Mekong Monitor: Vietnam-Cambodia US$5 billion trade target could be reached earlier than expected

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Mekong Monitor: Vietnam-Cambodia US$5 billion trade target could be reached earlier than expected

Photo credit: Vietnam Investment Review

TRADE, ECONOMY, AND INVESTMENT

VIETNAM, CAMBODIA

Vietnam-Cambodia US$5 billion trade target could be reached earlier than expected
(5 October 2019) Vietnamese Prime Minister Nguyen Xuan Phuc and his Cambodian counterpart Hun Sen believe the US$5 billion in bilateral trade target could be achieved earlier than 2020. Both leaders committed to bolstering their business environment to better welcome bilateral investments, at a trade promotion conference they co-chaired on October 4 in Hanoi. Bilateral trade between Vietnam and Cambodia in the first eight months of 2019 grew 13.91% to US$3.54 billion and is expected to reach US$5 billion by 2020 or earlier. Vietnam is presently Cambodia’s fifth largest source of foreign investment, with investment in the first three quarters of 2019 growing 49.5% on the year totalling US$50 million.
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VIETNAM, CAMBODIA

Cambodia, Vietnam sign agreements to strengthen bilateral economic ties
(4 October 2019) Cambodian Prime Minister Hun Sen’s official visit to Vietnam last week resulted in him signing seven memoranda of understanding (MoU) and two border agreements with his Vietnamese counterpart Nguyen Xuan Phuc to further strengthen bilateral ties. The MoUs signed covered customs affairs, connecting border commercial infrastructure, as well as cooperation related to trade, investment and energy. Both leaders also signed two border agreements acknowledging the countries’ land boundaries following a review conference which showed that 84% of the countries’ land boundary demarcation work has been completed.
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MYANMAR, THAILAND

Thailand and Myanmar push ahead with plans for Dawei SEZ
(7 October 2019) Myanmar and Thailand announced that they will accelerate plans to develop the long-delayed Dawei Special Economic Zone (SEZ) in the Tanintharyi Region of Myanmar following a joint committee meeting held last week. According to Myanmar deputy energy minister U Tun Naing, Myanmar will prioritise the development of basic infrastructure connecting the SEZ to Thailand. The first phase of development will cover 27 square kilometres, funded with loans from Thailand and the Asian Development Bank. The second phase will involve the development of the remaining 169 square kilometres with funding from third parties.
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THAILAND, MYANMAR

Thailand-Myanmar trade expected to increase following opening of second bridge
(4 October 2019) Trade between Thailand and Myanmar is expected to get another boost after the opening of the second Thai-Myanmar Friendship Bridge in Mae Sot district in Tak province on October 30. Border trade between the countries grew 4.9% on the year totalling US$6.35 billion in 2018, with trade at the Mae Sot checkpoint accounting for US$2.63 billion of the total. Border trade between the countries also accounted for 18.3% of Thailand’s total border trade volume in the first eight months of 2019, totalling US$1.81 billion. The new bridge is expected to boost exports by more than 30%.
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CAMBODIA, MYANMAR

Cambodia requests Myanmar to import famous Kampot pepper to boost trade ties
(3 October 2019) Cambodian foreign affairs minister Prak Sokhonn submitted a formal request to Myanmar asking them to consider importing more Cambodian agricultural products, especially its Kampot pepper. Presently, 50% of Cambodia’s Kampot pepper is exported to the EU and 30% is consumed locally. As such, Cambodia sees this as an opportunity for the countries to boost their bilateral trade volume. According to a senior government official, bilateral trade between the countries reached US$10 million last year, up from US$4 million the year before.
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About Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.

China-ASEAN Monitor: Vietnam imposes anti-dumping tax on Chinese aluminium products

