THAILAND, INDONESIA
Changing political fortunes in Thailand and Indonesia affect investor sentiments
(14 September 2025) Foreign investors have withdrawn USD 653 million from Indonesia’s stock market in September, the steepest outflow since April, amid violent protests and President Prabowo Subianto’s abrupt replacement of finance minister Sri Mulyani Indrawati with Purbaya Yudhi Sadewa, unsettling markets given Indrawati’s credibility with global investors. Indonesia plans to inject IDR 200 trillion (USD 12 billion) from its IDR 400 trillion reserves into state banks to support lending, with finance minister Purbaya pledging more if needed, alongside a central bank burden-sharing scheme. Concerns, however, persist over fiscal direction, populist spending measures, and economic weakness. Bond yields show the steepest curve in over two years, while the rupiah has lost over 1.5% this year against the dollar, ranking as Asia’s second-weakest currency. In contrast, Thailand’s SET Index has risen over 4% this month to a seven-month high, buoyed by political stabilisation under new prime minister Anutin Charnvirakul, while foreign equity outflows slowed to USD 21 million in September after USD 670 million in August. The baht has strengthened about 2% against the dollar, the best performance among Asian currencies, with projections that the SET Index could reach 1,340 by year-end.

INDONESIA
Bank Indonesia unexpectedly cuts rate by 25 basis points to 4.75%
(18 September 2025) Bank Indonesia unexpectedly cut its benchmark seven-day reverse repurchase rate by 25 basis points to 4.75% on 17 September, marking its sixth reduction since September 2024 and bringing borrowing costs to their lowest since late 2022, against expectations from all 31 economists surveyed by Reuters of no change. Governor Perry Warjiyo signalled scope for further easing, citing below-capacity growth and weak credit demand, while urging commercial banks to lower lending rates, which have only fallen 7 basis points this year despite BI’s 150 basis points of cuts. The rupiah, down 2% against the US dollar in 2025, firmed slightly after the move, and the stock market hit a record high, though investor concerns persist over fiscal discipline, central bank independence, and recent political instability, including protests and the dismissal of finance minister Sri Mulyani Indrawati. Parliament is considering amendments to a Bill that could both reinforce BI’s growth-support mandate and empower lawmakers to recommend the governor’s removal. New Finance Minister Purbaya Yudhi Sadewa has criticised BI for keeping liquidity “dry” and shifted over USD 12 billion of government funds from the central bank to commercial banks to spur lending, alongside a new USD 1 billion stimulus package. Warjiyo countered that liquidity was ample, citing IDR 2,372 trillion in approved but unused loan commitments.

MALAYSIA, SINGAPORE
Johor-Singapore Special Economic Zone (JS-SEZ) to strengthen both countries’ investment environment
(18 September 2025) Singapore’s Minister of State for Trade and Industry said on 18 September that the Johor-Singapore Special Economic Zone (JS-SEZ) is positioned to strengthen both countries’ ability to compete for global investment amid a precarious global economic environment, citing Singapore’s 11.3% decline in non-oil domestic exports in August following front-loaded shipments ahead of US tariffs. He emphasised Singapore’s advantages in political stability, rule of law, and finance, contrasted with Johor’s land and natural resources, as complementary strengths for the zone. Illustrating this, Paris Baguette established its halal manufacturing plant in Johor and its regional headquarters and innovation centre in Singapore, while Agrocorp International partnered with Japan’s Megmilk Snow Brand in 2023 to form Agro Snow, developing a protein extraction facility in Johor using technology created in Singapore with the Singapore Institute of Technology. The minister highlighted that such arrangements allow manufacturing in Johor alongside R&D and IP protection in Singapore. At the same event, KPMG said the JS-SEZ could reshape competitiveness in sectors including advanced manufacturing, data centres, oil and gas, speciality chemicals, food processing, and green solutions, supported by five key building blocks: talent mobility, enhanced infrastructure, aligned regulations, streamlined customs, and transparent governance. He noted that multinational corporations setting up in the zone can integrate SMEs into their supply chains through component manufacturing, precision engineering, logistics, and other support services, creating opportunities for smaller firms to scale and access regional markets.

