Google Cloud appoints Mark Micallef to lead Southeast Asia business and advance regional AI momentum

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Will report to Karan Bajwa, VP, Asia Pacific 
Tasked to drive regional strategy, direction & overall revenue performance

Google Cloud announced the appointment of Mark Micallef as managing director of its business in Southeast Asia. 
In his new capacity, Micallef will be responsible for driving regional strategy, direction, team development, and overall revenue performance…Continue Reading

CARSOME raises undisclosed funding round, emphasises its US0mil liquidity position

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Mostly existing investors with new investor, EvolutionX Debt, a SG based debt fund
Claims independent biz units have hit profitability with over 30% revenue growth

CARSOME Group announced the closing of its latest fundraising round yesterday, without disclosing the amount raised, but shared that the funding has brought its current liquidity to approximately US$200 million (RM927.9 million).
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Proposed special economic zone could strengthen special Singapore – Malaysia ties

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It takes five minutes for Emily Ma to leave the country. 

Perched on a long bench in Singapore’s Woodlands Station, the slight elegant retiree doesn’t seem in a rush. The close links between her home country and neighbouring Malaysia allows her to build a base across both sides of the border. 

A shuttle train leaves 13 times a day from Singapore’s Woodlands station and arrives in the Malaysian city of Johor Bahru just five minutes later. A bus takes one hour, and non-residents are currently allowed to stay in each country for up to 30 days without a visa.

“I go for a holiday, to see friends, or just to relax,” Ma said. “These links are important because [Singapore and Malaysia] used to be one family. In a way, we still are one family.”

Once part of the same country, these neighbours remain close trading partners with increasingly intertwined economies. As ASEAN states deepen their connections through schemes like the bloc’s Single Window customs programme and cross-border QR payments arranged through central bank collaborations, Malaysia and Singapore may soon draw even closer together with a transnational special economic zone between the city-state and the state of Johor 

The combined GDP of their two intertwined economies is already predicted to exceed $1 trillion within the next five years, more than a quarter of the total ASEAN bloc. The special zone is still in tentative stages, first proposed unofficially by Malaysia’s Economic Minister Rafizi Ramli in May, but could mark a significant step in the countries’ integration. 

Rafizi Ramli, Malaysia’s economic minister, has spoken about the potential of an economic zone between the two countries. Photo: Saeed Khan/AFP

While details of what such a collaboration would entail remain scarce there are plans to raise it at an upcoming Malaysian Cabinet meeting before bringing it to the annual meeting of a Malaysia-Singapore joint committee for economic cooperation, expected to be held in mid-July.

“Malaysia and Singapore enjoy strong ties in terms of trade and investment flows, tourism and labour movement,” said M. Niaz Asadullah, a professor of development economics at Monash University Malaysia. “But there is untapped potential for mutual economic gains if Singapore can leverage its close proximity to natural resources rich Malaysia.”

Thousands of Singaporeans cross into Malaysia every day by the 1,056-kilometre rail and motorway causeway that has linked the two over the Johor Strait since 1924. Bus fare for the crossing starts from about $1.48 (SGD 2).

The convenience of travel has created a longstanding symbiotic exchange of labour, trade and people between the two regions. As of 2014, it was estimated that about 5,000 Singaporeans live and work in Johor Bahru. The ringgit’s recent depreciation against the comparatively stable Singaporean dollar has made the cost of living in the Malaysian region comfortable compared to the expensive city-state. 

But while more casual travel is a breeze, the closeness for commercial purposes is still marred by long queues, traffic bottlenecks and customs checks. Recent complaints reveal some Singaporean bus passengers spent up to seven hours waiting at the Johor-Bahru customs checkpoint, a delay a special economic zone could ease.  

Motorists coming from Malaysia’s state of Johor form a queue as they approach the immigration checkpoint to enter in Singapore on 31 March, 2023. Photo: Roslan Rahman/AFP

Strengthening inter-ASEAN ties

The announcement of the proposed region comes as part of a concerted push by Malaysian Prime Minister Anwar Ibrahim to strengthen his country’s inter-ASEAN ties and reduce reliance on Western economies. 