Photo Credit: Vietnam Plus

Economy, Investment and Trade

Thailand’s largest mobile operator partners up with Huawei for 5G
(3 October 2019) The Vietnamese Ministry of Industry and Trade announced last week that it has imposed anti-dumping duties on aluminium products from 16 Chinese manufacturers. Furthermore, six of these producers will face the highest anti-dumping rate of 35.58%, eight will face duties of between 18.16% and 35.39%, while two others will face duties of under 10%. The new duties, which took effect on September 28 and will last for five years, come just months after Vietnam levied anti-dumping duties on certain Chinese steel products. Vietnam’s trade deficit with China widened to US$25.11 billion in the first eight months of 2019.
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Cambodia’s rice export to China up 44% in first three quarters of 2019
(3 October 2019) Cambodia’s exports of milled rice to China in the first three quarters of 2019 grew 44% on the year totalling 157,793 tonnes. With this, China remained Cambodia’s top rice export destination, with exports to China accounting for 39.6% of the country’s total rice exports. Conversely, Cambodia’s exports to the EU fell by 30% during the period, largely due to the EU’s imposition of rice safeguard duties on Cambodian rice imports. Nevertheless, Cambodia’s total rice exports grew by 2.3% year-on-year in the first nine months of 2019.
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Chinese tourists visiting Cambodia up 33% in first 8 months of 2019
(8 October 2019) Cambodia received 1.7 million Chinese visitors in the first eight months of 2019, representing 33% year-on-year growth. With this, China remained Cambodia’s leading source of foreign visitors, with Chinese visitors representing 39% of the country’s total 4.36 million foreign arrivals during the period. According to Cambodian tourism minister Thong Khon, the country hopes to attract 2.6 million Chinese visitors this year, three million next year, five million in 2025 and up to eight million by 2030.
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Chinese investment in ASEAN startups totalled US$1.78 billion in first seven months of 2019
(6 October 2019) ASEAN technology companies received US$1.78 billion in investments from Chinese firms in the first seven months of 2019, representing an eightfold increase year-on-year. According to analysts, this growth is largely due to a lack of investment opportunities in China, and growing opportunities in Southeast Asia’s maturing digital economy. Among the year’s major deals include Chinese social network YY’s US$1.45 billion acquisition of Singaporean live-streaming startup Bigo, JD.com’s US$19 million investment in Thai fashion firm Pomelo, and AirAsia and Gobi Partners’ US$10.6 million investment in Malaysia’s EasyParcel.
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China investments into ASEAN doubles in first half of 2019
(4 October 2019) Chinese investment in ASEAN rebounded to US$11 billion in the first half of 2019, double the amount from the six months prior, according to data from a regional bank. Funds flowing into Indonesia, Cambodia, Singapore and Vietnam led this year’s rebound. All in all, projects in ASEAN accounted for 35% of all Belt and Road Initiative projects between 2014 and 2018, with Malaysia leading the way with 7.2% of investments worth US$27.5 billion.
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Mekong Monitor: Thailand-Cambodia cross-border railway begins operations

Photo credit: National News Bureau of Thailand

TRADE, ECONOMY, AND INVESTMENT

THAILAND, CAMBODIA

Thailand-Cambodia cross-border railway begins operations
(2 July 2019) The newly-extended rail link connecting Thailand to Cambodia officially began operations on September 30. The cross-border link follows the earlier signing of a memorandum of understanding between the countries to allow passenger trains to travel across their borders. With the addition of a newly-extended route on the Thai side, the rail service now starts from Bangkok to Aranyaprathet town in eastern Thailand, which then continues on to the Ban Khlong Luek border checkpoint on the Thai-Cambodian border.
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LAOS

Laos’ Savannakhet province removes all inspection checkpoints along main road
(30 September 2019) The governor of Laos’ central Savannakhet province announced last week that all inspection checkpoints along main roads in the province will be removed to expedite the flow of goods being transported and improve the country’s business environment. Among the police checkpoints which have been removed included those along the road connecting the Laos-Thailand Friendship Bridge to the Danvasan-Laobao checkpoint at the Vietnamese border, and as well as checkpoints along roads connecting Savannakhet to other central and southern provinces. The closing of the checkpoints was part of the government’s ‘Three Opens’ policy, which seeks to improve public services and attract investments.
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THAILAND

Thailand rolls out incentives to boost rail projects
(28 September 2019) Thailand’s Board of Investment (BoI) announced this week that it will now provide corporate income tax waivers of five to eight years to companies who invest in the country’s upstream, midstream, and downstream of the rail industry. The move comes as part of the government’s National Strategic Plan 2017-2036, which foresees the need for around 15,000 train bogies in the next 20 years to expand local railways. The Thai industry and transport ministries are also expected to submit a proposal to the cabinet soon outlining plans to attract companies to invest in its rail industry.
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THAILAND

Gulf-PTT joint venture wins bid in deal in Map Ta Phut area of EEC
(1 October 2019) Gulf Energy and PTT Tank Terminal’s joint venture Gulf MTP LNG Terminal won the bid to join the Industrial Estate Authority of Thailand (IEAT) in a public-private partnership to expand the third phase of the Map Ta Phut Industrial Estate (MTP3) by 1,000 rai. According to Deputy Prime Minister Somkid Jatusripitak, the MTP3 is a significant project as it is the first of five mega projects under the Eastern Economic Corridor. When completed by 2025, the MTP3 will be part of a larger transportation network connecting the Greater Mekong Subregion.
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CAMBODIA, LAOS, THAILAND