THAILAND
Active users of ChatGPT in Thailand increases more than fourfold over past year
(16 September 2025) OpenAI reported that weekly active users of ChatGPT in Thailand have increased more than fourfold over the past year, with growth driven mainly by users aged 18–24 applying the tool for translation, how-to guidance, personal development, tutoring, self-care, and personal writing. The data was presented at the first OpenAI Forum in Thailand, “AI LEAP: Turning Today’s Disruption into Tomorrow’s Advantage,” attended by over 100 business leaders in Bangkok and featuring Jason Kwon, OpenAI’s chief strategy officer, on his first visit to the country. Kwon emphasised that optimism and adaptability are Thailand’s competitive edge in global AI adoption, noting applications across education, healthcare, creativity, and entrepreneurship. The KBTG group chairman highlighted AI’s role in inclusion and democratisation of access, stressing its potential to reduce gaps and empower youth. The speakers underlined Thailand’s reputation as a fast adopter of technology, creative strength, and potential to pioneer new AI-driven industries such as personalised filmmaking. The forum also identified strong governance, inclusion, and early adoption as key foundations for developing a sustainable AI ecosystem in Thailand.

SINGAPORE, CHINA
Applications from Chinese clients to open family offices falls by 50% in 2025
(17 September 2025) Applications from Chinese clients to establish family offices in Singapore have reportedly fallen by 50% compared with 2022, according to data cited by CNBC, amid concerns over stricter anti-money-laundering checks, tighter permanent residence rules, and reduced tax incentives, with alternatives such as Hong Kong, Dubai, and Japan seen as easier jurisdictions. Despite this, official figures show the number of single-family offices in Singapore rose above 2,000 in 2024, up more than 40% from 1,400 in 2023 and 1,100 in 2022, though no origin data is available. The decline follows the SGD 3 billion money-laundering scandal in 2023 involving 10 Chinese nationals, which prompted the Monetary Authority of Singapore to expand due diligence requirements and appoint external firms to conduct checks. KGP Legal said Chinese clients were abandoning projects due to frustration with the onboarding process, which in the short term reduces tax revenue and fees for local service providers, though they argued Singapore must strike a balance between compliance and business efficiency. In contrast, Shook Lin & Bok said their firm had seen fewer Chinese inquiries after the scandal but noted returning business with wealthier, longer-term clients attracted by Singapore’s political stability, independent judiciary, and strong financial ecosystem. Rajah & Tann stated that Singapore’s restrictions align with those in Britain, Switzerland, and Hong Kong and are intended to ensure both compliance and efficiency. Some have argued that tighter scrutiny strengthens Singapore’s position by attracting sustainable and higher-quality wealth, even at the expense of losing opportunistic investors.

LAO PDR
Lao PDR moving to channel hydropower surplus into cryptocurrency mining
(17 September 2025) Lao PDR, burdened by mounting debts from decades of dam construction, is moving to channel its surplus hydropower into cryptocurrency mining, with policymakers highlighting “digital asset mining” as a long-term economic opportunity, according to the state-run Vientiane Times. Electricity made up 26% of exports in 2024, but limited transmission infrastructure has constrained sales abroad, while financing from Chinese loans and foreign firms has left the country heavily indebted, the IMF noted. Lao PDR has begun licensing local crypto trading and mining platforms, aiming to tax and regulate an industry that has previously attracted Chinese miners operating illegally since Beijing’s 2021 ban. The shift comes amid high domestic inflation, a kip that has halved in value against the US dollar in five years, and a new 40% US tariff on Laotian exports. Hydropower output remains seasonal, forcing Laos to buy electricity from Thailand in dry months despite its wet-season surplus. Environmental groups, including the Mekong Energy and Ecology Network and International Rivers, argue the policy worsens displacement, harms agriculture and fisheries, and fails to deliver promised prosperity for affected communities. Critics link the move to crypto directly to debt repayment pressures rather than internal demand, while supporters point to the IMF’s assessment that monetising unused power holds economic logic. Lao PDR aims to build a digital economy by 2030 and is set to exit the UN’s “least developed” status next year, but the IMF warned in November that debt and inflation trends under current policies risk intensifying, weighing on medium-term growth.

