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
Chinese President Xi Jinping Concludes Southeast Asia Tour
(21 April 2025) Chinese President Xi Jinping completed a diplomatic tour of Viet Nam, Malaysia, and Cambodia, focusing on reinforcing regional cooperation through trade, infrastructure, and cultural agreements. The visit included the signing of multiple trade deals, highlighting strengthened bilateral ties, particularly with Malaysia, where China remains the largest trading partner with 2024 trade volumes reaching MYR 450 billion (USD 100 billion). ASEAN-China trade totalled MYR 4.3 trillion (USD 980 billion) in 2024. Xi’s itinerary included Viet Nam, Malaysia—currently ASEAN chair and country coordinator for ASEAN-China Dialogue Relations—and Cambodia, a long-time ally. The trip was interpreted as a strategic effort to position China as a stable economic and political partner amid global uncertainties. Casey Barnett of the American Chamber of Commerce in Cambodia noted Xi’s emphasis on historical ties to frame enduring regional partnerships. Asanga Abeyagoonasekera of the South Asia Foresight Network described the visit as a calculated demonstration of China’s credibility and regional leadership, aligned with Xi’s broader vision of a global community with a shared future.

MALAYSIA, EFTA
Malaysia highlighted as strategic investment destination for EFTA members
(24 April 2025) Swiss and Icelandic parliamentarians from the European Free Trade Association (EFTA) highlighted Malaysia’s growing appeal as a strategic investment destination for EFTA members—Switzerland, Iceland, Norway and Liechtenstein—due to its cost-effectiveness relative to Singapore and technological advancement over Viet Nam. The Swiss delegation cited China’s shift toward domestic production and export barriers as factors pushing Swiss firms to explore Malaysian opportunities. The Icelandic delegate noted Malaysia’s neutral foreign policy and balanced ties with both the US and China as key advantages amid geopolitical uncertainty. A new Malaysia-EFTA Economic Partnership Agreement (Meepa), to be signed in June, will eliminate import duties into EFTA countries and replace Malaysia’s existing preferential access under the Generalised System of Preferences. The Malaysian Investment, Trade and Industry Minister stated Meepa would offer long-term trade certainty. Separately, Switzerland is negotiating a new investment protection agreement with Malaysia to replace the current 1978 treaty. The Swiss delegation expects Swiss parliamentary approval but noted a potential delay if a public referendum is triggered.

MALAYSIA
IMF downgrades Malaysia’s 2025 GDP growth forecast to 4.1% from 4.7%
(23 April 2025) The International Monetary Fund (IMF), in its April 2025 World Economic Outlook, downgraded Malaysia’s 2025 real GDP growth forecast to 4.1% from 4.7%, with a further projection of 3.8% for 2026, citing regional and global economic pressures. The IMF also revised global growth for 2025 to 2.8%, down 0.5 percentage points from its January estimate, amid uncertainty stemming from recent tariff escalations by the United States, including widespread duties announced on 02 April and modified from 09 April onward. Regional downgrades include Indonesia (4.7% from 5.1%), the Philippines (5.5% from 6.1%), and Thailand (1.8% from 2.9%). The IMF highlighted diverging productivity trends, with industrial production rebounding in China and ASEAN-5 countries but remaining weak in Japan and major EU economies. US industrial production has shown stronger recovery relative to other advanced economies. Inflation is gradually aligning with central bank targets, and labour markets have largely normalised.

MALAYSIA, INDONESIA
Malaysia and Indonesia mulling large-scale plantation projects in Kalimantan and Papua
(24 April 2025) Malaysia and Indonesia are considering the development of large-scale plantations in Central Kalimantan and South Papua, following discussions between Malaysia’s Minister of Agriculture and Food Security and Indonesia’s Minister of Agriculture. Both parties also agreed to examine cross-border agricultural cooperation in West and North Kalimantan, targeting strategic sectors such as rice, dairy, animal feed, coconut, and grain corn, all identified as critical to their respective food security agendas. Indonesia’s Minister of Agriculture presented Indonesia’s agricultural transformation strategies, including smart technology adoption, a three-season annual padi planting model, and high-yield varieties like IPB 9G. During a working visit that began on 20 April, Malaysia’s Minister of Agriculture and Food Security also met with the leadership of Perusahaan Umum Bulog, Indonesia’s main agency for managing staple food stocks, to discuss collaboration in padi sector development, food supply chain management, strategic reserves, and logistics infrastructure. The Ministry of Agriculture and Food Security stated that the visit aligns with Malaysia’s broader goals to enhance food security and build a competitive, sustainable food system, particularly in its role as 2025 ASEAN Chair.

INDONESIA
Indonesia to implement higher mineral royalty rates on 26 April 2025
(24 April 2025) Indonesia will implement higher mineral royalty rates on 26 April 2025, raising nickel ore royalties from 10% to between 14% and 19% depending on price levels, and increasing rates for coal, gold, copper and tin based on price and permit conditions, with some doubling. The government stated the new policy is intended to maximise national benefit and ensure fairness and sustainability in resource management. The move comes amid declining tax revenue, the cancellation of a VAT increase, and rising expenditure on President Prabowo Subianto’s flagship programmes, including a national free meals initiative. Industry representatives have criticised the timing, citing a fall in commodity prices—nickel futures fell to USD 14,015 per tonne on 09 April—and geopolitical pressures. Concerns raised include investment uncertainty, rising operational costs, and potential production halts or mass layoffs. Nonetheless, the Indonesia Nickel Miners Association supports implementation, while acknowledging that a 14% royalty could make some mines unviable. The royalty hike aligns with Indonesia’s broader industrialisation and downstream policy, including a 2020 ban on raw mineral exports, and its long-term economic goals targeting 8% annual growth by 2029.

THE PHILIPPINES
The Philippines’ strategically positioned to benefit from lower tariffs
(24 April 2025) A study by the Philippine Institute for Development Studies found that the Philippines is among the least exposed Southeast Asian economies to the new US tariff regime, facing a 17% average tariff rate—the lowest among Malaysia, Thailand, Indonesia, Viet Nam and the Philippines. Using a Tariff Exposure Composite Index, the Philippines and Indonesia both scored 2.2, placing them in the moderate risk category; however, Indonesia is more vulnerable due to its higher 32% tariff and narrower exemption coverage of only 10%, compared to the Philippines’ broader 33% exemption coverage, primarily in semiconductors and electronics. Malaysia, with a 24% tariff and the highest exemption coverage at 46%, scored 2.8. Vietnam and Thailand, with tariffs of 46% and 36% respectively, scored 3.4 and 3.0, reflecting higher exposure; Vietnam sends 35% of its exports to the US, the highest in the group. The study concludes that the Philippines is strategically positioned to benefit from diverted trade and investment due to its favourable tariff structure and product mix. However, it notes that the country lacks the infrastructure, manufacturing scale, and investment readiness to immediately capitalise, highlighting the need for improvements in logistics, export promotion, and investment facilitation.

VIET NAM, CHINA
Chinese firms operating in Viet Nam face uncertainty due to tariffs 
(24 April 2025) Chinese businesses operating in Viet Nam are facing uncertainty due to the potential imposition of a 46% US tariff on Vietnamese exports, with firms like Huochacha New Energy Group reporting delays in factory projects and equipment orders from clients such as TCL. The firm’s manager confirmed that three to four projects are currently on hold, attributing this to client hesitancy amid the tariff threat. Despite Viet Nam’s current 10% blanket US tariff, businesses remain cautious ahead of possible reciprocal measures in July. Chinese investment in Viet Nam has surged, with China ranking third among foreign investors in 2024 and accounting for over 25% of newly registered projects, driven by trade friction with the US and intensifying competition in China. In Bac Ninh province, home to significant Chinese and South Korean industrial activity, the number of Chinese residents exceeded 10,000 by end-2023 and has likely risen further. Managers cited growing interest from Chinese firms seeking to relocate production and access new markets. A 2024 IMF report found no clear evidence of Viet Nam facilitating Chinese exports to the US, but some have acknowledged entrepôt trading practices among clients. In response, Viet Nam’s trade ministry has instructed tighter control over goods origin to mitigate sanction risks. Labour impacts are also emerging, with workers at Chinese-owned factories, such as Hung, reporting reduced hours and income uncertainty. Investor sentiment remains cautious, with planned capital expenditures and equipment upgrades delayed due to the trade outlook.