Thailand’s CP All in talks to expand 7-Eleven franchise to Cambodia and Laos
(2 July 2019) Leading Thai convenience store operator and sole 7-Eleven franchise holder CP All’s report to the Stock Exchange of Thailand on September 30 revealed that it is in negotiations for a Master Franchise agreement to bring the 7-Eleven franchise to Cambodia and Laos. However, the company noted that negotiations will be extended beyond the initial 2Q19 negotiation deadline. CP All was established in 1988 by the Charoen Pokphand Group. The company remains the sole franchise holder and operator of 7-Eleven convenience stores in Thailand.
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About Greater Mekong Subregion (GMS)

China-ASEAN Monitor: Thailand’s largest mobile operator partners up with Huawei for 5G

Photo Credit: Bangkok Post

Economy, Investment and Trade

Thailand’s largest mobile operator partners up with Huawei for 5G
(28 September 2019) Thailand’s largest mobile operator Advanced Info Service (AIS) announced recently that it has inked a memorandum of understanding (MoU) with China’s Huawei to adopt the technology giant’s 5G technologies. The announcement comes shortly after AIS competitor True Corporation announced that it has partnered with China Mobile for 5G development. Thai digital economy minister Buddhipongse Punnakanta also said last week that the government aims to roll out 5G adoption next year as they look to advance new technologies such as big data and cloud services.
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Vietnam to begin export of milk to China
(26 September 2019) Five Vietnamese companies — Vinamilk, TH True Milk, Moc Chau Milk, NutiFood and Hanoimilk — have obtained permits to export dairy products to China and will begin this month for the first time ever. China is set to import 39.43 million tonnes of dairy products this year, with local production only able to meet 75% of the Chinese market’s demand. Vietnam is, therefore, well-positioned to meet this demand as local dairy output is expected to reach one million tonnes in 2020 and double that by 2030. Vietnamese dairy exports are expected to reach US$300 million in 2020.
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Myanmar traders encouraged to use renminbi, kyat at Chinese border
(1 October 2019) Myanmar’s Federation of Chambers of Commerce and Industry (UMFCCI) urged local traders to utilise the kyat or renminbi, instead of a third currency such as the dollar, when trading at the Chinese border to help “eliminate currency exchange risks and facilitate business between buyer and seller.” The UMFCCI’s remarks were made during an event organized by the Industrial and Commercial Bank of China (ICBC), the first Chinese-funded commercial bank in Myanmar. According to the Myanmar government, Myanmar-China trade totalled US$9.6 billion from October 2018 to July 2019.
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Alibaba supercharges sale of Malaysian birds’ nests during Malaysia Week
(27 September 2019) Malaysia sold 80,000 bottles of birds’ nests during a ten-minute live-streaming session hosted by the Alibaba Group during the platform’s annual Malaysia Week campaign to promote Malaysian products to Chinese consumers. Other notable sessions also yielded sales of 30,000 packs of wafer biscuits and 20,000 durian pie biscuits, among other products. A total of 800 products from 100 local brands were promoted during the campaign, double the number of brands promoted last year. A Malaysian store was also launched on Alibaba’s domestic industrial goods wholesale platform 1688.com.
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China has become the Philippines’ largest foreign investor
(30 September 2019) China has become the Philippines’ top foreign investor in the last two years, with investments in 19 of the 75 cluster projects under President Rodrigo Duterte’s “Build, Build, Build” infrastructure programme. According to trade undersecretary Abdulgani Macatoman, Chinese investment in the Philippines totalled US$962.6 million last year — 96% of which went to manufacturing, 2% to real estate, 1% to electricity supply, and 1% to accommodation and food service. All this was achieved, argued Filipino officials, despite ongoing maritime disputes between the countries.
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CARI Captures 423: ASEAN countries improve in global trade facilitation rankings

ASEAN

ASEAN countries improve in global trade facilitation rankings
(24 September 2019) The UN Global Survey on Digital and Sustainable Trade Facilitation published this month saw overall improvements among ASEAN countries led by Singapore, Thailand and Malaysia between 2017 and 2019. Also notable were the double-digit improvements seen in Brunei (+25%), Myanmar (+19%), Indonesia (+17%), Cambodia (16%) and the Philippines (+11%). Laos came in last, having only completed six measures: having a national trade body, publishing trade regulations online, pre-arrival processing, an independent appeal mechanism, limiting physical inspection of transit goods at customs, and having a national framework for border agencies.