As its closest neighbour, the city-state is a regional economic hub and a natural trading target for Malaysia. 

The two countries have deep historical connections – Singapore was originally part of the Federation of Malaya after the two countries achieved independence from the U.K. but split in 1965. A January meeting with Singaporean leaders secured $4 billion in foreign direct investment from the Lion City. 

“[Anwar’s] latest effort to renew bilateral ties with Singapore could be motivated by … a ‘look 

East’ philosophy,” said Asadullah. “By strengthening economic ties with Singapore, this can help Malaysia accelerate its transition to a high income nation status by 2028.”

For its part, Singapore benefits from the resources and labour available in the Malaysian state, with many Singaporean companies already choosing to locate their assembly and production lines in Johor.

People board a bus in Singapore on 29 November, 2021, under the vaccinated travel lane (VTL) for border-crossing passengers to Malaysia’s southern state of Johor. Photo: Roslan Rahman/AFP

Johor: a cornerstone of trade

Johor’s role as a cornerstone in the regional trade between Singapore and Malaysia has been a longstanding part of both countries’ economic history. In 1988, the border state announced a policy ‘twinning’ with Singapore that led to a 200% increase in investment from its neighbour that same year. 

Since then, the relationship between the two has only deepened – especially amidst broader economic recovery efforts after two years of pandemic-related border issues. 

“The two-year Singapore lockdown really had an impact on Johor,” said James Chin, professor of Asian studies at the University of Tasmania. “Now people are really looking for new impetus to push this Johor-Singapore growth triangle.”

Another motivating factor of this deepening network of economic relations would be renewable energy, as announced by minister Ramli.

This follows a May announcement to lift a Malaysian ban on renewable energy exports, part of the government’s ambitious aims to double renewable energy capacity by 2050. But the country’s renewable energy sector is still nascent, with coal and natural gas currently meeting 75% of Malaysia’s power demands. 

Over the border, Singapore is also trying to boost its renewables with limited success. Experts believe a symbiotic partnership between the neighbours could unlock new potential for both.

“The limited land area is a big challenge for Singapore to develop large-scale renewable energy projects,” explained Kim Jeong Won, research fellow at Energy Studies Institute of National University of Singapore. “Importing renewable electricity through regional power grids can help Singapore’s energy transition and the deployment of low-carbon solutions in the region.”

Professor Asadullah also hopes the new proposed economic region will help meet growing regional demand for energy while encouraging a mutually beneficial trade between Malaysia and Singapore.

“Land and natural resource-poor Singapore is particularly keen to develop a sustainable pan-ASEAN power grid,” she said. “This will not only pave the way for greater bilateral trade in clean energy, it’ll also encourage FDI from Singapore into Malaysia’s renewable energy sector … and overall development of green infrastructure.”

Smoother trade and transactions

The practicalities of how the two countries’ different economies, currencies and markets would interact could raise hurdles to seamless trade within the region. For Asadullah, the success of the economic region would rely on lowering cross-border transaction costs and harmonising labour and environmental standards. 

Singapore and Malaysia’s central banks have linked their countries’ smartphone QR systems to facilitate cross-border financial transactions.

“The key challenge is to coordinate the necessary institutional reforms,” said Natalya Ischenko, CEO of Robocash Group, an international financial lending platform, adding that the effects of the QR developments should be “significantly manifested” in the coming year. 

She estimated that cross-border QR payment systems could facilitate trade between the two countries of at least 0.5% and e-commerce in Singapore by at least 2% a month.

“[If so], the foreign trade between Singapore and Malaysia will be between $136.9 billion and $147.3 billion by the end of 2024,” she said. 

For Chin, the latest proposed economic tie is a continuation of a history of two countries linked by politics, geography and ambitious economic goals. 

“Of course this is good for the region. It is a win-win situation,” he said. “[But] the way to understand the economic relations between Johor and Singapore is that they are tied to each other. Whether they like each other or not, it really doesn’t matter, they have to work together for prosperity.”

