February 7, 2025 • 8 mins
In this episode, Michelle welcomes listeners and provides an overview of the top stories affecting Southeast Asia's economic landscape. The episode begins with an analysis of the implications of US import tariffs on Indonesia-China trade relations, highlighting the potential impact on regional trade dynamics. Michelle then explores investment opportunities and economic challenges in Indonesia and Singapore, offering insights into market conditions and growth prospects. The discussion shifts to Thailand's ambitions in the semiconductor industry, examining the country's strategies and potential for success. The episode wraps up with closing remarks and a call to action, encouraging listeners to stay engaged with Southeast Asia's evolving economic developments.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, Bank Indonesia warns that the Indonesianmarket might be flooded with Chinese products
due to the United States import tariff policy.
Second, Singapore anticipates that 'economicnationalism' could dampen investment flows.
(00:25):
Third, Thailand is making a strategic push tobecome a global semiconductor hub with
promising news and statistics.
Today, we're diving into the first storyconcerning the potential impact of United
States import tariffs on the Indonesian market.
The Director of the Bank Indonesia Departmentof Economic Policy and Monetary, Budi Winantya,
(00:46):
has voiced concerns about the possiblerepercussions of the United States' import
tariff policy on the Indonesian economy.
While the policy does not directly targetIndonesia, the ripple effects could be
significant if China's economy, as a majortarget of these tariffs, experiences a
downturn.
(01:07):
China is a key trading partner for Indonesia,and any weakening in China's economy could
threaten Indonesia's export performance.
This is due to the interconnected nature oftheir trade relationships, where a slowdown in
China's economic growth could lead to areduction in demand for Indonesian exports.
(01:27):
Budi Winantya highlighted these risks during arecent Media Training event at the Bank
Indonesia Banda Aceh Representative Office,emphasizing that what happens in China
inevitably impacts Indonesia.
Moreover, there's a concern that the Indonesianmarket might become inundated with Chinese
products.
With the United States imposing higher importtariffs on Chinese goods, these products may
(01:52):
seek alternative markets, such as Indonesia, tooffset losses.
This influx could pose a risk to localindustries, as they might struggle to compete
with the increased availability of Chinesegoods.
However, Budi Winantya also pointed out thatthis situation presents an opportunity for
Indonesia to increase its export volume byfilling the market gaps left by China.
(02:14):
In terms of investment, Indonesia could see aninflow from companies looking to relocate their
operations away from China due to the tariffs.
This mirrors the trend observed in 2017-2018,where similar tariffs prompted many companies
to move their operations from China to otherSoutheast Asian countries like Vietnam.
(02:34):
Indonesia could potentially benefit from thisshift as businesses seek new locations to
mitigate the impacts of the tariffs.
Overall, while the United States import tariffpolicy presents certain risks, it also opens up
opportunities for Indonesia to strengthen itsexport markets and attract new investments.
The situation underscores the importance ofstrategic economic planning and adaptability in
(02:58):
the face of global trade challenges.
Moving on to our next story, Singapore'sEconomic Development Board is preparing for
what it terms as "significant headwinds" due toglobal uncertainties and rising protectionism,
particularly from policies like those underformer United States President Donald Trump.
(03:19):
This kind of economic nationalism is expectedto make investment flows into Singapore more
volatile this year.
Jacqueline Poh, the Managing Director ofSingapore's Economic Development Board,
highlighted during a recent news conferencethat the city-state is likely to experience
fluctuations in investment pledges.
Companies are taking longer to make investmentdecisions as they navigate the complexities
(03:42):
introduced by protectionist policies, whichhave become more pronounced globally.
The Economic Development Board is keenly awareof these challenges and is actively seeking to
diversify Singapore's industries and sources ofinvestment.
This strategic diversification is aimed atmitigating the risks posed by potential
declines in foreign direct investments, whichare crucial for Singapore's economic health.
(04:08):
This situation underscores a broader trend ofcountries around the world grappling with
economic nationalism.
As nations prioritize self-sufficiency andprotection of local industries, smaller
economies like Singapore must adapt quickly toavoid being adversely affected.
The challenge lies in maintaining an openeconomy while also ensuring that the country
(04:30):
remains attractive to investors amidst ashifting global landscape.
As part of its strategy, Singapore is not onlyfocusing on diversifying its investment sources
but also on enhancing its value proposition inhigh-growth sectors.
These include technology, innovation, andsustainable industries, where Singapore can
(04:51):
leverage its strong infrastructure andbusiness-friendly environment to attract global
players.
In this context, the Economic DevelopmentBoard's efforts to attract investments are not
just about navigating current headwinds butalso about positioning Singapore for future
growth.
