rising nearly 30% year-to-date and the Singapore dollar appreciating 7% against the US dollar. Financial institutions dominate the local stock market, with DBS, OCBC, Keppel, and Sea Ltd comprising key holdings, bolstered by defensive characteristics and strong dividend yields. Trade concerns appear muted as the US accounted for only 10% of Singapore’s merchandise trade in 2024, with Asia remaining its primary trading partner. Strategic investments, including a SGD 1 billion AI initiative launched in 2019, have positioned Singapore for growth in sectors such as data centres and pharmaceuticals. Singapore Telecommunications has benefited, with its stock rising 33% this year. Bain & Co. notes Singapore’s increasing prominence in global pharma due to innovation and IP protection, while HSBC highlights its recent rise as Asia’s top destination for medical tourism. Domestically, challenges persist, including income inequality and housing shortages, despite a high per capita GDP of USD 93,000 and limited progress on social welfare. Nonetheless, investors view Singapore as well-placed to lead regionally in a multipolar world.

RCEP Monitor

SOUTH KOREA
Government to announce restructuring plan for petrochemical sector
(14 August 2025) South Korea’s government will unveil a restructuring plan for the petrochemical sector in August 2025, responding to what the country’s Industry Minister described as a “grave” situation driven by global oversupply and sustained weak demand. The sector is currently operating at only 80% of total capacity, reflecting a 20% excess, with margins sharply compressed due to capacity expansion, particularly in China. Drawing on the precedent of the late-2010s shipbuilding sector overhaul, the Industry Minister urged petrochemical firms to voluntarily adjust facilities. Yeochun NCC Co (YNCC), facing KRW 180 billion (USD 130 million) in loans maturing at end-August, has received a KRW 150 billion (USD 108.38 million) loan from DL Chemical, a subsidiary of DL Holdings and major YNCC shareholder. Analysts see YNCC’s difficulties as a potential catalyst for broader industry consolidation. President Lee Jae Myung, elected in June, has pledged tax incentives for mergers and acquisitions and temporary antitrust exemptions to facilitate restructuring. South Korea’s petrochemical exports fell 11.1% year-on-year in H1 2025 to USD 21.7 billion; total exports in 2024 were USD 48 billion, making petrochemicals the country’s fifth-largest export category.

SOUTH KOREA
Potential 10-day public holiday in October drives 28.7% year-on-year surge in overseas travel bookings
(13 August 2025) A potential 10-day public holiday in South Korea this October, contingent on the government designating 10 October as a temporary holiday, has driven a 28.7% year-on-year surge in overseas travel bookings for the 3–9 October period, according to Kyowon Your Travel Easy. Airlines including Jeju Air, Jin Air, T’way Air, Eastar Jet, and Air Busan are adding capacity, with Jeju Air alone scheduling 234 additional international flights. Airfares have risen significantly, with Seoul–Da Nang tickets now priced between KRW 600,000 and KRW 1.2 million, and Seoul–New York flights at around KRW 3 million. Domestic hotel bookings in Jeju and other key locations have exceeded 90% occupancy. Incheon International Airport Corp forecasts international passenger traffic during this period may surpass the previous record of 2.14 million set in January 2025. However, Statistics Korea reported a 34% week-on-week fall in domestic credit card spending during the six-day Seollal holiday in January, despite a 7.3% rise in outbound travellers to 2.97 million. The National Assembly Research Service found limited impact of previous temporary holidays on domestic demand, with concerns over reduced production and exports. Equity issues are also noted, as businesses with fewer than five employees—covering 35% of the workforce—are not mandated to observe temporary holidays. Schools may also face midterm exam scheduling conflicts. The government has yet to announce an official position on the proposed holiday.

JAPAN
Nikkei 225 index hits all time high following stronger-than-expected US inflation data
(13 August 2025) Japan’s Nikkei 225 index surpassed 43,421 points on Wednesday, marking a second consecutive all-time high following stronger-than-expected US inflation data and reduced US–China trade tensions. The increase followed Tuesday’s record breach of the 42,999-point level. US inflation rose by 2.7% year-on-year in July, below market expectations, leading to increased expectations of a rate cut by the Federal Reserve at its September meeting. The CME Group’s FedWatch tool placed the probability of a September rate cut at 96.4%, up from 85.9% a day earlier. The S&P 500 and Nasdaq Composite rose 1.13% and 1.39% respectively on Tuesday, reaching new highs. Investor sentiment was also supported by US President Trump’s announcement of a 90-day extension of the tariff pause on Chinese imports. Other Asian markets also saw significant gains on Wednesday, with the Hang Seng Index up approximately 2.5% and South Korea’s KOSPI gaining 1%. Trump renewed pressure on Fed Chair Jerome Powell to cut rates, criticising the central bank’s reluctance to act sooner, citing negative economic impact. A rate cut would reduce borrowing costs and potentially stimulate the US economy, which remains a key driver of global growth.