SINGAPORE, MYANMAR

Singapore and Myanmar sign bilateral investment treaty to facilitate investments
(24 September 2019) The 7th Singapore-Myanmar Joint Ministerial Working Committee meeting concluded with the inking of the legally-binding Bilateral Investment Treaty on the Promotion and Protection of Investments that will allow Singapore enterprises in Myanmar to seek arbitration should they run into investment disputes. The treaty also lays out rules on how Singapore and Myanmar should treat investors from each country to give investors the freedom to transfer capital and returns, seek compensation, and ensure non-discriminatory treatment for investors in many sectors, among other things. Singapore is Myanmar’s largest foreign investor, with a cumulative investment of US$22.1 billion (as of August 2019).

INDONESIA

2020 state budget bill passed into law with focus on human capital development
(25 September 2019) Indonesia’s House of Representatives passed the country’s 2020 state budget bill into law this week that sets the budget deficit at US$21.8 billion or 1.76% of GDP while targeting economic growth at above 5%. According to finance minister Sri Mulyani Indrawati, the budget is focused on stimulating the economy, human capital and social security development, infrastructure development, research and development, village and regional funds, as well as the strengthening of university endowments.

CAMBODIA

Garment workers to get increased minimum wage in 2020
(22 September 2019) Cambodia’s National Committee for Minimum Wage — comprising unions, employers and the government — announced that the minimum wage for the country’s textile and footwear factory workers will increase by US$8 next year from US$182 to US$190 per month. Furthermore, the workers will continue to receive other benefits such as an additional US$10 per month for regular attendance and US$7 per month for transportation and rent. The new rate will take effect in January 2020.

THAILAND

Thai exports see 4% drop in August, commerce ministry maintains 3% export target
(20 September 2019) Thailand’s exports declined by 4% in August, resulting in a US$21.9 billion loss. According to the commerce ministry, the drop was largely due to the front-loading of imports to avoid US tariffs which took effect on September 1. Nevertheless, the ministry is maintaining its 3% export target despite exports contracting by 2.2% in the first eight months of 2019 as they pin their hopes on commerce minister Jurin Laksanawisit’s upcoming visits to China and India where he will seek new markets for Thai agricultural products.

THAILAND

Thai government to introduce new measures to boost domestic oil palm prices
(24 September 2019) The Thai government is expected to introduce new measures to boost domestic oil palm prices in addition to its existing price guarantee scheme. These measures include making it compulsory for all petrol stations in Thailand to sell B10 biodiesel beginning 1 January 2020, purchasing palm oil to produce electricity, expediting crude palm oil (CPO) exports especially to India, and installing CPO automatic level gauges at crushing mills and refineries to provide regulators with real-time information on CPO stocks to assist decision-making.

INDONESIA

Palm oil export levies suspended to help producers cope with low CPO prices
(25 September 2019) The Indonesian government has suspended taxes imposed on exports of crude palm oil (CPO) and its derivative products until January 2020 to help palm oil producers cope with the drop in CPO prices. The suspension will last until January when the government’s new mandatory B30 biodiesel policy kicks in. CPO prices stood at US$574.9 per tonne as of September 20, and is expected to drop to US$570 per tonne until the end of the year.

THE PHILIPPINES

The Philippines mulls safeguard duty on rice to protect domestic farmers
(23 September 2019) The Philippines’ agriculture secretary William Dar said this week that the government is considering imposing a safeguard duty on rice imports to protect small farmers “by not allowing additional imports especially this main harvest season.” The move follows the government’s removal of an old import cap earlier this year which it replaced with tariffs. The move has thus far led to the importing of 2.4 million tonnes of rice and a 10-13% dip in retail prices.

THAILAND-EU

Free trade talks with the EU to resume once new European Commission formed
(24 September 2019) Thailand will resume negotiations with the European Union (EU) for a free trade agreement (FTA) once the new European Commission is formed next month. According to trade negotiations head Auramon Supthaweethum, public hearings will also be held in October and November to collect stakeholder feedback on the FTA, after which proposals will be submitted to cabinet. EU-Thailand trade reached US$47.3 billion last year, with Thai exports accounting for US$25 billion and imports US$22.2 billion. Both sides also agreed to revive talks for an ASEAN-EU FTA.

INDONESIA-JAPAN

Indonesia, Japan reach deal on rail project connecting Jakarta to Surabaya
(25 September 2019) Indonesia and Japan inked an agreement this week outlining plans for a medium-speed rail connecting Indonesian capital city Jakarta with its second-largest city Surabaya, after two years of negotiations. When completed, the rail will serve 54 trips, each carrying 900 passengers daily at double its current speed, thus reducing travel time from nine hours to five and a half hours. The development will be done in two phases: first from Jakarta to Semarang, then from Semarang to Surabaya, covering a total of 720 kilometres. Construction of the railway is expected to start in 2020.