VIET NAM
Draft decree issued requiring police approval for certain investment projects
(18 September 2025) Viet Nam’s Public Security Ministry has issued a draft decree that would require police approval for investment projects across sectors including energy, telecommunications, construction, ports, oilfields, nuclear power, satellite services, industrial parks, and golf courses, expanding its role from consultant to gatekeeper on national security grounds. The proposal, open for ministerial comment until 22 September before possible approval by the Prime Minister, states that “security must be ensured, without sacrificing national interests, for economic benefits.” The reform would significantly increase the ministry’s authority over foreign-invested projects, giving it power to vet compliance with yet-to-be-defined security conditions and supervise foreign aid projects. The explanatory text links the move to intensifying global strategic competition. The police, already influential in lawmaking and the economy, are led by To Lam, now Communist Party chief and Viet Nam’s most powerful figure. The decree would affect both critical infrastructure and less essential projects, with implications for foreign firms including SpaceX and Amazon planning satellite services, and multinational manufacturers such as Samsung, Honda and Intel, which have previously raised concerns about slow approvals. Legal experts warn the decree could increase compliance costs, delay projects, and effectively hand the police veto power. The draft follows a narrower 2019 decree focused on defence, but this proposal grants broader oversight, with national and local police tasked to inspect and appraise the security, social and safety impacts of investments in key areas.

RCEP Monitor

CHINA
Youth unemployment rate rises to 18.9% in August 2025
(18 September 2205) China’s National Bureau of Statistics reported that the unemployment rate for individuals aged 16 to 24 rose to 18.9% in August, up 1.1 percentage points from July and surpassing the previous record of 18.8% in August 2024, marking the highest level since university students were excluded from the survey in December 2023. This rate contrasts with 7.2% for those aged 25 to 29, 3.9% for those aged 30 to 59, and an overall unemployment rate of 5.3%. The surge is partly linked to the graduation of a record 12.22 million undergraduate and graduate students in June, about 40% higher than five years earlier, increasing the pool of job seekers amid limited demand. Private-sector investment declined 2.3% year-on-year between January and August, dampening hiring appetite among companies that traditionally employ new graduates. The statistics bureau noted youth unemployment tends to rise in summer as fresh graduates are unable to secure jobs are counted as unemployed, adding pressure on labour markets and potentially weighing on consumer spending recovery given young people’s spending patterns.

HONG KONG
Minimum threshold for residential property purchases for investor visa reduced
(17 September 2025) Hong Kong Chief Executive John Lee announced that under the New Capital Investment Entrant Scheme, the minimum threshold for residential property purchases by investor visa applicants has been reduced from HKD 50 million to HKD 30 million, while the overall investment requirement remains at HKD 30 million across eligible assets including equities, debt securities, and property. As of April, the scheme had received 1,257 applications, with 512 approved, representing more than HKD 37 billion in expected investment. The cap on the amount of residential real estate that can be counted toward the total capital investment remains unchanged at HKD 10 million. The adjustment is aimed at stimulating demand in the high-end property market, though oversupply and weak economic conditions continue to suppress home prices, which remain near their lowest since 2016 despite earlier measures such as property tax cuts and looser mortgage rules.

NEW ZEALAND
GDP contracts by 0.9% in second quarter of 2025, exceeding forecasts
(18 September 2025) New Zealand’s GDP contracted by 0.9% in the second quarter of 2025, exceeding the Reserve Bank of New Zealand’s and analysts’ forecast of a 0.3% fall, with year-on-year GDP down 0.6% against expectations of no change, according to Statistics New Zealand data. The decline marks contraction in three of the last five quarters, with construction, manufacturing output, and professional services identified as the weakest areas. The release triggered a 0.9% fall in the New Zealand dollar to USD 0.5912 and a 0.5% drop to 1.3195 per Singapore dollar by 10:50. Market pricing for rate cuts increased, with expectations rising from 48 to 58 basis points and a 20% probability of a 50 basis point cut in October. The economy had entered a technical recession in the third quarter of 2024, with only modest growth in the following two quarters. In August, the central bank signalled two further rate cuts in 2025, citing constrained household and business spending due to employment declines, higher costs for essentials, and falling house prices.