Beyond the yen, ringgit’s free fall the one to watch

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SINGAPORE – Malaysia’s central bank is under pressure to steady the flagging national currency, the ringgit, which in recent days fell to new multi-decade lows against the US greenback and neighboring Singapore dollar.

Analysts say Bank Negara Malaysia (BNM) now faces a trade-off between raising rates and stifling an already sagging domestic economy or posing risks to financial stability by failing to act. Malaysia’s offshore borrowings, widely denominated in US dollars, amounted to 30 billion ringgit ($6.2 billion) as of August 2023.

Like other emerging market currencies, the ringgit has depreciated this year against a strong US dollar. But the extent of the slide – now the worst performer in Asia after the Japanese yen – has, according to BNM Governor Abdul Rasheed Abdul Ghaffour, belied Malaysia’s otherwise strong economic fundamentals and resilient banking sector.

“We are not in a crisis. It is different from what we experienced in the past,” Abdul Rasheed told reporters earlier this week, referring to the 1997-98 Asian financial crisis when the ringgit hit a benchmark low of 4.88 ringgit to the US dollar in March 1998.

The currency has in recent days tumbled to its lowest levels since, slipping to 4.79 to the US dollar on October 23 and hovering at 4.77 at the time of publication.

The ringgit has dipped by approximately 8.64% to the US dollar so far this year. The currency also breached a record low of 3.48 against the Singapore dollar this week, while also trading lower against most other Asian currencies. Malaysia’s currency traded at 3.48 to the Singapore dollar at the time of publication, depreciating around 6.4% this year.

The BNM governor said recent ringgit fluctuations appear to be driven primarily by geopolitical events, wherein the US dollar has strengthened on safe-haven demand amid concerns about an escalation of the Israel-Hamas conflict into a wider regional war.

“It certainly does not reflect our economic fundamentals,” Abdul Rasheed said, pointing to Malaysia’s current account surplus and moderating inflation.

But seven straight months of decline in exports through September, due in part to weaker-than-expected demand in China, Malaysia’s largest trading partner, has weighed against the ringgit.

The local market, meanwhile, saw net portfolio outflows in the first half of 2023, with global funds reportedly selling off US$324 million of Malaysian stocks in October alone.  

“Besides the higher interest rates in the US, which attracted capital outflows from [Southeast Asian] economies as investors seek higher returns…. weaker prices for commodities such as palm oil and liquefied natural gas, which constitute a significant share of Malaysia’s exports, have also affected the country’s export earnings,” said Tan Wen Wei, Asia analyst at the Economist Intelligence Unit (EIU).

BNM paused hiking rates in July, holding its overnight policy rate (OPR) at a record 250 basis point discount relative to the upper bound of the US Federal Reserve funding rate. That widening rate differential has put Malaysia’s central bank on the horns of a policy dilemma given that narrowing the rate gap to stem outflows would require raising rates and hurting the local economy.

Governor Abdul Rasheed told an October 23 press conference that the central bank is committed to taking all necessary measures to maintain a “smooth and controlled adjustment of the ringgit.” He said the BNM possesses “an array of market measures” and is ready to support the sliding ringgit should the need arise, without elaborating on the conditions that could cause the central bank to intervene.

Analysts are of two minds about whether the BNM should raise the OPR to reduce the interest rate differential with the US or pursue other policy options, such as intervening in foreign exchange markets or even imposing capital controls as it did in 1998 at the height of the Asian financial crisis.

“The imposition of such controls [would] risk eroding investors’ confidence and the banking system is better capitalized right now as compared to the past… We do not think BNM will go down this route,” said Tan. “The most palatable option to the BNM will be foreign exchange intervention. This measure has temporary and limited impact, thus it is not sustainable for prolonged periods.”

Deputy Finance Minister Ahmad Maslan said earlier this week that raising the OPR, now at 3%, may no longer be “relevant” given that Malaysia’s headline inflation rate slowed to 1.9% year-on-year in September, marking the first time inflation was below 2% in nearly three years.

He assessed that the US federal funds rate (FFR), now at 5.5%, would likely remain elevated for an extended period as the Federal Reserve seeks to control inflation that, while far lower than a year ago, is proving difficult to tame. Analysts are split about whether the US Fed will raise interest rates at its upcoming October 31 to November 1 meeting.