Mekong Monitor: Laos, Vietnam central banks bolster cooperation in information technology and technical matters

Photo credit: Eleven Myanmar

TRADE, ECONOMY, AND INVESTMENT

LAOS, VIETNAM

Laos, Vietnam central banks bolster cooperation in information technology and technical matters
(18 September 2019) The central banks of Laos and Vietnam inked two memoranda of understanding to cooperate in the areas of information technology and other technical matters during a recent meeting between the governors of both central banks in Vientiane. At the meeting, the two central banks pledged to promote and create favourable conditions for commercial banks of the two countries to establish cooperation, trade and investment presence on both sides. Both central bank governors were also present at the inauguration of VietinBank’s Laos headquarters in Vientiane on the same day. VietinBank first opened its doors in Laos in February 2012.
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THAILAND, VIETNAM

Amata Corporation ready for new industrial estate in Vietnam’s Quang Tri’s province
(23 September 2019) Thailand’s industrial developer Amata Corporation is currently conducting a feasibility study with Japanese and Singaporean firms for its fourth industrial investment location in Quang Tri province. According to Amata’s local subsidiary, the province is Vietnam’s poorest province, and the site was selected following the government’s calls for more investment in the central region. The project, which will be an eco-friendly industrial estate, will be the company’s fourth development in Vietnam following Amata City in Long Thanh, Halong and Bien Hoa.
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MYANMAR

Myanmar’s foreign trade reaches US$33 billion in the current fiscal year
(24 September 2019) Myanmar’s foreign trade has so far totalled US$33.19 billion with one month left in its current fiscal year. Its exports generated US$15.97 billion while imports reached US$17.21 billion. Of the sum, maritime trade accounted for US$23.59 billion while border trade accounted for around US$9.6 billion. However, these figures represent a US$738.5 million fall when compared to figures from the same period last year, which reached US$33.9 billion.
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VIETNAM

Vietnam to consolidate Ho Chi Minh and Hanoi stock exchanges under umbrella entity
(24 September 2019) Vietnam’s finance ministry has submitted a draft calling for the consolidation of its existing stock exchanges which would see the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) becoming subsidiaries under a new entity known as the Vietnam Securities Exchange. Under the proposal, HOSE would focus on operating the stock market, HNX would focus on derivatives and bond markets, while the umbrella entity will oversee the overall policy development, compliance and management.
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THAILAND

Thai cabinet lowers public debt ceiling to 42.76%, below 60% threshold set by finance ministry
(25 September 2019) The Thai cabinet approved its public debt management plan for the 2020 fiscal year that caps its average public debt ratio to GDP at 42.76%, below the 60% threshold set by the finance ministry’s fiscal sustainability framework. The country’s public debt totalled US$225.8 million or 41.45% of GDP as of July this year. Previous records stood at 41.9% in 2012, 41.2% in 2013, 43.3% in 2014 and 41-42% in 2015-2018. The 2020 plan also covers new debt such as the mass transit projects, nine double-track rail projects, as well as basic infrastructure projects.
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About Greater Mekong Subregion (GMS)

China-ASEAN Monitor: Land-sea transport plan connecting China and ASEAN unveiled at China-ASEAN Expo