RCEP Monitor

JAPAN
Japanese pharmaceutical companies show relative resilience amid broader market declines
(22 April 2025) Japanese pharmaceutical companies have shown relative resilience amid broader market declines triggered by U.S. tariff threats, with Takeda, which earns 89% of its revenue overseas (51.5% from the U.S.), maintaining stable share performance due to localised U.S. production of its blood plasma products. Chugai Pharmaceutical’s stock rose 19% year-to-date following positive Phase 3 results for orforglipron, licensed to Eli Lilly, while its overseas operations and royalties are managed by Roche. Shionogi anticipates over 50% of its revenue from royalties on HIV treatments licensed to GSK’s ViiV. Despite pharmaceuticals currently being exempt from reciprocal tariffs, a 25% sectoral tariff remains under review, with a Section 232 investigation launched by the U.S. Commerce Department on 01 April to assess national security risks tied to pharmaceutical imports. Market uncertainty persists over which products will be affected, complicating investment and operational planning. BMI and UBS analysts highlight continued inelastic demand for patented drugs, while concerns remain over cost distribution—whether borne by patients, insurers or manufacturers. The U.S. continues to push for greater access for innovative U.S. drugs in Japan. Globalised production, including shifts to Ireland and Singapore, has contributed to a growing U.S. pharmaceutical trade deficit, which now makes up 11% of the USD 1.2 trillion total. Japan also maintains pharmaceutical trade deficits with the U.S. and Europe, though analysts suggest Japan’s drug sector may not be central to Trump’s tariff agenda.

CHINA
Chinese state-backed funds halting new investments into US private equity 
(21 April 2025) Chinese state-backed funds, including China Investment Corporation (CIC), are halting new investments in U.S. private equity, driven by government pressure amid escalating trade tensions with the U.S. Multiple private equity executives confirmed that Chinese funds have withdrawn from allocating capital to U.S.-headquartered buyout firms and are also avoiding deals involving U.S. companies, even when led by non-U.S. firms. This policy shift follows U.S. tariff hikes on Chinese exports of up to 145%, and reciprocal Chinese tariffs of up to 125%. Some Chinese investors are reversing previously planned allocations that were not yet finalised. Historically, sovereign entities like CIC and the State Administration of Foreign Exchange have been among the largest investors in U.S. alternative assets, with approximately 25% of their USD 1.35 trillion and USD 1 trillion portfolios, respectively, allocated to this asset class as of 2023. Chinese funds had been major backers of firms including Blackstone, Carlyle, TPG, Vista, and Thoma Bravo, sometimes investing directly or via partnerships such as CIC’s joint fund with Goldman Sachs. The current investment freeze marks a significant reversal after decades of capital flow from Chinese sovereign wealth funds into U.S. private equity, which helped expand the industry to USD 4.7 trillion in assets under management. Global investors, including Canadian and European pension funds, are also reassessing their commitments due to the evolving geopolitical risk environment, according to statements from industry executives including Blackstone President Jonathan Gray.

AUSTRALIA
Australia mulls establishing AUD 1.2 billion critical minerals strategic reserve
(24 April 2025) Australian Prime Minister Anthony Albanese announced that, if reelected on 3 May, his government will establish a AUD 1.2 billion (USD 760 million) critical minerals strategic reserve. The reserve will purchase, stockpile, and sell domestically produced critical minerals, including rare earths, to strengthen economic resilience and national security. It will support domestic industries and allies by providing access to priority minerals during market or trade disruptions. Funding will be sourced by expanding the existing critical minerals facility, which has already allocated over AUD 1 billion to projects such as Iluka and Arafura. The reserve, set to be operational in the second half of 2025, will involve voluntary national offtake agreements and include a pricing mechanism to underwrite mining projects. Domestic availability and global sales are both planned revenue streams. The scheme follows industry lobbying for floor-price guarantees, with Citi noting positive market implications, especially for NdPr rare earth oxide. The reserve will also maintain modest, time-limited stockpiles based on strategic assessments. The move comes amid China’s dominance in mineral processing and recent export controls, and Australia’s efforts to position itself as a key supplier to low-carbon and defence industries. However, challenges remain in downstream processing due to cost and complexity, and existing tax credits for mineral processing are not effective until 2027.

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.

SINGAPORE
Singapore’s upcoming general election to focus on cost of living and job security 
(15 April 2025) Singapore’s general election on 03 May 2025 will be the first major electoral test for Prime Minister Lawrence Wong, who succeeded Lee Hsien Loong in May 2024. The ruling People’s Action Party (PAP), which has governed since 1965, is aiming to recover from its 2020 result of 61.2% of votes, down from 69.9% in 2015. The election will be contested across 97 parliamentary seats, with key voter concerns centring on cost of living (34% of respondents in a January Blackbox Research survey), job security, and economic resilience amid rising U.S. tariffs. Wong’s February budget included SGD 2 billion in household and wage support, viewed by analysts as election groundwork. The Workers’ Party, led by Pritam Singh—recently convicted for lying to a parliamentary committee—seeks to expand beyond its 10 current seats, while the Progress Singapore Party, founded by former PAP MP Tan Cheng Bock, campaigns on affordability and tax cuts. Eugene Tan of Singapore Management University noted rising appetite for opposition among younger voters and framed the vote as a key inflection point for Wong’s political future.

THAILAND, MALAYSIA
Thailand and Malaysia confirm collective ASEAN response to US tariffs
(17 April 2025) Prime Minister Anwar Ibrahim and Thai Prime Minister Paetongtarn Shinawatra confirmed a joint commitment to address U.S. tariffs at the ASEAN level through a fair and sustainable negotiation framework, following bilateral discussions held during Anwar’s two-day visit to Thailand. The leaders also reviewed bilateral economic initiatives, including advancing cross-border economic cooperation in northern Malaysia and southern Thailand. Bilateral trade surpassed USD 25 billion in 2023, with a target of USD 30 billion by 2027. A memorandum of understanding was signed concerning the construction agreement for the Rantau Panjang–Sungai Golok Bridge, which is on schedule. Discussions also covered peace in Thailand’s southern provinces, with Malaysia agreeing to cooperate on economic development projects such as halal food production and the Rubber City project. Paetongtarn emphasised ASEAN’s potential to act collectively on tariff-related issues, while acknowledging that each member state would continue with individual strategies.

ASEAN
Trump’s tariff threats prompts renewed calls to strengthen intra-ASEAN trade 
(15 April 2025) U.S. President Donald Trump’s imposition of 33% average tariffs on ASEAN nations has exposed the region’s dependence on global markets and prompted renewed calls to strengthen intra-ASEAN trade, which accounted for only 21% of total trade in 2024, according to ASEANstats. Malaysian Prime Minister Anwar Ibrahim, chairing ASEAN in 2025, urged regional economic self-reliance, but structural barriers persist, including nontariff measures, weak demand, and limited political coordination. Fitch Solutions estimates the tariffs could reduce Viet Nam’s GDP by up to 3 percentage points and Singapore’s by 1 point, with regional losses averaging 1.5 points. Despite tariff eliminations under the ASEAN Trade in Goods Agreement, the number of non-tariff measures more than doubled to 9,494 between 2008 and 2020, led by Thailand, the Philippines and Indonesia. ASEAN Business Advisory Council chair Nazir Razak highlighted the bloc’s lack of enforcement mechanisms and suggested intra-bloc trade may be structurally capped at 30%. Analysts warn of over-reliance on China, whose exports to ASEAN are growing, potentially worsening trade asymmetries, while compliance burdens may rise for firms to prove no Chinese links amid 145% U.S. tariffs on China. Industry voices stress the need for deeper regional integration through harmonised standards and investment in value chains. The ASEAN Economic Community and a proposed ASEAN Business Entity badge aim to address mobility barriers. The Philippines and Viet Nam are positioning to attract tariff-displaced investment, but relocation of capital-intensive manufacturing may take two to five years.

THE PHILIPPINES, UNITED STATES
Filipino officials claim country is less exposed to trade shocks
(14 April 2025) A Philippine delegation led by Special Assistant to the President for Investment and Economic Affairs Frederick Go will visit the United States in May to address potential U.S. tariffs on Filipino exports, with the administration framing the trip as diplomatic engagement rather than confrontation. The Economic Planning Secretary stated that the Philippines’ relatively small exposure to global trade, compared to its Asian neighbours, limits its vulnerability to external shocks. However, he stressed the urgency of enhancing export performance and investment conditions to benefit from trade diversion resulting from U.S. tariff measures. The Philippines is seeking a free trade agreement with the U.S. to preserve market access, building on existing pacts with South Korea and Japan. Balisacan affirmed that economic targets remain unchanged, citing resilient domestic consumption, which accounts for approximately 75% of GDP, as a growth driver. The government maintains its 2025 GDP growth forecast at 6.0% to 8.0%, with Balisacan calling the lower end of the range still achievable despite global uncertainty.