By fostering a robust ecosystem for innovationand digital transformation, Singapore aims to
(05:14):
remain a leading hub in Southeast Asia forcutting-edge industries.
The board's proactive approach highlights theimportance of adaptability and foresight in
economic planning.
As global trade dynamics continue to evolve,Singapore's ability to pivot and capitalize on
emerging opportunities will be key tosustaining its economic momentum in the years
(05:36):
to come.
Finally, let's shift our focus to Thailand andits ambitious plans to become a global
semiconductor hub.
As reported by IndexBox Market Intelligence,Thailand is accelerating its efforts to
position itself strategically amid the ongoingtrade tensions between the United States and
(05:56):
China.
The country is drafting a strategic roadmap toenhance its semiconductor sector within the
next ninety days.
This initiative reflects Thailand's commitmentto capturing a significant share of the global
semiconductor market.
Notably, in 2024, the value of inboundinvestment applications in Thailand surged by
(06:18):
thirty-five percent, reaching a record 1.14trillion baht, equivalent to thirty-three point
five billion dollars.
Thailand's focus is on attracting around fivehundred billion baht in new semiconductor
investments by 2029.
This effort targets key areas such as powerelectronics used in electric vehicles, data
(06:39):
centers, and energy storage systems.
Such investments are crucial as the globaldemand for semiconductors continues to rise,
driven by advancements in technology anddigital transformation.
According to IndexBox data, Thailand'selectronic chip export value in 2023 was eight
point nine billion dollars, while imports stoodhigher at fourteen point nine billion dollars.
(07:04):
Key export destinations included Hong KongSpecial Administrative Region, Singapore, and
Japan, while major import partners were Taiwan,China, and Malaysia.
Thailand ranks second among emerging economiesfor semiconductor manufacturing, just behind
India.
With major players like Analog Devices, Sony,Toshiba, Infineon, and entities from Foxsemicon
(07:28):
Integrated Technology already present, Thailandis positioning itself as a neutral and
attractive location for investors amidst globaltrade conflicts.
This strategic push underscores Thailand'spotential to become a pivotal player in the
semiconductor industry.
By fostering an environment conducive toinnovation and investment, Thailand aims to not
(07:50):
only boost its economic growth but alsostrengthen its position in the global supply
chain.
As Thailand continues to build itssemiconductor capabilities, the country is
poised to benefit from the shifting dynamics ofglobal trade and technology.
By 2030, Thailand's semiconductor sector couldbe a key driver of its economy, supporting its
(08:11):
aspirations to be a leader in Southeast Asia'shigh-tech landscape.
Alright, that's a wrap for this episode.
If you enjoyed this brief, and would like tostay updated on latest episodes, don’t forget
to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, Bank Indonesia warns that the Indonesianmarket might be flooded with Chinese products
due to the United States import tariff policy.
Second, Singapore anticipates that 'economicnationalism' could dampen investment flows.
(00:25):
Third, Thailand is making a strategic push tobecome a global semiconductor hub with
promising news and statistics.
Today, we're diving into the first storyconcerning the potential impact of United
States import tariffs on the Indonesian market.
The Director of the Bank Indonesia Departmentof Economic Policy and Monetary, Budi Winantya,
(00:46):
has voiced concerns about the possiblerepercussions of the United States' import
tariff policy on the Indonesian economy.
While the policy does not directly targetIndonesia, the ripple effects could be
significant if China's economy, as a majortarget of these tariffs, experiences a
downturn.
(01:07):
China is a key trading partner for Indonesia,and any weakening in China's economy could
threaten Indonesia's export performance.
This is due to the interconnected nature oftheir trade relationships, where a slowdown in
China's economic growth could lead to areduction in demand for Indonesian exports.
(01:27):
Budi Winantya highlighted these risks during arecent Media Training event at the Bank
Indonesia Banda Aceh Representative Office,emphasizing that what happens in China
inevitably impacts Indonesia.
Moreover, there's a concern that the Indonesianmarket might become inundated with Chinese
products.
With the United States imposing higher importtariffs on Chinese goods, these products may
(01:52):
seek alternative markets, such as Indonesia, tooffset losses.
This influx could pose a risk to localindustries, as they might struggle to compete
with the increased availability of Chinesegoods.
However, Budi Winantya also pointed out thatthis situation presents an opportunity for
Indonesia to increase its export volume byfilling the market gaps left by China.
(02:14):
In terms of investment, Indonesia could see aninflow from companies looking to relocate their
operations away from China due to the tariffs.
This mirrors the trend observed in 2017-2018,where similar tariffs prompted many companies
to move their operations from China to otherSoutheast Asian countries like Vietnam.
(02:34):
Indonesia could potentially benefit from thisshift as businesses seek new locations to
mitigate the impacts of the tariffs.