“Even if the OPR is raised despite easing inflation in the economy, the positive effect on the ringgit will likely be overwhelmed by US rate hike expectations,” said Yeah Kim Leng, a senior fellow and director of the Economic Studies Program at the Jeffrey Cheah Institute on Southeast Asia at Malaysia’s Sunway University.

Malaysia's currency could come under pressure due to higher than previously disclosed public debt and a new expansionary budget. Photo: iStock
Malaysia’s currency is the second-worst performer in Asia so far this year. Photo: Asia Times Files / iStock

“Given that currencies under floating exchange rate regimes are prone to misalignments and overshooting, Malaysia’s economy is better off whereby policymakers continue to focus on strengthening the country’s underlying fundamentals. Meanwhile, BNM should continue its policy to smoothen adjustments but not determine the ringgit level or deplete its reserves in its defense.”

Malaysia’s government says 2023 gross domestic product (GDP) growth will come in at the low end of its 4% to 5% forecast after third-quarter growth rose by 3.3%, up from 2.9% in the previous quarter. The World Bank earlier this month revised down its full-year growth forecast for Malaysia to 3.9% from an earlier 4.3%, citing limited fiscal space as a key macroeconomic challenge.

Prime Minister Anwar Ibrahim tabled an expansionary 393.8 billion ringgit ($83.29 billion) budget, the nation’s largest-ever spending plan, on October 13. The plan will gradually cut subsidies on products like petrol, cooking oil and rice that the administration says have disproportionately benefited the rich. The government intends to shift away from blanket subsidies to a system that mainly aids lower-income earners.

“On the domestic front, the recent budget announcement to implement targeted subsidies for diesel and the removal of price caps for chicken and eggs will lead to higher inflationary pressures in the near term, reducing the real returns on investment,” said the EIU’s Tan. “Foreign investors may then seek higher returns elsewhere, and demand for the ringgit is reduced as a result.”

The EIU forecasts that BNM will maintain its OPR at 3% this year. “Tightening the OPR now will weigh further on economic growth, which we think is BNM’s priority now, given that inflation is under control,” said Tan, who added that China’s stronger-than-expected third-quarter GDP figure of 4.9% indicated that its economy may be stabilizing, which in turn could support Malaysia’s fourth quarter trade outlook.

Carmelo Ferlito, an economist and chief executive officer of Kuala Lumpur-based think tank Center for Market Education, argues monetary policy is “an ineffective tool” for firming up the ringgit, which he believes is falling mainly due to external factors. He suggests a consistently pro-market approach to domestic policy would be more effective to stem the currency’s slide.

“The most important factor is the abundance of conflicting messages from the policy perspective. We get commitment to fiscal discipline and yet the biggest budget ever. Price controls were removed only recently despite statements in favor of a pro-investment eco-system,” he said, pointing to pro-market stances amid policy hints of a bigger government role in the economy.

Analysts are mixed on whether the currency could breach the psychological five ringgit to the dollar mark amid prevailing headwinds and uncertainties. Sunway University’s Yeah said the risk of further depreciation cannot be ruled out given the possibility of further interest rate hikes by the US Fed to achieve its 2% inflation target.

US Federal Reserve Chairman Jerome Powell could raise US rates again later this month. Image: Screengrab / NDTV

“However, slowdown signs and fiscal and financial stresses are emerging in the US economy that suggests a reversal of interest rate uptrend and the dollar strength is imminent in the coming quarters. Malaysia may not see a breach of the psychological five ringgit to a dollar mark if the US economy deteriorates sooner than later,” he told Asia Times.

The EIU’s Tan agreed that a five ringgit per US dollar breach remains unlikely, owing to China’s economy showing signs of stabilization after a lackluster post-pandemic recovery. The research unit maintains its view that the US Fed will not raise interest rates further, assuming US inflation continues to ease and consumer demand softens in September-October.