INDONESIA
Trade surplus projected to have narrowed to USD 2.64 billion in March 2025  
(17 April 2025) Indonesia’s trade surplus is projected to have narrowed to USD 2.64 billion in March from USD 3.12 billion in February, according to the median forecast of eight economists surveyed by Reuters. The expected decline is attributed to a 3.4% year-on-year contraction in exports, following 14.05% growth in February, and a 6.6% increase in imports, up from 2.3% the previous month, coinciding with higher domestic consumption during the Eid-al-Fitr festival. While Indonesia has maintained a monthly trade surplus since mid-2020, economists have cautioned that the current 90-day pause on U.S. tariffs may only temporarily delay negative impacts on Indonesian exports.

THAILAND
Bank of Thailand preparing to revise its GDP forecast downwards due to US tariffs
(17 April 2025) Thailand’s central bank is preparing to revise its GDP forecast downward at the 30 April Monetary Policy Committee meeting due to the expected impact of US tariffs, according to Assistant Governor Sakkapop Panyanukul. Growth is now projected to fall below the previously signalled 2.5%, with estimates indicating a potential reduction of up to one percentage point if the 36% levy is maintained beyond the current 90-day pause. The Bank of Thailand’s February 25-basis point rate cut had partially accounted for tariff effects; however, a further reassessment is planned, including inflation projections, which may ease further due to declining global commodity prices. The central bank, which has reduced rates by 50 basis points since October, is coordinating closely with the Finance Ministry, with Thailand’s Finance Minister set to lead negotiations in the US beginning 23 April. Prime Minister Paetongtarn Shinawatra has proposed increasing imports of US commodities and lowering import restrictions to mitigate the trade impact. Financial markets have experienced high volatility following the 02 April tariff announcement, with the baht fluctuating between a five-month low and a six-month high, and the stock index briefly hitting a five-year low. The BOT has intervened to manage excessive baht volatility but views currency movements as consistent with regional trends. Foreign exchange reserves stand at USD 247 billion and are considered well diversified despite rising US Treasury yields.

MALAYSIA
GDP grows 4.4% year-on-year in Q1 2025, below 4.8% median forecast
(18 April 2025) Malaysia’s GDP grew 4.4% year-on-year in Q1 2025, below the 4.8% median forecast and marking the third consecutive quarter of slowing growth, driven by weaker performance in manufacturing, construction, and a 4.9% contraction in mining and quarrying. The services sector remained the primary contributor to growth, expanding 5.2%, though also at a slower pace than the previous quarter. Advance estimates from the statistics department indicated that seasonal factors, including Chinese New Year, Ramadan preparations, and the school reopening, supported activity. Employment remained strong, with the unemployment rate stable at 3.1%. The government is reviewing its 4.5%-5.5% growth forecast for 2025 amid uncertainty from global trade tensions, particularly following a 24% US import tariff, later reduced to 10% for 90 days. Bank Negara Malaysia is maintaining its policy stance for now, with the last rate move being a 25-basis-point hike in May 2023, but analysts suggest easing may be considered if growth drops towards 3% in H2. Malaysia’s Investment Minister stated that Malaysia is engaging with the US to reduce tariffs and expand exemptions. Regional peers, including the Philippines and Singapore, have already eased monetary policy in response to global trade risks. Malaysia recorded 5.1% GDP growth in 2024, in line with official forecasts and above 2023 levels.

RCEP Monitor

CHINA
GDP grows 5.4% in Q1 2025, surpassing 5.2% forecast  
(16 April 2025) China’s GDP grew 5.4% year-on-year in Q1 2025, surpassing the 5.2% forecast, driven by stronger-than-expected March data including a 7.7% rise in industrial output and a 5.9% increase in retail sales. The National Bureau of Statistics attributed the growth partly to front-loaded exports in anticipation of US tariffs. However, the economic outlook has worsened following President Trump’s imposition of 145% tariffs, which are expected to significantly reduce US-China trade from April onwards. Economists warned of a rapid downturn without urgent stimulus, citing early signs of falling US-bound shipments. The government has acknowledged external risks and weak domestic demand, and released a 48-point plan in March to boost consumption in services sectors such as catering, healthcare, entertainment and tourism. A Politburo meeting later in April may signal the scale and timing of further stimulus. Despite early momentum, economists at UBS, Goldman Sachs, Citigroup and Societe Generale have revised 2025 growth forecasts to around 4%, below the official 5% target. Measures under consideration include interest rate cuts, reserve ratio reductions, and trillions of yuan in new fiscal borrowing. Markets reacted negatively to tariff concerns, with Hong Kong-listed Chinese stocks falling up to 2.9%. No high-level US-China talks have occurred, and President Xi has not responded to Trump’s requests for negotiations.

CHINA
New-home prices in China’s 70 major cities decline 0.08% in March from February  
(16 April 2025) New-home prices in China’s 70 major cities declined 0.08% in March from February, easing from a 0.14% fall the prior month, while existing-home prices fell 0.23%, the smallest drop in nearly two years, according to National Bureau of Statistics data. Year-on-year, new-home prices declined 4.99% and existing-home prices 7.25%, both moderating from February. Residential sales by value fell 0.4% year-on-year in March, but private data indicated an 11% decline in new home sales by China’s 100 largest developers. Property investment dropped 9.9% in Q1. The deputy NBS head confirmed policy effects were beginning to stabilise the housing market, though overall demand remains subdued. Analysts expect further support measures in Q2 amid escalating external risks, notably the 145% US tariffs imposed by President Trump. Goldman Sachs estimated 20 million Chinese workers—around 3% of the labour force—may be exposed to US-bound exports, raising concerns of broader economic strain.

JAPAN, SOUTH KOREA
Japanese and Korean steel exports to US decline following US tariffs  
(17 April 2025) Japanese steel exports to the United States declined 16.6% year-on-year in March, while South Korea’s fell 24%, following the 25% U.S. tariffs imposed on March 12. Total Japanese iron and steel exports dropped 8.2% during the month, compared to a 14.1% decline for South Korea, according to Japan’s Ministry of Finance. Despite this, Japan’s overall exports rose 3.9%, marking six consecutive months of growth, attributed to front-loading ahead of U.S. tariff enforcement. Vehicle exports increased 7.2%, and chipmaking equipment exports rose 4.2%. A 10% baseline tariff on Japanese goods took effect on 05 April, while an additional 24% ‘reciprocal tariff’ announced in early April is on hold for 90 days. Separately, a 25% U.S. tariff on imported vehicles from 03 April targets Japan, which supplied 13% of U.S. vehicle imports in 2024. Japan’s imports increased 2.0% year-on-year in March, resulting in a trade surplus of JPY 544 billion (USD 3.8 billion). Moody’s Analytics noted that front-loaded exports may mask underlying weakness, with expectations for significant declines ahead due to worsening global trade conditions.

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
Southeast Asian economies among hardest hit by Trump’s new tariffs
(03 April 2025) The United States has imposed unexpectedly high tariffs on six Southeast Asian countries, with Viet Nam and Cambodia receiving the highest rates at 46% and 49% respectively. Thailand was hit with a 37% tariff, exceeding the 11% it had anticipated. These tariffs, significantly above those for the EU (20%), Japan (24%), and India (27%), threaten regional economies that had benefited from the China+1 strategy. Viet Nam, where exports to the U.S. totalled USD 142 billion in 2024 (nearly 30% of GDP), has seen its stock index drop 6.7% and its currency reach an all-time low. Viet Nam’s Trade Minister sent a diplomatic note to the U.S. and is seeking talks, while Prime Minister Pham Minh Chinh convened an emergency cabinet meeting and launched a task force. ING estimates that 5.5% of Vietnam’s GDP is at risk. Thailand, facing 3% GDP exposure, has also committed to negotiations. Malaysia, facing a 24% rate, will likewise pursue dialogue without retaliatory measures. On 10 April, Trump announced a 90-day pause on ‘reciprocal’ tariffs on countries who had not retaliated in order to allow ongoing negotiations to continue. During this time, the universal baseline tariff of 10% will remain in place.