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TerraUSD: South Korea ‘cryptocrash king’ Do Kwon jailed

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South Korean cryptocurrency entrepreneur, co-founder of Terraform Labs, Do Kwon, is taken to court in Podgorica, Montenegro on 16 June, 2023.Getty Images
By Peter Hoskins
Business reporter

Do Kwon, the cryptocurrency boss behind the $40bn (£31.3bn) collapse of the terraUSD and Luna tokens, has been sentenced to four months of jail in Montenegro.

Mr Kwon was found guilty of forging official documents.

He was arrested in March as he tried to board a flight to Dubai at Podgorica Airport, in the country’s capital.

Mr Kwon also faces charges in the US and South Korea over the collapse of the two digital tokens last year.

The former finance officer of Mr Kwon’s company Terraform Labs, Han Chang-joon, was also sentenced to four months in prison after being found guilty of the same charges.

Mr Kwon and Mr Han pleaded not guilty at their first court hearing in May.

The sentences will include the time that Mr Kwon and Mr Han have already spent in detention after being arrested in March, the court said in a statement.

They will also be able to appeal the verdict within eight days of receiving written notification from the court.

In February, US regulators charged Mr Kwon and his company Terraform Labs with “orchestrating a multi-billion dollar crypto asset securities fraud”.

“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD,” US Securities and Exchange Commission (SEC) chairman Gary Gensler said in a statement.

Last year, a South Korean court issued arrest warrants for Mr Kwon and five other individuals connected to the case.

Prosecutors said they believed that Terraform Labs, which is registered in Singapore, had violated capital market rules.

Montenegro does not have extradition treaties with the US or South Korea.

The collapse of the terraUSD stablecoin and the associated Luna token rocked cryptocurrency markets in May 2022.

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Commentary: If the 21st century is to be Asia’s century, more attention must be paid to rural communities

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Farmers, smallholders, and peasants are at risk due to droughts, lack of land, changes in commodity prices, and difficulties bringing their produce to markets.

Small-scale fishers need to grapple with higher food and fuel prices, higher ocean temperatures and the continuation of large-scale fishing operations depleting the world’s fish stocks. Efforts to find alternative income sources have been initiated, yet it remains challenging to achieve long-term success. 

In the Philippines, the government has promoted cultivating seaweed to reduce overfishing and expand incomes. It has worked in islands like Southern Mindanao and Palawan, but not everywhere. In areas where seaweed is not thriving, people eventually return to fishing and find jobs elsewhere. 

Another trend is increasing inequality within rural communities. Some fishing boat owners and landowners can increase their assets rapidly while the poorer fishers and farmers are sometimes forced to sell boats or land to make ends meet.

Again, family members consider migration to the city as a solution, but often get stranded in dire circumstances. If educational attainment is low, temporary migrants end up having insecure jobs in the informal economy.

These insights, as well as related observations from Thailand and India demonstrate that despite the ongoing process of urbanisation, poverty reduction and responding to climate change cannot be solved without a proper focus on rural communities. 

If more isn’t done, rural hardships will eventually perpetuate overburdened cities, youth unemployment, and urban poverty.

Dr Edo Andriesse is a Professor in the Department of Geography at Seoul National University.

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China, US resume talks but ‘de-risking’ lingers

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China and the United States have agreed to increase both official and unofficial dialogues after US Secretary of State Antony Blinken ended a two-day visit to China on Monday.

Blinken, whose Beijing trip was postponed due to the Chinese spy balloon incident in early January, finally met with Chinese President Xi Jinping after having a five-hour meeting with Foreign Minister Qin Gang on Sunday and another meeting with top diplomat Wang Yi on Monday. 

Both the Chinese and US sides described the Qin-Blinken talks as candid, in-depth and constructive.

China said the two countries will push forward top-level official dialogues, including Qin’s and Wang’s coming visits to the US, and also work-level communications. They said both nations will increase the number of direct flights between them and encourage humanities, educational and academic exchanges between their people.

During their meeting, Wang told Blinken that the US must stop hyping “the China threat theory,” cancel unilateral sanctions against China, give up suppressing China’s technological development and stop interfering in China’s internal affairs.