“A potential slowdown in the US economy may also allow the Federal Reserve to pause and assess if a further rate hike is warranted,” Tan added. “All this is based on the assumption that the Israel-Gaza crisis remains contained. Any escalation into a regional conflict may lead to investors seeking the dollar as a safe-haven, putting further depreciatory pressure on the ringgit.”

 Follow Nile Bowie on Twitter at @NileBowie

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Clearer skies ahead for resilient Thai AirAsia

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Clearer skies ahead for resilient Thai AirAsia
Santisuk Klongchaiya, CEO of Thai AirAsia, said ‘our biggest lesson learned’ from the pandemic was to make the company healthy, with strong internal management, financial status and stakeholders.

Aviation was among the industries hit the hardest during the pandemic.

  • Best CEO in Resilient Leadership
  • Santisuk Klongchaiya, Chief Executive Officer of Thai AirAsia

Driven by pent-up travel demand after Thailand reopened its borders in 2022, the carriers that rebounded quickly were able to do so by maintaining sufficient resources, including pilots and crew, as well as their fleets, as was the case with Thai AirAsia.

Santisuk Klongchaiya has been chief executive of Thai AirAsia and SET-listed Asia Aviation (AAV) since 2018, leading the airline through the toughest time in aviation history by using “resilient leadership”.

His journey with Thai AirAsia began when he met Tony Fernandes and Tassapon Bijleveld at Warner Music. Mr Fernandes and Mr Bijleveld would later resign from Warner Music, with Mr Fernandes going on to establish Air Asia and Mr Bijleveld later becoming chief executive of Thai AirAsia.

Mr Santisuk was later persuaded to join Thai AirAsia as its head of commercial operations as the airline began a new chapter in aviation history by introducing the successful low-cost model to the Thai market.

By overcoming all kinds of challenges over the past 20 years, such as the 2003 Sars epidemic, the Indian Ocean tsunami in 2004, and various periods of political unrest in Thailand, Mr Santisuk said he always believed those experiences would help the airline quickly rebound from the impact of Covid-19.

Unlike many other airlines during the pandemic, Thai AirAsia made a bold move by retaining its entire workforce and fleet, opting only to return aircraft when their contracts expired.

“We adopted a ‘pause and play’ strategy to continue from the same place where we stopped once we wanted to resume again, instead of starting from the beginning of the whole track that would have made us progress slower during the recovery period,” said Mr Santisuk.

He said he wanted to give credit to the chairman of Thai AirAsia’s board — Vichate Tantiwanich — who allowed the company to maintain this plan, and also give credit to his 5,000 staff, who had received a reduction in pay and participated in the company’s furlough programme.

The airline also received good cooperation from stakeholders, such as the aircraft leasing company, airports, and the provider of aeronautical radio services, for temporarily pausing service expenses and repayment.

Salaries were slashed based on the position of the employee. For example, Mr Santisuk’s salary was cut by 50%, whereas the salaries of employees earning the least would receive the smallest reduction in salary.

“Our greatest ‘lesson learned’ is to make ourselves healthy, with strong internal management, financial status and stakeholders,” he said.

Starting with two aircraft in 2004, the company is now operating a fleet of 54 aircraft. Mr Santisuk said he believes that a strong organisational mindset ensured the airline survived and it still maintains the biggest market share on domestic routes following the pandemic.

In terms of costs, he said the airline learned to streamline its operational plan with feasible and well-prepared plans, particularly in terms of fleet expansion, which is the biggest investment for airline businesses.

The key point in terms of sales and marketing is to step away from a price war as experienced in the past, he added.

Looking ahead, he said the aviation industry still has to maintain a balance between supply growth and demand over the next few years.

On the demand side, airlines must closely monitor pent-up demand and assess how long it will continue. They must monitor the progress of big markets such as China, as well as how the Russia-Ukraine war will affect the world economy and tourism.

With supply chain disruption persisting, carriers still have to wait when it comes to aircraft maintenance and face delayed aircraft deliveries.

“In the long run, I believe in sustainability for all aspects,” he said.

BANGKOK POST CEO OF THE YEAR 2023

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Germany to seize Japan’s third-biggest economy crown

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TOKYO – Thirteen years on, the Japanese still haven’t quite gotten over China surpassing their economy in gross domestic product (GDP) terms. Now here comes Germany with a fresh blow to the national psyche.