THAILAND
Bill legalising casinos to be delayed as opposition mounts
(08 April 2025) Thailand has delayed parliamentary debate on the integrated entertainment business bill, which includes legalising casinos, amid prioritisation of responses to the recent 36% U.S. tariff and last month’s earthquake in Bangkok. The bill, endorsed by the cabinet in March, limits casinos to 10% of integrated complex space and proposes entry restrictions for Thai citizens, including proof of THB 50 million in bank deposits. Opposition parties and civil groups have criticised the bill for favouring large corporations and bypassing sufficient public consultation. Thailand’s Prime Minister confirmed the bill will not be withdrawn but deferred to the next parliamentary session. She stated that casinos would only be located in approved resorts and that the government will continue public communication to address concerns. Finance ministry officials project each complex could attract THB 100 billion in investment and create 20,000 jobs, increasing foreign tourist spending by 40%.Licences would require THB 10 billion in paid-up capital, with a 30-year permit priced at five billion baht initially and one billion baht annually thereafter. Target locations for complexes include Bangkok, Chiang Mai, and Phuket.

VIET NAM, SPAIN
Viet Nam and Spain commits to strengthening economic cooperation amidst rising trade tensions
(09 April 2025) Viet Nam and Spain committed to strengthening economic and defence cooperation during Spanish Prime Minister Pedro Sanchez’s visit to Hanoi, as both countries face newly imposed U.S. tariffs—46% on Vietnamese exports and 25% on EU goods. Viet Nam’s Prime Minister Pham Minh Chinh expressed intent to elevate bilateral relations to a comprehensive strategic partnership. Both leaders emphasised support for multilateralism, rules-based international order, and opposition to trade conflicts. Spain signalled interest in expanding investment in Viet Nam, particularly in railway infrastructure, citing experience from its high-speed rail network. Vietnam is pursuing major railway projects, including a proposed 1,541 km high-speed line between Hanoi and Ho Chi Minh City, and connections to China.

INDONESIA, UNITED STATES
Indonesia announces series of import tax reductions on US goods
(08 April 2025) Indonesia has announced a series of import tax reductions on US goods—including steel, mining products, health equipment, electronics, mobile phones and laptops—as part of a broader effort to negotiate relief from a new 32% US tariff set to take effect on 09 April. Indonesia’s Chief Economic Minister, who will lead a high-level delegation to Washington next week, stated that Indonesia also plans to increase imports of US liquefied petroleum gas, liquefied natural gas, and soybeans. Indonesia’s Finance Minister confirmed reductions in US import tariffs to a 0–5% range from previous rates of 5–10%, and cuts in import tax on electronics from all countries to 0.5% from 2.5%. The measures were disclosed during a high-level policy meeting attended by President Prabowo Subianto, senior ministers, the central bank governor, and financial authorities. Indonesia recorded a USD 16.8 billion trade surplus with the US in 2024, with exports valued at USD 26.3 billion, primarily comprising electronics, apparel, and footwear. The Chief Economic Minister stated that the tariff impact on Indonesia would be limited, noting US exports represent only 2.2% of national GDP. He also suggested that Indonesia could replace Viet Nam and other Asian economies as a supplier to the US under the revised trade regime. President Prabowo remarked that the tariffs underscored the strategic need for national economic self-reliance. The government is also reviewing a potential reduction in local content requirements for US tech and communications firms and may increase US imports for an oil refinery project.

MALAYSIA
Malaysia announces commitment to develop border areas with Thailand and Indonesia 
(08 April 2025) Malaysian Prime Minister Anwar Ibrahim announced commitments to develop border areas with Thailand and Kalimantan in Indonesia to strengthen ASEAN cooperation and stimulate cross-border economic activity, citing the Johor-Singapore Special Economic Zone (SEZ) as a model. Speaking at the ASEAN Investment Conference 2025, held alongside the 12th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting, Anwar emphasised infrastructure investment as essential for regional resilience against climate change and natural disasters. He identified technologies such as carbon capture, circular production, and low-emission innovation as critical to ASEAN’s future industrial landscape.

THE PHILIPPINES
Bangko Sentral ng Pilipinas reduces key rate amidst slowing inflation
(10 April 2025) The Bangko Sentral ng Pilipinas reduced its target reverse repurchase rate by 25 basis points to 5.5% on 10 April, marking a resumption of monetary easing amid heightened global uncertainty linked to new US tariff policies. The decision, anticipated by 26 of 28 economists in a Bloomberg survey, follows a period of stability after three previous cuts. The move comes as US President Donald Trump imposed a 17% tariff on US imports from the Philippines—lower than the rates applied to Indonesia, Malaysia, and Viet Nam—before announcing a 90-day pause and setting a base tariff rate of 10% for most countries, while raising duties on China to 125%. The BSP cited increased uncertainty over global economic policies despite inflation in March easing to a five-year low. In March, the central bank also lowered banks’ reserve requirement ratio, releasing approximately PHP 300 billion (USD 5.2 billion) into the financial system. The April rate cut is intended to support market confidence and domestic growth against a volatile external backdrop.

LAO PDR
Lao PDR’s GDP forecast to grow by 4.0% in 2026 according to ADB
(10 April 2025) According to the Asian Development Bank, Lao PDR’s GDP is forecast to grow by 3.9% in 2025 and 4.0% in 2026, driven mainly by logistics and tourism services, while macroeconomic pressures persist. The kip stabilised in late 2024 following tightened monetary policy, with an annual depreciation of 5.4% against the US dollar and a 1.2% appreciation against the Thai baht. Inflation averaged 23.3% in 2024, driven by high food, alcohol, restaurant, and hotel prices, but is projected to ease to 13.5% in 2025 and 10.4% in 2026. Increased electricity tariffs from March 2025 are expected to exert upward price pressure. Export values in electricity, minerals, and agriculture are set to rise, though agriculture will face climate-related constraints and labour shortages. The 2025 budget targets a 1.0% GDP deficit, with revenue projected to grow 36% to LAK 68.1 trillion and expenditure by 19.1% to LAK 71.8 trillion, supported by tax reforms and administrative improvements. Foreign currency-denominated debt and US tariff hikes remain key external risks, potentially impacting Lao PDR directly and indirectly via neighbouring trading partners.

RCEP Monitor

JAPAN
Commodity-related stocks record steep losses amid concerns over global recession
(08 April 2025) Japan’s commodity-related stocks, particularly nonferrous metals and oil and coal product sectors, have recorded steep losses amid concerns over a global recession triggered by U.S. President Donald Trump’s new tariff regime. The Topix nonferrous metals index dropped 13% on Monday and remains over 10% lower than levels at the beginning of the month. The oil and coal sector index fell more than 20%, while banking stocks posted the second-largest decline, linked to expectations that the Bank of Japan may not proceed with further interest rate hikes. The broader Topix index declined 14% over the same period. Market rebound on 08 April partially recovered earlier losses, but analysts warned the recovery may be temporary. Under Trump’s new policy, a baseline 10% tariff was introduced on 05 April, with country-specific higher rates commencing 09 April. China has announced retaliatory tariffs of 34% beginning 10 April and threatened further escalation. In response, Malaysia is coordinating an ASEAN-level reaction. Defensive stocks in sectors such as land transport, food retail, and pharmaceuticals have shown relative resilience, each declining less than 10%.

CHINA
Onshore Chinese yuan falls to 19-month low after central bank set its reference rate weaker
(08 April 2025) The onshore Chinese yuan fell to 7.34 per U.S. dollar on 08 April, its weakest level since September 2023, following the People’s Bank of China’s (PBOC) decision to set its reference rate at 7.2038, compared to 7.198 the previous day. The offshore yuan dropped to approximately 7.352. The PBOC’s weaker fix signals a potential shift in policy to allow the currency to depreciate in response to rising U.S. tariffs. This follows U.S. President Donald Trump’s threat to impose an additional 50% tariff on China unless it withdraws retaliatory measures. Analysts view the move past the 7.2 threshold as a more proactive stance by the PBOC, although sharp depreciation is deemed unlikely due to capital outflow risks. The PBOC is expected to maintain currency stability while preparing for potential monetary easing. Analysts are monitoring for possible interest rate cuts and further easing to mitigate expected pressure on exports.

SOUTH KOREA
South Korea announces USD 2 billion emergency support package for automobile sector  
(09 April 2025) South Korea has announced a USD 2 billion emergency support package in response to U.S. President Donald Trump’s imposition of a 25% tariff on South Korean automobiles and auto parts, a sector which accounted for USD 42.9 billion in exports to the U.S. last year. The government warned of significant impact on the auto industry and committed to “flexible action” based on evolving damage assessments. Key measures include a KRW 2 trillion expansion of low-cost financing for auto firms, a KRW 1 trillion support programme led by Hyundai Motor and financial institutions, and tax deferrals of up to nine months for affected companies. To strengthen the domestic market, the government will operate an electric vehicle subsidy system tied to manufacturer discounts and will raise its matching support ratio from 20–40% to 30–80%. The initiatives aim to safeguard the country’s manufacturing base amid reduced export volumes. Trump discussed the tariffs with South Korea’s acting president, but uncertainty persists over whether the tariffs are a permanent measure or a negotiating tactic. The U.S. trade deficit with South Korea in goods reached over USD 66 billion in 2024.