Photo Credit: Xinhua

Economy, Investment and Trade

Land-sea transport plan connecting China and ASEAN unveiled at China-ASEAN Expo
(23 September 2019) China revealed an action plan during the 16th China-ASEAN Expo held in Guangxi to further develop the land-sea corridor stretching from Sichuan province to Guangxi province and Hainan province as part of China’s plans to boost connectivity between China and ASEAN. A China-ASEAN digital trade hub was also launched during the event, and 16 major projects were expected to be signed during the four-day expo in the areas of 5G development, big data, and intelligent manufacturing. China-ASEAN trade grew 4.2% to US$292 billion in the first half of 2019, with two-way investments totalling US$230 billion as of August this year.
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China electric power companies ink US$9.91 billion in new deals in 2018
(22 September 2019) Chinese electric power companies completed 11 projects in ASEAN worth US$1.8 billion and inked a further US$9.91 billion in new deals in 2018, the China Electricity Council shared during the China-ASEAN forum held in Guangxi recently. This includes projects in hydropower, wind power, photovoltaic power and other areas. Separately, Chinese firms Chint Group and Sinomach-HE announced last week that they have submitted an application to the Cambodian energy ministry to conduct a feasibility study to develop a 150 MW hydropower dam on the Tatay River.
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Malaysia-Guangxi trade records 120% growth year-on-year in 2018
(24 September 2019) Trade between Malaysia and Guangxi province grew 120% from US$532.1 million in 2017 to US$1.2 billion in 2018, with Malaysia’s imports from Guangxi accounting for US$572.79 of the sum, according to Malaysia External Trade Development Corporation (Matrade). Meanwhile, a consortium led by Chinese construction firm Pacific Construction Group (CPCG) signed a memorandum of understanding with Malaysia’s Terengganu Jiangsu Trade Organisation (TJTO) at the China-ASEAN Expo to invest US$717.8 million to develop infrastructure such as an industrial park, free trade zone and affordable housing in Terengganu state.
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Bank of China Manila designated as clearing bank for renminbi in the Philippines
(19 September 2019) Bank of China Manila has been made the clearing bank for renminbi (RMB) business in the Philippines and its clearing facilities will soon be operational. The new facility is expected to boost cross-border settlements, trade financing, investment, loans and other financial activities. With this, the bank said, Filipino financial institutions will be able to participate in the Chinese financial market and increase their RMB asset holdings. According to SWIFT data, the total amount of RMB cleared in the Philippines from January to June in 2019 grew 45.3% year-on-year to RMB 127.4 billion (US$17.9 billion).
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China-Brunei joint venture inks crude oil supply, products distribution deals with Shell’s Brunei operations
(18 September 2019) China’s Hengyi Industries and Brunei’s Shell inked agreements on September 18 to form a joint petrochemical venture to supply crude oil to Hengyi and sell fuel products to the Brunei market. Under the agreement, Shell will supply crude oil to Hengyi’s new O&G complex in Pulau Muara Besar and Hengyi will supply refined fuel products to Shell for local distribution. Hengyi Industries is a joint venture between China’s Zhejiang Hengyi Group and Brunei’s state-owned Damai Holdings.
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CARI Captures 422: Myanmar’s National Plan 2019-2020 targets 7% growth

MYANMAR

Myanmar’s National Plan 2019-2020 targets 7% growth
(16 September 2019) The Myanmar Parliament approved this week a new National Plan for the upcoming fiscal year from 1 October 2019 till 30 September 2020. The country’s GDP is projected to grow by 7% under the plan, up from 6.8% in the current fiscal year, led by the financial and industrial sectors which are expected to grow by 11.3% and 9.9% respectively. Furthermore, the country’s trade deficit is projected to reach US$2 billion, with imports worth US$17.5 billion. The private sector is expected to contribute to over 70% of investments during the period. The World Bank however only predicts growth of 6.7% in 2020-21.

INDONESIA

Indonesia posts US$85.1 million surplus in August
(16 September 2019) Indonesian government data recorded a US$85.1 million surplus in August, up from the US$953 million deficit it recorded in August 2018. Similarly, the country recorded a US$1.81 billion trade deficit in the first eight months of the year, down from the US$4.16 billion it saw during the same period last year. According to statistics agency head Suhariyanto, August’s surplus was due to a 8.53% decrease in imports to US$14.20 billion, an even bigger fall than the 7.6% decrease in exports to US$14.28 billion in the same month.

BRUNEI

Brunei’s total trade records 0.8% y-o-y fall in June
(16 September 2019) Brunei’s total trade recorded a 0.8% year-on-year fall to US$894.4 million in June as exports also fell by 9% on the year reaching only US$461.3 million during the month. According to Brunei’s finance ministry, the fall was largely due to the 7.9% drop in crude oil exports and 22.5% drop in liquefied natural gas exports. Most of its exports went to Japan (36.7%), Singapore (15.3%), Australia (10.6%) and Thailand (9.8%). Meanwhile, Brunei’s imports grew 9.8% on the year reaching US$433 million.

SINGAPORE

Singapore’s non-oil exports fell 8.9% in August
(17 September 2019) Singapore’s non-oil domestic exports recorded its sixth consecutive month of year-on-year decline as it fell 8.9% in August, according to the latest government data. This was primarily due to lower exports to most of its key markets such as Hong Kong (-32%), Malaysia (-19.7%) and the US (-15%), led by a drop in electronic exports (25.9%). However, its exports to China recorded a 38.5% increase. The country’s total trade fell by 8.6% year-on-year in August, following a 6.2% drop in July.

THE PHILIPPINES

The Philippines’ domestic trade weakens in Q2 2019
(18 September 2019) Total domestic trade in the Philippines decreased 10% to 5.86 million tonnes during the second quarter of 2019 from 6.51 million tonnes in the same quarter in 2018, according to the Philippine Statistics Authority (PSA). In terms of value, total domestic trade fell by 17.9% year-on-year from US$4.14 billion in the second quarter of 2018 to US$3.4 billion in the same quarter this year. Trade of machinery and transport equipment accounted for 36.3% of the total value, while food and live animals accounted for most of the total trade in terms of quantity.