This week, the International Monetary Fund calculated that Germany’s nominal GDP is on track to surpass Japan’s this year. That would push Japan from No 3 to No 4 globally.

If you think Prime Minister Fumio Kishida’s approval ratings are low now – a mere 29% – just wait until this changing of the economy guard makes banner headlines. It will remind 126 million people that the ruling Liberal Democratic Party continues to dither as Japan’s global footprint shrinks.

Economists are skilled at finding creative ways to explain away such inflection points. We’re only talking about GDP in US dollar terms, some argue. Others say vagaries surrounding changes in prices of goods and services muddy the picture.

And to this day, Tokyo stresses per capita income levels — which are markedly higher in Japan — are the most important metric vis-a-vis China’s economy.

But there’s no masking that the fall from No 3 to No 4 speaks to the weakness of the Japanese economy and the collateral damage from a now backfiring 25-year-old weak yen policy.

It’s worth noting, too, that German Chancellor Olaf Scholz’s economy isn’t exactly thriving in the homestretch to 2024. The IMF thinks growth in the US, UK, France and Spain will top Germany over the next five years.

In mid-August, The Economist argued Berlin had gone “from European leader to laggard” and asked, “is Germany once again the sick man of Asia?” Ten days later, a Wall Street Journal headline proclaimed “Germany Is Losing Its Mojo. Finding It Again Won’t Be Easy.”

Economists can debate where Germany is, circa late 2023. But it’s hard to refute that from the mid-2000s to the late 2010s, Berlin showed Tokyo how it’s done in terms of thriving economically despite strong exchange rates.

German executives and policymakers “didn’t complain about exchange rates – they figured it out and restructured accordingly,” explains economist Stephen Jen, managing partner at SLJ Macro Partners. What’s more, as the global economy grew increasingly chaotic after the mid-2000s, Germany “didn’t fight it,” Jen notes. Berlin “went with it” and raised its economic game accordingly.

Over time, Germany – then under the leadership of Gerhard Schroder followed by Angela Merkel – found ways to innovate and adapt to the fast-changing forces of globalization despite high labor costs and financial crises.

Better than most peers, Germany balanced tensions between increasing competitiveness and maintaining maximum employment, even amongst the “Mittelstand,” the medium-sized enterprises that long formed the backbone of German industry.

Germany’s SMEs are highly competitive; Japan’s, less so. Image: Twitter Screengrab

In 2014, economist Sebastian Paust probably didn’t know how right he was when arguing in an Asian Development Bank report that the Mittelstand was a “model” not just for Japan but emerging Asian economies, too.

If a “full” German Mittelstand-like “success story is the goal,” Paust explains, “reform steps must be taken to create a high-standard legal and institutional system that is complemented by a stable and sufficiently decentralized and participative political system combined with a strong entrepreneurial spirit toward social responsibility.”

Though it boosted exports in the late 1900s, Japan’s weak yen policy deadened the nation’s entrepreneurial animal spirits. Since then, a revolving door of leaders leaned on a weak yen to juice growth. That rid the last 13 governments of the urgency to boost competitiveness, recalibrate growth engines and welcome disruption.

Year after year, the Bank of Japan came under increasing pressure to ease further — to push a quantitative easing (QE) experiment that began between 2000 and 2001 into new monetary frontiers.

Things got supercharged in 2013 when Haruhiko Kuroda was named BOJ governor. The central bank went on a multi-year buying binge, cornering the government bond market. Stocks, too, through epic buying of exchange-traded funds. By 2018, the BOJ’s balance sheet topped the size of Japan’s entire economy — then roughly US$4.9 trillion.

Yet the last decade of hyper-easing merely exacerbated Tokyo’s all-liquidity-no-reform problem. It generated record corporate profits, but it failed to incentivize CEOs to boost wages, invest big in innovation, increase productivity or take risks on promising new industries.

A weak exchange rate provided 25 years of modern capitalism’s most generous corporate welfare, which ended up holding Japan back. Why would CEOs exert themselves restructuring, recalibrating or reimagining industries that once showed Apple, Samsung and Tesla how it’s done when the BOJ has your back 24/7?