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.

THAILAND
Thailand’s economic outlook worsens following Myanmar earthquake
(31 March 2025) Thailand’s economic outlook has worsened following the Myanmar earthquake, which killed at least 1,700 in Myanmar and 18 in Bangkok, with 70 workers missing in the latter after a building collapsed. The Stock Exchange of Thailand fell 1.7% on Monday, led by declines in property and financial shares. Kasikorn Research estimates an immediate economic impact of THB 20 billion (USD 590 million), primarily from reduced consumer spending. Analysts expect the Bank of Thailand (BOT) to consider another interest rate cut at its 30 April meeting, following reductions in February and October. Standard Chartered and Citi Research highlighted that the BOT’s “outlook-dependent” policy stance increases the likelihood of easing, while the central bank has urged financial institutions to provide relief to disaster-affected borrowers. BOT officials stated that while the earthquake’s impact on tourism and consumption is expected to be short-term, the property sector may face longer-term pressure due to safety concerns. The Thai Hotels Association forecasts a 10%–15% decline in international tourist arrivals over the next two weeks. The finance ministry maintains that economic fundamentals remain strong, targeting 3% growth in 2024, while the property market’s recovery may be delayed due to unsold condominiums and earthquake-related fears.

ASEAN
Japanese expats leave Southeast Asia, replaced by local hires
(02 April 2025) The number of Japanese expatriates in Southeast Asia has declined, with Japan’s Ministry of Foreign Affairs reporting a 14.7% drop in Thailand to 70,421 between 2021 and October 2024, and sustained declines in Indonesia, the Philippines, Viet Nam, and Malaysia. Mercer Japan attributes this trend to companies increasingly relying on local managers for market adaptation, a shift from the traditional three-to-five-year expat assignments. Rising regional incomes and dual-income households in Japan have also reduced overseas postings, as partners are reluctant to interrupt their careers. A survey by staffing firm Uzuz found that 52.7% of 1,118 respondents did not want to work abroad, citing language concerns and reluctance to leave home. Transfers within Southeast Asia, such as Singaporean staff moving to Thailand, are becoming more common under global HR strategies. Factory closures by Suzuki, Nissan, and Honda in Thailand may impact future expatriate numbers, but the Annual Report of Statistics on Japanese Nationals Overseas states these closures have not significantly contributed to the decline. Despite fewer Japanese expatriates, the number of Japanese corporate offices in Southeast Asia is increasing, according to Japan’s Ministry of Foreign Affairs.

ASEAN
Southeast Asian stock markets suffer drops following new US tariffs
(03 April 2025) Viet Nam’s main stock index fell 6.7% on 03 April, its sharpest one-day drop since September 2001, as Southeast Asian markets declined following new US tariffs. Around 70% of shares on the Ho Chi Minh Stock Exchange hit the 7% daily loss limit, with Bank for Investment & Development of Vietnam and Bank for Foreign Trade of Vietnam among the largest drags. The US imposed tariffs of 46% on Vietnamese exports, 36% on Thai exports, and 32% on Indonesian exports, while China now faces a cumulative 54% tariff. Investors had expected lower tariffs, prompting panic selling. Singapore stocks recovered some losses after being hit with a 10% tariff, and its dollar strengthened alongside the Philippine peso. Southeast Asia’s sovereign debt insurance costs rose, with credit-default swaps widening by the most in 19 months, while Indonesia’s five-year CDS reached its highest level since October 2023. The region’s currencies remained volatile, with the rupiah down 2.8% this year. China opposed the US tariffs and pledged countermeasures, raising trade tensions. Markets await potential retaliatory moves from affected nations.

LAO PDR
Lao PDR sets targets for energy and mining sectors, including increasing its contribution to 25% of GDP
(02 April 2025) Lao PDR’s Prime Minister Sonexay Siphandone has set targets for Lao PDR’s energy and mining sector, aiming for it to contribute 25% of GDP and maintain annual growth of 10%–12%. Speaking at the annual sector meeting on 31 March, he called for reforms to maximise economic benefits, reduce Electricité du Laos’ (EDL) debt, and enforce responsible mining. Strategic objectives include enhancing law enforcement and governance, developing viable power projects, expanding transmission networks for domestic and export use, and implementing balanced electricity pricing. Sonexay stressed the need for financial stability at EDL, strengthening grid infrastructure to attract investment, and enforcing sustainable mineral resource management. He urged deeper engagement with ASEAN, international organisations, and financial institutions to secure support, alongside increased foreign investment and technological expertise. Stakeholders were called to coordinate efforts in power generation, transmission, and market development to ensure energy security. He reiterated that the sector must drive Lao PDR’s economic transformation by 2030 and serve as a foundation for industrial growth while maintaining sustainability.

VIET NAM, LAO PDR
Viet Nam and Lao PDR aim to strengthen trade and investment ties through exhibition
(03 April 2025) The 5th Exhibition of Ho Chi Minh City and Friendship Provinces and Cities in Savannakhet is taking place from 2 to 6 April, with the aim of strengthening Viet Nam-Lao PDR trade and investment ties. The deputy head of Ho Chi Minh City’s National Assembly deputy delegation underscored the event’s importance in fostering business partnerships. Savannakhet’s Vice Governor highlighted the exhibition’s role in trade expansion and market promotion. The expo features 250 booths, drawing over 50 enterprises from seven Lao provinces and Vietnamese businesses from Australia, Thailand, Lao PDR, and Cambodia. More than 130 companies from Viet Nam’s Quang Bình, Quang Tri, Long An, Gia Lai, and Ho Chi Minh City are showcasing products such as handicrafts, jewellery, wooden furniture, home decor, agricultural goods, and food. A key event is the Lao PDR-Viet Nam Trade and Investment Promotion Conference, focused on business networking, investment policy discussions, and priority sector insights to deepen economic cooperation.

CAMBODIA
Trump’s tariffs could diversify FDI sources for Cambodia
(03 April 2025) Dr Jayant Menon, visiting senior fellow at ISEAS-Yusof Ishak Institute, stated that US President Donald Trump’s newly announced tariffs could shift the trade war’s focus from “Made in China” to “Made by China,” potentially affecting Cambodia through supply chain disruptions. He noted that the additional 10% tariffs would negatively impact Chinese exports and Southeast Asian economies linked to the electronics supply chain. While previous tariff measures led Chinese firms to relocate production to Southeast Asia, Trump’s new approach—targeting ownership rather than location—may reduce the likelihood of Cambodia benefiting from redirected Chinese FDI. However, non-Chinese FDI currently based in China or Viet Nam may seek diversification, which could reduce Cambodia’s dependence on a single country. Menon stressed that economic diversification is critical for Cambodia, as its early-phase shift from agriculture to industry is nearing its limit. Future diversification must come from intra-sectoral specialisation, requiring government intervention. He identified two major constraints: limited human capital with skill mismatches and high business costs due to infrastructure, energy, and financing issues. Menon emphasised the need for enhanced education, vocational training, and collaboration with the private sector to improve workforce skills and reduce business costs.

THE PHILIPPINES
The Philippines positioning itself to benefit from relatively lower US tariffs
(03 April 2025) The Philippines is positioning itself to benefit from relatively lower US tariffs, with the country’s Trade Secretary seeking discussions with her US counterpart to enhance economic ties. President Donald Trump’s executive order set a tariff of 18% on Philippine exports, revised from an earlier 17%, the second lowest in Southeast Asia after Singapore’s 10%, and significantly lower than Viet Nam’s 46% and Thailand’s 37%. Key Philippine exports such as copper ores, integrated circuits, and coconuts are either exempt or face lower tariffs than regional competitors. The Philippines’ Finance Secretary noted the potential for expanding garment and coconut-based product exports to the US, as major competitors like China, Bangladesh, and Viet Nam face higher tariffs. The US accounted for 17% of Philippine exports in 2023, with electronic products comprising more than half. The government’s initial assessment suggests the direct impact of tariffs will be less severe than for other ASEAN nations. The country is also exploring market access improvements for key exports, including automobiles, dairy, frozen meat, and soybeans, under a potential bilateral free trade agreement. US-Philippines trade reached USD 23.5 billion in 2024, with the US trade deficit rising 22% to USD 4.9 billion.