MALAYSIA

Malaysia sets up panel to fast-track investments amidst trade war
(17 September 2019) Malaysia’s new National Committee on Investment (NCII) has approved US$526 million in new investment proposals this month, said deputy trade minister Ong Kian Ming. According to Ong, the NCII was established to expedite investment approvals as the country looks to attract businesses affected by the US-China trade war. For instance, he said, proposals which would have taken three months to process before will now only take a month. The NCII is chaired by the ministers of finance and trade who have the authority to approve incentives immediately.

MALAYSIA

Axiata seeks Malaysia, Indonesia operations mergers after Telenor talks end
(17 September 2019) Malaysian telecommunications company Axiata Group may merge its Indonesian and Malaysian operations in the next three to five years to “future proof” the company, said Axiata head Jamaludin Ibrahim. Jamaludin’s comment follows Axiata’s recent announcement that it has ended talks with Telenor ASA to form a joint venture. According to Bloomberg, Southeast Asian telcos have been turning to mergers and acquisitions in recent years to ensure continued growth, with deals in the sector totalling US$2.7 billion so far this year.

MALAYSIA-US

US scrap industry eyes Southeast Asia as China’s market closes
(13 September 2019) The US scrap industry is turning to Southeast Asian countries, especially Malaysia and Indonesia as destinations for US nonferrous exports following China’s crackdown on scrap imports. According to a recent US commodity roundtable held in Chicago, Malaysia is now the top destination for US nonferrous exporters who are seeking alternatives outside of China. US aluminium exports to Malaysia in the first seven months of 2019 alone reached 120,000 tonnes, expected to eclipse 2018’s total of 180,000 tonnes.

THAILAND, CAMBODIA

Thai, Cambodian SEC sign pact on capital markets
(18 September 2019) Thailand and Cambodia’s Securities Exchange Commission (SEC) inked a memorandum of understanding (MoU) this week to connect their capital markets through cross-listing, dual listing and depositary receipt offerings. According to Thai SEC head Ruenvadee Suwanmongkol, both sides will develop capital market products for securities issuers for sale in each country, while providing greater support for business expansion, increased liquidity and access to funding resources. The initiative is also in line with Thailand’s long term strategy to position itself as a regional fundraising hub.

ASEAN

RCEP talks to proceed without investor-state dispute mechanism
(13 September 2019) Countries involved in the Regional Comprehensive Economic Partnership (RCEP) negotiations agreed during the recent 7th RCEP Ministerial Meeting held in Bangkok to put negotiations for the pact’s investor-state dispute settlement (ISDS) mechanism on hold. It is hoped this will ensure that negotiations can be concluded by the end of the year, said Malaysian trade minister Darell Leiking. However, they will review the need for such a mechanism once the pact is ratified and in force. The next round of RCEP talks will be held in Vietnam from 19 to 27 September.

Mekong Monitor: Laos, Cambodia agree to halt development in unsettled border area

Photo credit: Bangkok Post

TRADE, ECONOMY, AND INVESTMENT

LAOS, CAMBODIA

Laos, Cambodia agree to halt development in unsettled border area
(13 September 2019) Lao Prime Minister Thongloun Sisoulith’s recent official visit to Cambodia resulted in the inking of six cooperation agreements between the parties, including power purchasing agreement, a revised agreement on bilateral energy cooperation, and a memorandum of understanding on labour cooperation. Furthermore, both sides agreed to ensure peace at their shared border by putting a halt to any development around these areas until clearer lines are drawn to demarcate their lands. The two sides also agreed to remove the military presence in the unsettled area and agreed on joint-border land, water and air patrols which can be carried out by drones.
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CAMBODIA

Sihanoukville airport to expand passenger capacity to 10 million
(16 September 2019) The Cambodian State Secretariat of Civil Aviation announced recently they have approved the master plan for the construction of a new terminal at Sihanoukville airport in preparation for its hosting of the ASEAN Summit in 2022, as well as the rise in tourists and investors visiting the province. The new terminal will expand the airport’s capacity to 10 million, with the first phase of construction slated to start in 2020. According to Cambodia Airports, Sihanoukville airport saw a 210% rise in arrivals in 1H2019 totalling 755,000 people.
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CAMBODIA, THAILAND

Koh Kong province’s first coal-fired plant seeking new buyers for electricity
(16 September 2019) Cambodian Koh Kong province’s coal-fired power plant — a project backed by Thailand’s state-owned electricity company, Electricity Generating Authority of Thailand, — is still seeking buyers for the power that the facility generates, said Cambodian energy director-general Victor Jona. According to him, the initial plan was to produce 3,600 MW of electricity for Thai consumption, and a further 200 to 300 MW for the local market. However, negotiations fell through with the Thai buyers.
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MYANMAR