Prioritizing exchange rates over disruption made dominating Asia’s future industries much easier for China. And now Germany, whose officials are about to walk into Group of Seven meetings with even greater swagger.

The IMF reckons Germany’s nominal GDP will end 2024 at $4.43 trillion, topping Japan’s $4.23 trillion for Japan. This shift comes as the yen sits around 150 to the dollar — near a 33-year low — and around 160 to the euro. The yen-euro rate was last in this neighborhood in 2008 amid the global financial crisis.

What’s more, the yen is likely to slide even further. Tight labor markets and surging oil prices are upping the odds of more US Federal Reserve rate hikes, perhaps as early as next week. European Central Bank rate hikes also widened the yield gap with Japan.

The yen is falling while there is no end to QE in sight. Image: Facebook

“The greenback continues to draw smaller benefits from strong US data and high rate advantage than it should, likely due to its overbought status, but upside risks remain predominant,” says economist Francesco Pesole at ING Bank.

The BOJ remains in stimulus mode amid flatlining wages and slowing growth. Few observers expect much from next week’s BOJ policy meeting. At most, the BOJ might announce a modest tweak in its “yield curve control” policy. An outright tightening step, though, is becoming even less likely given Prime Minister Kishida’s fiscal policy plans.

In December, Kishida unveiled a more than 50% boost in defense spending over five years to $315 billion. Last week, he pledged to cut income taxes and corporate levies, in addition to greater assistance for childcare. This latter push comes as his government’s approval falls to record lows.

As Tokyo adds to a national debt that’s already approaching 260% of GDP, the BOJ might have to boost liquidity as opposed to withdrawing it. Kishida’s U-turn on spending will put newish BOJ Governor Kazuo Ueda in a difficult spot.

When he took the helm in April, traders everywhere expected an early pivot away from QE. Perhaps even a rate hike or two. Ueda has demurred, fearing Japan Inc isn’t ready to lose the easy money training wheels.

In the meantime, the global scene has taken a turn for the worse. The 2022 surge in energy prices related to Russia’s Ukraine invasion is now accelerating thanks to the Hamas-Israel crisis. As the gap widens between Japanese yields and those in the West, the yen may experience increased downward pressure, compounding Japan’s troubles.

As Willem Thorbecke, a senior fellow at Japan’s Research Institute of Economy, Trade and Industry, puts it: “Although a weak yen has been profitable for many Japanese firms and their trading partners, a further depreciation would be harmful. It will not increase exports of goods or key services such as tourism. It would also limit any potential increase in employment at a time when Japan needs more high-quality jobs.”

In Thorbecke’s view, further depreciation “would reduce the purchasing power of firms and consumers, and hinder their ability to import key products. For pharmaceutical goods and oil, whose imports do not decline when the exchange rate weakens, depreciation would still increase their yen costs.”

The problem is that “when the dollar costs of oil and primary commodities are already high, any further increase could swell Japan’s [current] account deficit,” Thorbecke says. “While the current value of the yen offers advantages, a further downward spiral would impose costs that exceed the benefits.”

A weak yen also can negatively affect consumer confidence. “Due to an increase in the weight of imported consumer goods, the purchasing power of households became prone to decline when the yen depreciated,” notes Wakaba Kobayashi, economist at Daiwa Research Institute.

Rather than currency management, “structural reforms that encourage innovation and productivity should be continued,” says analyst Takeshi Tashiro at the Peterson Institute of International Economics.

“Japan,” Tashiro says, “must rethink its agenda to address excess private savings and consider alternative ways to manage its savings when the private sector cannot meet demand on its own.”

Given the high level of government debt, Tashiro says, “Tokyo should also seek out the most promising investment opportunities while prioritizing alternatives to budget deficits in order to sustain demand. Low inflation in a period of yen depreciation shows that managing the economy in the face of huge private savings continues to be Japan’s major challenge.”

Asked about the IMF projections earlier this week, Japan’s Economy Minister Yasutoshi Nishimura said: “It’s true that Japan’s growth potential has fallen behind and remains sluggish. We’d like to regain the ground lost over the past 20 or 30 years. We want to achieve that through measures such as our upcoming package.”