RCEP Monitor

AUSTRALIA-CHINA
Australian businesses remain cautious with Chinese market due to geopolitical uncertainties
(02 April 2025) The chairman of the Australia China Business Council, stated that despite renewed optimism in trade relations, Australian businesses remain cautious due to geopolitical uncertainties and the possibility of Beijing reinstating trade barriers. Speaking at the Boao Forum for Asia, he highlighted the importance of balancing economic ties with China while recognising risks. The CEO of Fortescue Metals noted that demand for critical minerals would surpass geopolitical tensions, with Australian mining firms maintaining strong ties with Chinese counterparts. However, heightened scrutiny of foreign investment, driven by national security concerns and alliances such as AUKUS, has slowed Australian initiatives like the energy transition, which requires Chinese technology and capital. Australian businesses are now focusing on diversification, acknowledging that overreliance on China is risky. Some have pointed to new opportunities in the Chinese market including renewable energy and services, the latter of which include elderly healthcare and sports infrastructure. There have also been warnings against siloed trade policies, emphasising the benefits of open markets. China’s experience in diversifying away from the US during past trade disputes may mitigate future risks.While Australia seeks increased foreign investment, regulatory scrutiny remains a challenge.

SOUTH KOREA
South Korea lift its 17-month short-selling ban on 31 March 2025
(31 March 2025) South Korea will lift its 17-month short-selling ban on 31 March 2025, reopening its USD 1.7 trillion market to hedge funds and global investment banks. The move is expected to boost liquidity and support the country’s bid for an MSCI upgrade to developed market status. Firms including Pictet Asset Management and Amundi SA plan to increase investments, while Citigroup raised its Kospi target by 4%, viewing the resumption as a market catalyst. Short selling accounted for 5% of Kospi turnover before the November 2023 ban, which was implemented due to unlawful naked short selling. A new electronic monitoring system to detect such trades will launch alongside the ban’s removal. Franklin Templeton expects near-term volatility but sees potential long-term gains if corporate governance improves under the “Value-up” initiative. Foreign investors have sold USD 20 billion in South Korean stocks since August, and the government may accelerate MSCI upgrade efforts, with potential watchlist inclusion by June 2025 or 2026. The convertible bond market, which declined during the ban, may see renewed activity. Major short-selling targets include Samsung Electronics, due to concerns over its technological leadership, as well as EV battery makers Samsung SDI, Ecopro, and Posco Future M. Goldman Sachs analysts predict a possible short squeeze in the sector.

CHINA, MALAYSIA
Chinese AI ambitions fueling expanding Malaysian data centre sector
(03 April 2025) Malaysia’s data centre capacity has nearly doubled since 2021, reaching 504.9 megawatts in 2024, with further expansion driven by Chinese tech firms seeking offshore facilities for AI training and data storage. YTL Corporation’s new 605-megawatt data centre park, set to begin operations in May, will contribute to this growth. Malaysia’s low operating costs—30% cheaper than Singapore—along with access to US-designed microchips, have made it a strategic hub for Chinese AI firms facing US export restrictions. Major investors include Alibaba Cloud and ByteDance, with Chinese firms using Malaysia’s data centres for e-commerce, social media, and AI applications. The region’s AI-driven demand for data centres is expected to rise, supporting industries like smart home devices, drones, and autonomous vehicles. However, geopolitical risks remain, with potential US regulations limiting Chinese access to Southeast Asian computing power. Malaysia’s environmental challenges include resource-intensive cooling needs and concerns over sustainable power sources, leading Johor to reject some new data centre applications.

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.

VIET NAM
Viet Nam records 17.5 million international arrivals in 2024, ranking third in Southeast Asia 
(25 March 2025) Viet Nam recorded 17.5 million international arrivals in 2024, surpassing Singapore and ranking third in Southeast Asia behind Malaysia (25 million) and Thailand (35 million). It leads the region in tourism recovery, regaining 98% of its pre-pandemic levels, ahead of Thailand (87.5%) and Singapore (86%). In January and February 2024, 4 million international tourists visited, a 30.2% year-over-year increase, according to the Vietnam National Authority of Tourism. Key growth factors include Vietnam Airlines’ first nonstop US route (San Francisco–Ho Chi Minh City, launched in 2021), expanded electronic visa policies from 2023 allowing 90-day stays, and visa-free entry for over a dozen countries. Security concerns in Thailand have driven more Chinese visitors to Viet Nam. The country aims for 23 million international arrivals in 2025, with Long Thanh International Airport opening by March to raise capacity to 25 million. By 2030, Viet Nam seeks to surpass Malaysia, leaving Thailand as its primary competitor in regional tourism.

VIET NAM, UNITED STATES
Viet Nam to reduce tariffs on several US products to improve trade balance
(26 March 2025) Viet Nam will reduce tariffs on several US products as part of efforts to improve trade balances. The tariff on US liquefied natural gas will drop from 5% to 2%, on automobiles from 45%–64% to 32%, and on ethanol from 10% to 5%. Vietnam will also eliminate tariffs on US ethane. The decree formalising these cuts is expected within the month and will take effect immediately. Viet Nam’s trade surplus with the US exceeded USD 123 billion in 2023. The cuts align with its Comprehensive Strategic Partnership with the US and recent measures to address its trade surplus. US President Donald Trump has announced an 02 April decision on reciprocal tariffs targeting trade partners with high surpluses, referring to the date as a “Liberation Day” for the US economy. The US Treasury Secretary has indicated that the focus will be on the “Dirty 15” economies with the highest goods trade surpluses with the US. The US Census Bureau lists Viet Nam among these economies, along with China, the EU, Mexico, Taiwan, Japan, South Korea, and others. White House officials have warned that early tariff reductions may not guarantee exemption from new US tariffs, as factors such as non-tariff barriers and currency policies will also be considered. The Office of the United States Trade Representative has sought public input on reciprocal tariffs, focusing on countries that collectively account for 88% of total US goods trade.

MALAYSIA, UNITED STATES
United States expected to impose tariffs on several Malaysian exports
(27 March 2025) The US is expected to impose tariffs on Malaysia’s electrical and electronics (E&E), rubber, furniture, and optical and scientific equipment exports, which are among the most vulnerable sectors, according to UOB. E&E exports account for 40% of Malaysia’s total exports, making it the third-largest Asian supplier of electrical machinery to the US. Rubber, furniture, and optical and scientific equipment exports to the US represent 2.9%, 3.5%, and 9% of Malaysia’s total exports, respectively. Malaysia ranks 15th on the US trade deficit list with a USD 24.8 billion (MYR 109.9 billion) deficit. The tariffs stem from the America First Trade Policy executive order, signed by Trump on 20 January 2024, which initiated trade investigations based on trade deficits and economic security. UOB expects retaliatory measures from major economies but notes Malaysia is unlikely to respond with countermeasures. The final tariff structure will depend on Malaysia-US negotiations and proactive policy responses. Trump’s trade strategy, aimed at reshoring US manufacturing, is expected to be more aggressive, with scope for negotiations but limited chances of full tariff removal.

MALAYSIA
Increasing pressure on Malaysia’s external balance forecasted due to slowing export growth and US tariffs  
(28 March 2025) ANZ forecasts increasing pressure on Malaysia’s external balance due to slowing export growth and potential US tariff hikes, which could weaken the ringgit. The currency, stable since early 2025 after strong appreciation in 2024, may depreciate to 4.60 against the US dollar by year-end. The FBM KLCI remains 6% below its 2024 close amid continued foreign equity outflows. Malaysia’s trade and current-account surpluses provide some currency support, with the current-account surplus projected to remain at 1.7% of GDP. However, the balance of payments surplus may narrow to 0.5% of GDP in 2025 from 0.8% in 2024. Lower foreign investment approvals in 2024 suggest weaker foreign direct investment inflows, while global financial market volatility points to a moderate financial account surplus. The government is relying on domestic demand, supported by household spending and business investment, to offset external risks. Bank Negara Malaysia has maintained its 2025 GDP growth forecast at 4.5%–5.5%, despite increasing trade uncertainties.