Overall, while the United States import tariffpolicy presents certain risks, it also opens up
opportunities for Indonesia to strengthen itsexport markets and attract new investments.
The situation underscores the importance ofstrategic economic planning and adaptability in
(02:58):
the face of global trade challenges.
Moving on to our next story, Singapore'sEconomic Development Board is preparing for
what it terms as "significant headwinds" due toglobal uncertainties and rising protectionism,
particularly from policies like those underformer United States President Donald Trump.
(03:19):
This kind of economic nationalism is expectedto make investment flows into Singapore more
volatile this year.
Jacqueline Poh, the Managing Director ofSingapore's Economic Development Board,
highlighted during a recent news conferencethat the city-state is likely to experience
fluctuations in investment pledges.
Companies are taking longer to make investmentdecisions as they navigate the complexities
(03:42):
introduced by protectionist policies, whichhave become more pronounced globally.
The Economic Development Board is keenly awareof these challenges and is actively seeking to
diversify Singapore's industries and sources ofinvestment.
This strategic diversification is aimed atmitigating the risks posed by potential
declines in foreign direct investments, whichare crucial for Singapore's economic health.
(04:08):
This situation underscores a broader trend ofcountries around the world grappling with
economic nationalism.
As nations prioritize self-sufficiency andprotection of local industries, smaller
economies like Singapore must adapt quickly toavoid being adversely affected.
The challenge lies in maintaining an openeconomy while also ensuring that the country
(04:30):
remains attractive to investors amidst ashifting global landscape.
As part of its strategy, Singapore is not onlyfocusing on diversifying its investment sources
but also on enhancing its value proposition inhigh-growth sectors.
These include technology, innovation, andsustainable industries, where Singapore can
(04:51):
leverage its strong infrastructure andbusiness-friendly environment to attract global
players.
In this context, the Economic DevelopmentBoard's efforts to attract investments are not
just about navigating current headwinds butalso about positioning Singapore for future
growth.
By fostering a robust ecosystem for innovationand digital transformation, Singapore aims to
(05:14):
remain a leading hub in Southeast Asia forcutting-edge industries.
The board's proactive approach highlights theimportance of adaptability and foresight in
economic planning.
As global trade dynamics continue to evolve,Singapore's ability to pivot and capitalize on
emerging opportunities will be key tosustaining its economic momentum in the years
(05:36):
to come.
Finally, let's shift our focus to Thailand andits ambitious plans to become a global
semiconductor hub.
As reported by IndexBox Market Intelligence,Thailand is accelerating its efforts to
position itself strategically amid the ongoingtrade tensions between the United States and
(05:56):
China.
The country is drafting a strategic roadmap toenhance its semiconductor sector within the
next ninety days.
This initiative reflects Thailand's commitmentto capturing a significant share of the global
semiconductor market.
Notably, in 2024, the value of inboundinvestment applications in Thailand surged by
(06:18):
thirty-five percent, reaching a record 1.14trillion baht, equivalent to thirty-three point
five billion dollars.
Thailand's focus is on attracting around fivehundred billion baht in new semiconductor
investments by 2029.
This effort targets key areas such as powerelectronics used in electric vehicles, data
(06:39):
centers, and energy storage systems.
Such investments are crucial as the globaldemand for semiconductors continues to rise,
driven by advancements in technology anddigital transformation.
According to IndexBox data, Thailand'selectronic chip export value in 2023 was eight
point nine billion dollars, while imports stoodhigher at fourteen point nine billion dollars.
(07:04):
Key export destinations included Hong KongSpecial Administrative Region, Singapore, and
Japan, while major import partners were Taiwan,China, and Malaysia.
Thailand ranks second among emerging economiesfor semiconductor manufacturing, just behind
India.
With major players like Analog Devices, Sony,Toshiba, Infineon, and entities from Foxsemicon
(07:28):
Integrated Technology already present, Thailandis positioning itself as a neutral and
attractive location for investors amidst globaltrade conflicts.
This strategic push underscores Thailand'spotential to become a pivotal player in the
semiconductor industry.
By fostering an environment conducive toinnovation and investment, Thailand aims to not
(07:50):
only boost its economic growth but alsostrengthen its position in the global supply
chain.
As Thailand continues to build itssemiconductor capabilities, the country is
poised to benefit from the shifting dynamics ofglobal trade and technology.
By 2030, Thailand's semiconductor sector couldbe a key driver of its economy, supporting its
(08:11):
aspirations to be a leader in Southeast Asia'shigh-tech landscape.
Alright, that's a wrap for this episode.
If you enjoyed this brief, and would like tostay updated on latest episodes, don’t forget
to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
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