An article pulished by the state-owned Defense Times said all the four demands made by Wang were rejected by Blinken. 

Chinese academics and commentators said that, as it’s unlikely that the US will ease its stance on technology ban and Taiwan matters within the short run, the only way to reboot the Sino-US relations is through unofficial exchanges. 

At the end of his trip, Blinken told the media that both sides agreed to set up a working group to address the issue related to China’s export of fentanyl precursor chemicals to the US. He also said he believes China can play a role to alleviate the risk of global food shortage by helping push forward a long-term Black Sea grain agreement. 

He added that he had told his Chinese counterparts that what the US means by “de-risking” is hugely different from “de-coupling.” 

He said the US has no intention to decouple from China as many American firms still want to do business with the country but the US government will continue to prevent its technologies from being used against the American people – for example, in making hypersonic weapons or in human rights abuses.

He said both sides discussed the Ukraine war. He said Washington did not see any evidence that China has sent lethal weapons to Russia but he has urged Beijing officials to stay vigilant that some Chinese private companies are selling their products to Russia for military use.

He reiterated that the US does not support Taiwan independence but will make sure that the island can protect itself. He said more US officials will visit China in the coming weeks.

Five ‘noes’

In November 2021, US President Joe Biden told Xi that the US will not seek a new Cold War with Beijing nor change the Chinese political system nor target China with revitalized US alliances nor support Taiwan independence nor seek conflict with the Chinese. 

Beijing later called these “five noes.” It said Biden reiterated that the US would follow the “five noes” principle during his face-to-face meeting with Xi in Bali last November.

However, Beijing expressed serious discontent as Washington kept sanctioning Chinese companies, selling arms to Taiwan and persuading its allies to impose export bans against China. The Sino-US tensions grew further after a Chinese spy balloon was seen in American airspace in late January and US House Speaker and Taiwan President Tsai Ing-wen met in California in April.

“The Chinese side has made our position clear, and the two sides have agreed to follow through the common understandings President Biden and I had reached in Bali,” Xi said in his opening speech when meeting with Blinken on Monday. “The two sides have also made progress and reached agreements on some specific issues. This is very good.” 

“State-to-state interactions should always be based on mutual respect and sincerity. I hope that through this visit, you will make more positive contributions to stabilising China-US relations,” Xi said.  

He said major-country competition does not represent the trend of the times, still less can it solve America’s own problems or the challenges facing the world. He said China respects US interests and does not seek to challenge or displace the US but at the same time hopes that the US respects China and not to hurt China’s legitimate rights and interests. 

He said China always hopes to see a sound and steady China-US relationship and believes that the two major countries can overcome various difficulties and find the right way to get along based on mutual respect, peaceful coexistence and win-win cooperation. He also called on the US side to adopt a rational and pragmatic attitude and work with China in the same direction.

Prior to this, China’s Foreign Ministry has said that Biden over-reacted in the Chinese balloon incident as he ordered the shootdown of the balloon. Just before Blinken’s China trip, Biden said the incident “was more embarrassing than it was intentional.” 

“China has some legitimate difficulties unrelated to the US, and I think one of the things that balloon caused was not so much that it got shot down, but I don’t think the leadership knew where it was, knew what it was in it, and what was going on,” he said Saturday.

“I’m hoping over the next several months, I’ll be meeting with Xi again and talking about legitimate differences we have but also how there are areas we can get along,” he said.

Taiwan matters

During their meeting in Beijing on Sunday, Qin told Blinken that the Taiwan question is the core of China’s core interests, the most consequential issue and the most pronounced risk in the China-US relationship. He said the US should abide by the one-China principle and the three China-US joint communiqués, and truly deliver on its commitment of not supporting Taiwan independence. 

According to a statement published by Beijing after the meeting, China and the US agreed to keep moving forward consultations on the guiding principles of their relations. Both sides agreed to continue advancing consultations through the joint working group to address specific issues in the relations. 

In fact, Biden and Xi had already discussed these two topics in Bali last November.