MALAYSIA, SINGAPORE
Companies investing in JS-SEZ may receive additional incentives beyond standard tax breaks  
(27 March 2025) Companies investing in the Johor-Singapore Special Economic Zone (JS-SEZ) may receive additional incentives beyond standard tax breaks, including talent incentives and import duty exemptions, depending on their economic impact. Investors in the 3,571 sq km zone already qualify for a 5% tax rate for up to 15 years on new manufacturing investments exceeding MYR 1 billion (USD 226 million). The Malaysian government will evaluate projects based on their strategic value, employment creation, and local business impact. South Korean dental implant company Onecera is considering a USD 10 million investment in JS-SEZ for manufacturing, citing lower costs compared to Singapore. The Korea-Asean Business Forum in Seoul, organised by UOB, Kim & Chang, and PwC, highlighted rising South Korean investments in Southeast Asia, which reached USD 10.9 billion in 2023, making South Korea the sixth largest investor in the region. UOB has opened its 11th foreign direct investment advisory centre in Seoul, supporting Korean companies expanding into ASEAN. Since 2011, UOB has facilitated over 150 Korean companies’ investments in Southeast Asia, totalling nearly SGD 3 billion. ASEAN’s growing middle class and strategic market have made it appealing for South Korean businesses.

INDONESIA
Hari Raya homecoming travel expected to decline by 24% in 2025 due to economic slowdown  
(28 March 2025) Indonesia’s Hari Raya homecoming travel is expected to decline by 24% in 2025, with 146.48 million travellers compared to 193.6 million in 2024. Indonesia’s Transport Minister attributed the drop to rising ticket prices, economic slowdown, and widespread industrial layoffs. Domestic flight prices surged, with Jakarta-Padang fares increasing from IDR 1.2 million to IDR 6 million since the start of Ramadan. Layoffs affected 60,000 workers in January and February, according to the Indonesian Trade Union Confederation. The government has introduced discounts on flights, toll fees, and shopping, along with food price stabilisation measures. It has also allocated IDR 50 trillion in religious allowances for three million civil servants and recommended a 20% holiday bonus for four million gig economy motorcycle riders. Gojek and Grab have provided bonuses under specific conditions. Household consumption, contributing 54.04% to GDP in 2024, has slowed, with Ramadan spending growing only 5%–7%, compared to 9%–12% in previous years. February’s Consumer Price Index fell by 0.09% year-on-year, the first recorded deflation since 2000. Weak demand, falling food prices, and layoffs have been attributed as key factors behind declining purchasing power.

THE PHILIPPINES
Bangko Sentral ng Pilipinas on track to resume rate cuts in April
(25 March 2025) The Bangko Sentral ng Pilipinas (BSP)’s Governor stated that the central bank is on track to resume rate cuts in April, with a likely 25-basis-point reduction, and total cuts could reach 75 basis points in 2025 depending on economic data. Inflation has remained within the BSP’s 2%-4% target for seven consecutive months, and the Philippine peso has gained nearly 1% against the US dollar this month, easing pressure for currency market intervention. Remolona confirmed that the BSP has been intervening less in foreign exchange markets in recent months. A 200-basis-point reduction in the reserve requirement ratio (RRR) for big banks will take effect on Friday, lowering it to 5% and injecting billions of dollars into the financial system. The BSP aims to reduce the RRR to zero over time while managing liquidity risks. Despite keeping the benchmark interest rate unchanged in February due to global uncertainties, the central bank continues its easing cycle. Remolona noted “somewhat more upside risk than downside risk” for inflation in 2025 and 2026. The last rate cut occurred in December before an unexpected pause in February.

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
Share of local pop music in Southeast Asia’s streaming market increasing
(16 March 2025) The share of local music in Southeast Asia’s streaming market is increasing, driven by lower production and distribution costs, rising middle-income consumers, and social media promotion. In Indonesia, homegrown music accounted for 35% of on-demand streaming in 2023, up 12 percentage points from 2020, while U.S. music declined by 5 points to 26%, and K-pop fell from 12% to 8%, according to Luminate. A similar trend is seen in Thailand, where local “T-pop” groups like 4EVE and Proxie are gaining traction. Thai and Indonesian music is also popular in neighboring countries such as Cambodia, Laos, Myanmar, and Vietnam, with Thai drama theme songs becoming regional hits. Migrant workers contribute to the spread of these cultural influences. Japanese music has a 2% share in Indonesia and Thailand’s streaming market, compared to under 1% in the U.S. and U.K. PwC forecasts the Asian music market will grow 20% to USD 20.8 billion by 2028. Indonesia’s per-capita GNI reached USD 4,810 in 2023, a 5.5-fold increase over two decades, while Thailand’s rose 3.3 times to USD 7,200, placing both in the World Bank’s upper-middle-income category.

MALAYSIA
Malaysian state-linked funds to increase investments into local startups
(17 March 2025) Malaysia’s state-linked funds Employees Provident Fund, Khazanah Nasional, and Permodalan Nasional Berhad will allocate an additional MYR 120 billion (USD 27 billion) to private companies, including startups, over five years. The funds, which collectively manage MYR 1.7 trillion in assets, typically allocate MYR 440 billion annually to domestic investments. The initiative aims to reduce reliance on foreign direct investment (FDI) and strengthen economic resilience by focusing on high-growth sectors such as technology and infrastructure. Malaysia secured MYR 378.5 billion in approved FDI in 2023, up 14.9% year-on-year, though future FDI inflows face uncertainties. The economy expanded by 5.1% in 2024, driven by household spending, and the stock market saw increased IPO activity. The government seeks to diversify economic drivers through investments in semiconductors, artificial intelligence, and data centres while maintaining focus on traditional sectors like tourism. Supply chain realignments continue to favour Malaysia, reinforcing its role in global trade.

THAILAND
Thailand to ease restrictions on alcohol sales and advertising 
(20 March 2025) Thailand’s House of Representatives approved amendments to the alcohol control bill, easing restrictions on sales and advertising, with Senate approval still pending. The bill revokes a 1972 ban on alcohol sales between 11:00 – 14:00 and 17:00 – 23:00 and relaxes advertising rules that previously prohibited displaying brand names, trademarks, or images of alcoholic beverages. A Thai lawmaker stated the amendments aim to reduce “unreasonable control” and boost economic activity. The changes follow recent legislation allowing microbreweries and small distilleries to compete in a market historically dominated by Thai Beverage Pcl and Boon Rawd Brewery Co. Prime Minister Paetongtarn Shinawatra has also indicated that the government may review other restrictions affecting tourism, including the ban on alcohol sales during Buddhist holy days and online sales. The measures align with broader efforts to enhance Thailand’s tourism appeal, alongside initiatives such as cannabis legalisation and proposed casino legalisation.

VIET NAM
Viet Nam plans to cut the number of provinces by 50%
(18 March 2025) Viet Nam plans to cut the number of provinces by 50% and reduce commune-level authorities by 60% – 70% before August 2024, according to Viet Nam’s Interior Minister. This follows previous reductions in government ministries from 30 to 22 and a planned 20% cut in public sector jobs over five years. As of 2022, nearly 2 million people worked in the public sector, with 100,000 set for redundancy or early retirement under ongoing reforms. So far, 22,000 jobs have been eliminated, according to VNExpress. The government has also announced the elimination of district-level authorities. Communist Party General-Secretary To Lam has stated that state agencies should not serve as “safe havens for weak officials.” Concerns have emerged over administrative slowdowns, but the foreign ministry denies any impact on investment or business operations.

THE PHILIPPINES
Bangko Sentral ng Pilipinas (BSP) anticipated to reduce rates by 50 to 75 basis points in 2025
(20 March 2025) The Philippine economy is expected to grow between 6% and 7% in 2024, supported by interest rate cuts, according to the country’s Finance Secretary. He anticipates the Bangko Sentral ng Pilipinas (BSP) will reduce rates by 50 to 75 basis points this year, with the first cut possible at the 10 April meeting. Inflation remains within the BSP’s 2% – 4% target, and the peso has strengthened by 1% against the dollar in 2024 after hitting a record low of 59 in December. The BSP’s assistant governor stated that inflation is projected to stay within target for the next two years, providing monetary policy flexibility. Recto dismissed concerns over political instability following former President Rodrigo Duterte’s arrest, saying there is “zero” risk of unrest. The government plans to raise PHP 100 billion through state asset sales, including a hydroelectric power plant.

THE PHILIPPINES, UK
The Philippines and UK to begin trade talks following lifting of import ban on British beef and poultry
(17 March 2025) The UK and the Philippines will begin trade talks following the Philippines’ decision to lift an import ban on British beef and poultry. The UK’s Trade Minister will meet the Philippine Undersecretary in London on Monday to discuss trade expansion, focusing on infrastructure, renewable energy, agriculture, and technology. The removal of the import ban, which was imposed due to cases of mad cow disease and bird flu, is expected to generate GBP 80 million for the UK meat industry over five years. Bilateral trade between the two countries is valued at approximately GBP 2.8 billion annually. Discussions will also cover up to GBP 5 billion in financing from UK Export Finance to support sustainable public infrastructure in the Philippines. The initiative is part of the UK’s broader strategy to expand trade ties in Asia, alongside ongoing negotiations with China, South Korea, Malaysia, and a post-Brexit reset with the EU.