US$81.6 billion in capital invested into Myanmar in the last 30 financial years
(15 September 2019) Myanmar’s investment authority recently approved eight local and foreign investment projects which are expected to create 3,159 jobs, according to the Directorate of Investment and Company Administration (DICA). The investments were in livestock and fisheries, manufacturing, real estate, and oil and gas. With this, DICA says that a total of 1,806 foreign companies have been given permits to invest in the country, bringing in US$81.6 billion in capital in the last 30 financial years. Singapore, China and Thailand were Myanmar’s top investors during the period, with the country’s oil and gas, power and manufacturing sectors attracting the most investment.
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MEKONG

CLMVT countries must upgrade to become new global value chain
(14 September 2019) Cambodia, Laos, Myanmar and Vietnam should upgrade and become a new global value chain within the world economy, said Thai commerce minister Jurin Laksanawisit during a recent CLMVT business forum. He noted the four countries hold rich agricultural raw materials for Thailand and developed countries that provide them with Generalised System of Preferences (GSP) benefits, making them perfect production bases for the region. However, Jurin also urged the CLMVT countries to work together and enhance their consumer safety standards, quality checks, environmental protections and technological capabilities in order to play a larger role in the global supply chain network. The combined trade value within the CLMVT in the first seven months of 2019 showed a 1.7% year-on-year increase to US$28.1 billion.
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About Greater Mekong Subregion (GMS)

China-ASEAN Monitor: The Philippines, Chinese firms ink US$1.1 billion business deals

Photo Credit: Business Mirror

Economy, Investment and Trade

The Philippines, Chinese firms ink US$1.1 billion business deals
(17 September 2019) Filipino and Chinese firms inked nine agreements worth a combined US$1.1 billion on September 16 during the PH-China (Chongqing) Trade and Investment Forum held in Pasay City. The largest deal was a US$1 billion agreement between Davao-based Eng Sent Food Products and Chongqing Hongjiu Fruit. Other notable agreements included a memorandum of understanding between Hyundai Motor Group, Beijing Hyundai Motor and Hyundai Asia Resources; and several agreements between private automobile companies in both countries. Merchandise trade between both countries rose by nearly 21% from US$25.48 billion in 2017 to US$30.83 billion in 2018.
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Singapore, Chongqing deepen cooperation with international data link
(11 September 2019) Around 30 agreements were inked between public and private Singaporean and Chongqing entities on September 11 during Chongqing party secretary Chen Min’er’s recent visit to Singapore. Most notably, Chen witnessed the launch of the China-Singapore (Chongqing) International Data Channel — a dedicated link to strengthen digital connectivity between Singapore and western China by providing enhanced network reliability and lower latency. The new 260Gbps data link is powered by a tie-up between Singapore’s Singtel and Starhub, and China’s big three telcos, and is China’s first international data link.
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Royal Brunei Airlines to reinstate daily direct flights to Beijing
(13 September 2019) Royal Brunei Airlines announced recently that its first flight to Beijing is scheduled to take off on October 27. The airline will operate flights to Beijing four times a week, with plans to increase this to a daily flight beginning 14 January 2020. According to the airline, it will also be one of the first few international airlines to operate out of the new Beijing Daxing International Airport, as it adds to its existing flights to Shanghai, Hangzhou and other key cities. China remains Brunei’s top source of foreign visitors.
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Vietnamese car imports from China fell 87% y-o-y in 2018
(15 September 2019) Vietnam’s car imports from China saw an 87% drop from 11,800 in 2017 to 1,565 in 2018, according to the Vietnamese Ministry of Industry and Trade. Furthermore, only 900 cars were imported during the first eight months of 2019. The significant fall in imports from China was due to the 0% import tariffs it now benefits from with regards to intra-ASEAN imports of vehicles with less than nine seats. As such, ASEAN accounted for 88.8% of Vietnam’s car imports last year, while China accounted for only 1.9% of the sum.
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Vietnamese agricultural and aquatic exports see 7.2% y-o-y dip due to lower Chinese demand
(14 September 2019) Vietnam’s export revenue from agricultural and aquatic products saw a 7.2% year-on-year dip during the first eight months of 2019, reaching only US$16.6 billion. According to Vietnam’s import-export head, this is largely due to declining demand from its top export market China, who has also tightened regulations on such imports. For instance, as part of China’s internal restructuring, the General Administration of Customs of China became the sole administrative body responsible for imports and exports as of June 1, thus raising the barriers to trade.
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