Sun Chenghao, an associate researcher at the Center for International Security and Strategy (CISS) at Tsinghua University, said in an article at that time that the US and China had maintained a stable relationship for several decades after they announced the Three Joint Communiqués between 1972 and 1982. Sun said the two countries can consider drafting the fourth ones to clearly define long term Sino-US relations.

“These two agreements only mean that the both sides will continue to meet and talk,” a Zhejiang-based columnist writes in an article posted Monday. “China definitely knows how serious the Taiwan matters are, but it’s unclear whether the US really understands them.”

He says the most concrete achievements in the Qin-Blinken meeting is that both sides agreed to encourage more people-to-people and educational exchanges. He says it is easier to boost unofficial exchanges and the number of flights than to resolve political problems. 

“As the US side has repeatedly failed to meet its promises, it is unclear how conflicts between the US and China can still be resolved by official dialogues,” Yuan Zhou, a military and political columnist, writes in an article. “The agreement about encouraging unofficial exchanges can be a way out.”

Yuan says top executives of Tesla, JP Morgan and Microsoft have recently visited China, showing that there is a strong foundation to rebuild Sino-US relations and reduce political conflicts.

Chen Feng, a columnist at Guancha.cn, says US firms such as Boeing, Nvidia, Ford and Tesla cannot afford to leave the huge Chinese markets. 

He predicts that with in view of all their investments, European countries will not join the US to sanction China and then the US will fail to maintain a strong alliance with Australia, Japan and the United Kingdom. He says this is a good way for China to break the United States’ technology blockage. 

Read: Tech giants ‘de-risk’ from China, but selectively

Read: China, US move closer to high-level official talks

Follow Jeff Pao on Twitter at @jeffpao3

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MITI and the United Nations launch Malaysia SDG Investor Map

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15 Investment Opportunity Areas identified, with information on indicative returns
Serves as market intelligence for investors seeking SDG-aligned opportunities

The Ministry of Investment, Trade and Industry (MITI) and the United Nations (UN) in Malaysia has launched an online market intelligence tool called the Malaysia SDG Investor Map to help private investors find investment…Continue Reading

US is losing Asia’s multilateral trade game

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Digital trade has reduced the costs of engaging in international trade, facilitated the coordination of global value chains and connected a greater number of businesses and consumers globally. 

Digital technologies will undoubtedly create new products, services, markets and opportunities for business development. The United States and China have sought to capitalize on this growth potential, albeit with varying levels of success.

Digital economy contributes to more than 15% of global GDP according to the World Bank — much of this comes from digital trade, which spans from the trade of technological goods to digitally-enabled services.

Recently, approaches to digital trade are diversifying, especially in China and the United States. Both have increased their influence in digital transformation through various economic frameworks, including the Regional Comprehensive Economic Partnership (RCEP) and the Indo-Pacific Economic Framework for Prosperity (IPEF). 

RCEP is a thorough trade agreement that goes beyond trade liberalization, including digital trade. The IPEF is also a substantial economic partnership that covers diverse sectors such as digital trade.

The IPEF was initiated by the United States on May 23, 2022, inviting Australia, Brunei Darussalam, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam to join the framework. The IPEF aims to define shared objectives around four pillars — trade, supply chains, clean economy and fair economy.

The trade pillar highlights the urgency of digital trade cooperation and aims to promote an inclusive digital economy by increasing access to the internet and information, facilitating digital trade, resolving discriminatory practices and enhancing the security and resiliency of digital infrastructure.

Joe Biden’s Indo-Pacific Economic Framework aims to counterbalance China’s rising power and influence in Southeast Asia. Image: Facebook

Through the IPEF, the United States differentiates itself from China’s data sovereignty approach by encouraging free and open data flow. The IPEF seeks to reduce localization requirements and limitations on cross-border data flows to promote more open digital trade. 

The IPEF further affirms its commitment to supporting reliable cross-border data flows, an inclusive digital economy with sustainable growth and responsible utilization of emerging technologies — it is more extensive than RCEP.

By contrast, as the largest trading bloc, RCEP offers tariff adjustments, dispute settlement mechanisms and trade remedies that induce better cooperation and commitment to achieve common objectives. All ASEAN members and five external partners — Australia, China, Japan, South Korea and New Zealand — have signed it.