INDONESIA
Indonesia seeing widespread layoffs as Eid approaches
(20 March 2025) Indonesia’s textile sector has seen widespread layoffs, with over 10,000 workers losing jobs at PT Sri Rejeki Isman (Sritex) on 26 February following its failed bankruptcy appeal. Sritex’s closure follows shutdowns at more than 60 textile and garment manufacturers between January 2023 and December 2024 and recent closures of major firms such as Yamaha Music, Sanken Electronic, and Danbi International in early 2025. The Indonesian Trade Union Confederation reported 60,000 job losses across 50 companies in January and February, while the Centre for Research at the Parliamentary Expertise Agency forecasts 280,000 layoffs in 2025, pushing unemployment to 5.2%. Analysts cite government policies favouring new investments and easing import restrictions as factors exposing domestic industries to foreign competition, particularly from China. The Central Bureau of Statistics reported a 0.09% year-on-year deflation in February, the first since March 2000, attributed to discounted electricity tariffs, though economists warn it signals weakening consumption and investment. Indonesia posted 5.03% GDP growth in 2024, with a 5% forecast for 2025, below President Prabowo Subianto’s 8% target. To counter slowing consumption, the government announced a IDR 445.5 trillion stimulus, Ramadan and Eid discounts, and IDR 50 trillion in religious holiday allowances for civil servants.

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
Southeast Asia accounts for 12% of global branded residence projects in 2024 
(11 March 2025) Thailand leads Southeast Asia’s branded residences market, with 12,656 units valued at USD 6.2 billion, while foreign interest—particularly from Chinese buyers—has driven sales. Branded residences are typically luxury residences licensed by global hotel brands and built by local developers. Savills GRDC data indicates that Southeast Asia accounted for 12% of global branded residence projects in 2024, with industry experts forecasting the region will rival North America’s 25% share within a decade. Luxury brands such as Four Seasons, Aman, and Porsche are expanding in the region, with Porsche’s 22-unit Bangkok tower set to open in 2028, featuring units priced between USD 15 million and USD 40 million. Nobu Hospitality and Mandarin Oriental are also investing, with projects in Viet Nam and Indonesia. Rising demand is driven by an increase in high-net-worth individuals, with Knight Frank projecting a 38.3% rise in Asians with at least USD 30 million by 2028. However, concerns exist over market sustainability, with some developers making unsustainable return promises of 10%–15% annually. Industry players warn of risks from mismanaged projects and sudden brand withdrawals, as seen in Phuket and Bali.

THAILAND
Government aims to exceed 3% target for 2025 through THB 150 billion stimulus package
(10 March 2025) Thailand’s government aims to exceed its 3% economic growth target for 2025 with a THB 150 billion stimulus package set to be implemented by end-Q3. The package will fund several stimulus measures including the next phase of the THB 450 billion “digital wallet” scheme. The programme, which provides THB 10,000 per person, will expand in Q2 to 2.7 million individuals aged 16–20 via a smartphone application to improve spending control. Fourth-quarter 2024 GDP growth was 3.2%, below expectations, contributing to a full-year expansion of 2.5%. The Bank of Thailand reduced its key interest rate by 25 basis points to 2.00% on 26 February, responding to weak growth and global trade risks, though it signalled limited scope for further cuts. The government seeks over 4% export growth, with Thailand’s Finance Minister suggesting a weaker baht could support this goal. The central bank now forecasts GDP growth slightly above 2.5% for 2025, revising down from its 2.9% December estimate. The government remains focused on increasing domestic consumption after previous cash handouts were partially used for loan repayments.

THAILAND
Thai Baht gains approximately 1.2% against US Dollar in 2025 driven by gold trading 
(11 March 2025) The Thai baht has gained approximately 1.2% against the US dollar this year, driven by Thailand’s role as a gold-trading hub amid record-high gold prices. The baht’s five-year correlation coefficient with gold stands at 0.57, indicating a stronger link compared to most emerging market currencies. However, strategists expect downward pressure due to Thailand’s 2% policy rate, which is 250 basis points below the upper bound of the US federal funds rate, and potential reciprocal tariffs from the US. The baht declined 0.3% to 33.89 per dollar on Tuesday, with Goldman Sachs forecasting a depreciation to 35 in three months and 36 within a year. Bank of America also sees downside risks. RBC Capital Markets projects the baht trading within a range of 32 to 37 this year, depending on Thailand’s economic outlook and exposure to tariffs. 

INDONESIA
Government mulling increasing royalty rates on mining sector
(10 March 2025) Indonesia’s government is considering increasing royalty rates on coal, nickel, copper, and other minerals as part of a broader fiscal adjustment to support President Prabowo Subianto’s spending plans. The proposal, outlined in a public consultation document, includes progressive royalty rates for nickel and copper based on price levels. Nickel ore royalties would rise from a flat 10% to a range of 14%–19%, while copper ore royalties would increase from 5% to 10%–17%, with similar hikes for copper concentrate and copper cathode. Coal royalties would rise by one percentage point to a maximum of 13.5% when benchmark prices reach at least USD 90 per metric ton. The government already applies a progressive coal royalty system, with rates starting at 8% for lower-calorific coal when prices exceed USD 90 per ton. Additional royalty increases are proposed for nickel matte, ferronickel, tin, gold, silver, and platinum.

INDONESIA
Indonesia to construct multiple oil refineries across several islands
(11 March 2025) Indonesia will construct multiple oil refineries across several islands, including Kalimantan and Sulawesi, with a total capacity of one million barrels per day (bpd), doubling the previously planned 500,000 bpd refinery, according to Indonesia’s Energy Minister. The decision follows a meeting with President Prabowo Subianto and aligns with the government’s strategy to accelerate 21 resource-processing projects worth USD 40 billion. Indonesia currently imports approximately one million bpd of crude oil and fuel to meet domestic demand. In addition to refining capacity expansion, the government plans to build oil storage facilities with a total capacity of one million barrels to enhance energy security.

VIET NAM, SINGAPORE
Singapore and Viet Nam elevate relationship to Comprehensive Strategic Partnership (CSP)
(13 March 2025) Singapore and Viet Nam have elevated their relationship to a Comprehensive Strategic Partnership (CSP), marking Singapore’s first such agreement with an ASEAN member state. Prime Minister Lawrence Wong stated the CSP will drive digital and green growth while supporting the ASEAN Digital Economy Framework Agreement and ASEAN Power Grid. Several Memoranda of Understanding (MoUs) were signed, including one between Singapore’s Digital Development and Information Ministry and Viet Nam’s Public Security Ministry on government data policies and cross-border data flows. An agreement between Singapore’s Home Affairs Ministry and Viet Nam’s Public Security Ministry was also enhanced to address transnational crime, including drug trafficking, cybercrime, and online scams. The leaders endorsed a joint report on offshore wind power trade, facilitating regulatory approvals for Sembcorp and PetroVietnam’s wind energy project. Financial cooperation will deepen through upgraded MoUs between the Monetary Authority of Singapore (MAS) and the State Bank of Viet Nam, promoting payment connectivity and FinTech operations. MAS and Viet Nam’s State Securities Commission will also collaborate on regulatory frameworks for capital markets and digital assets. In a joint statement, the leaders reaffirmed ASEAN’s position on the South China Sea, emphasising peace, security, and freedom of navigation.

SINGAPORE
Money-market rates decline despite central bank’s easing monetary policy
(14 March 2025) Singapore’s money-market rates have declined despite the Monetary Authority of Singapore (MAS) easing monetary policy in January for the first time in nearly five years. The Singapore Overnight Rate Average (SORA) dropped to 2.08% this week, the lowest since 2022, due to slower lending, foreign inflows into fixed deposits, and a resilient currency. The expected rise in interest rates following policy easing has not materialised, partly because the Singapore dollar has outperformed most Asian currencies. The loan-to-deposit ratio declined from 70.5% at the end of 2023 to 68.2% in January. The Oversea-Chinese Banking Corp. attributed the liquidity surplus to investor expectations of currency appreciation despite MAS’s earlier policy shift. MAS has warned of downside risks to growth, but authorities may resist a prolonged drop in interest rates to avoid undermining property market cooling measures. Meanwhile, improved liquidity has supported strong demand for sovereign bonds, with the 26 February sale of 2035 bonds achieving a bid-to-cover ratio of 2.03, the highest for a 10-year tenor since July 2022.

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.

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.

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.