RCEP addresses digital trade as electronic commerce, referencing trade in traditional commodities delivered with the assistance of digital technologies. 

RCEP will create digital economy opportunities by promoting cooperation in research and training activities, capacity building and empowering small and medium-sized enterprises to utilize e-commerce platforms. 

This is an important benefit as digital trade is relatively new in the global trade regime and most RCEP members need different levels of assistance for digital transformation. China plays a significant role in influencing the digital economy system for RCEP members. Its digital economy model has become the leader in the Indo-Pacific region. 

Several major Chinese companies — including WeChat and Alipay — have pioneered cross-border payments and developed practices that others can emulate. China’s digital economy has also produced many business opportunities.

By asserting its influence in RCEP, China is expected to contribute to the revitalization of the digital trade regime in the Indo-Pacific region. Because of China’s growing influence, the IPEF may have been created because of the Biden administration’s concern about its weakening influence in Asia, rather than because of economic considerations.

RCEP comes with a take-it-or-leave-it approach which obliges member states to comply with provisions outlined in the agreement. But in implementing e-commerce provisions, RCEP respects the national interests of member states to determine appropriate measures that suit their circumstances.

In contrast, the IPEF adopts a flexible approach that allows member states to opt out from any pillar they are not interested in, exemplified by India’s refusal to join Pillar 1 focused on trade. This renders some commitments of the framework unexecuted. 

If there is no guarantee that domestic reforms will be implemented equally, member states will be reluctant to initiate reformative steps, resulting in ineffective partnerships. The lack of economic incentives — including tariff adjustments — reduce the framework’s appeal to member states.

Indian Prime Minister Narendra Modi talks to then-Chinese Premier Li Keqiang (center) and Thai Prime Minister Prayut Chan-ocha during the third RCEP Summit in Bangkok on November 4, 2019, on the sidelines of the 35th ASEAN Summit. Photo: AFP / Manan Vatsyayana

Regarding compliance mechanisms, RCEP members can resort to trade remedies and dispute settlement mechanisms. But RCEP’s e-commerce chapter does not fall under the jurisdiction of its dispute settlement mechanisms, making any disputes over interpretation and implementation subject to good faith negotiation. 

RCEP’s upcoming five-yearly general review allows member states to re-evaluate whether these dispute mechanisms should apply to e-commerce-related disputes.

Yet the absence of dispute settlement mechanisms or other trade remedies in the IPEF signifies its unenforceability. It is undecided whether the IPEF will adopt a binding dispute settlement mechanism or any trade remedies. 

The IPEF does not offer tariff adjustments or traditional market access commitments, creating hesitation about whether the provisions will be enforceable. Trade agreements tend to be ineffective without retaliatory tariff measures as a deterrent — the absence of these aspects will only make it difficult for the IPEF to achieve its objectives.

The United States needs to put in more effort to counter China’s regional influence as the IPEF has not offered viable benefits such as tariff adjustments, mutual market access, capacity building and technical assistance in developing digital trade frameworks — all are present in RCEP. 

The IPEF should discuss trade liberalization, compliance mechanisms and tangible incentives to become a prominent economic framework.

Ulfah Aulia is a research assistant at the Economic Research Institute for ASEAN and East Asia (ERIA) based in Jakarta. Sheila Alifia is a non-affiliated researcher based in Jakarta.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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Govt to promote new silk products for export

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Thailand is planning to promote premium silk products to target young buyers in Japan, South Korea and Italy, government spokesman Anucha Burapachaisri said on Saturday.

He said the aim of the Thailand Textile Institute’s Premium Thai Silk project is to introduce newly designed silk products to export markets. He said Prime Minister Prayut Chan-o-cha is confident the quality of Thai silk fabrics will boost the country’s soft power standing in the textile market.

Since the government began promoting Thai silk with new designs among domestic buyers in 2019, there have been 112 new Ikat silk and over 108 new products, including clothes, bags, shoes and accessories, he said.

The products brought 6.6 million baht to 1,618 silk entrepreneurs in the Northeast, Mr Anucha said, with some eyed for the export market.

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