Yet Kishida’s package would do nothing of the sort by merely treating the symptoms of Japan’s malaise, not its underlying causes.

Prime Minister Fumio Kishida’s fiscal package won’t stem Japan’s slide down the global economic rankings. Photo: Asia Times Files / Agencies

Already, IMF data suggest Germans have reason to feel better off than their Japanese counterparts. Average German GDP per capita is roughly $52,824 versus $33,950 for Japanese households. At this point, continued yen weakness will do zero to boost Japanese living standards.

To be sure, German leader Scholz has more than his fair share of economic headaches. Last month, the Organization for Economic Cooperation and Development (OECD) warned that Germany may suffer the heaviest blows from a global slowdown.

“Germany, perhaps more than other EU economies, is affected by the slowdown in China,” says Clare Lombardelli, chief OECD economist. “It exports a lot to China, as well as imports, so it’s a combination of factors.”

While “you’re seeing weaker growth across all of Europe,” Lombardelli adds, “Germany is probably the largest example. You’re seeing the impact of inflation on real incomes. That’s been suppressing consumer demand. And you’re seeing the impact of monetary policy tightening.”

Still, Japan’s woes are enabling Germany to rise in global rankings at the worst possible moment for a Tokyo government that’s very much on the ropes. The costs of 25 years of a yen-only growth strategy have never been higher, with the slip from No 3 to No 4 perhaps just the first drop in a deeper economic fall to come.

Follow William Pesek on X, formerly Twitter, at @WilliamPesek

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Gartner: “AI will be recognized as a primary economic indicator of national power”

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(With) enough GPUs & electricity, you have the ability to make unlimited amounts of talent
Organisations failing to address AI anxiety could face up to 20% higher rates of turnover

Research and advisory firm, Gartner, has released new predictions spotlighting the role of Artificial Intelligence (AI) and how it will change the workplace and…Continue Reading

Commentary: Could Trans-cab merger and rumoured foodpanda buyout spell trouble for Grab customers?

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FOODPANDA EXIT – BUY OUT OR SHUT DOWN?

In food delivery, the focus of leading players has definitely shifted towards profitability.

Although Delivery Hero announced in August that it had achieved positive adjusted profit before interest, tax, depreciation and amortisation (EBITDA) on a group level in the first half of 2023, it had hinted in earnings calls that it would exit markets where it did not have a clear lead.

There have been rumours of Delivery Hero exiting foodpanda in Southeast Asia since last year. Based on the Momentum Works Apples to Apples analysis, Delivery Hero Southeast Asia collectively contributes less than half of the gross merchandise value that Korea generates through its subsidiary Woowa Brothers. In addition, Delivery Hero has also been grappling with a diminishing market share in the region and a much weaker cash position compared to Grab.

In this context, it is hard to see how Delivery Hero could turn this around and make Southeast Asia meaningful and worthwhile for it. If the decision is indeed to exit Southeast Asia, the only choices are finding a buyer or shutting down.

Shutting down is not an ideal outcome for everyone involved – employees, F&B establishments, riders and customers. There was chaos when Deliveroo suddenly announced on Nov 16, 2022 it would exit Australia immediately, shocking restaurants and customers with unfulfilled orders and sent riders scrambling for jobs.

Things could only be more complicated in Southeast Asia’s fragmented markets. Delivery Hero itself would need to go through the painful process of liquidating its multitude of entities, which could take very long and be very costly.

While Grab has not acknowledged talks with Delivery Hero, it’s hard to see any other party with meaningful business logic and experience to take over foodpanda.

Unlike the Grab-Trans-cab deal – which is estimated to be around S$100 million (US$75 million) for 2,500 vehicles, vehicle workshops and fuel pump operations – the question is what Grab really gains from buying foodpanda for a rumoured €1 billion (US$1.06 billion) when it has its own established food delivery network and could simply wait to fill the space left by foodpanda’s exit.

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Why Australia should trade way more with Taiwan

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Yet as Canberra continues to be the focal point of Beijing’s economic coercion and loosens, industry growth andnbsp, & nbsp,

The Anthony Albanese administration has enthusiastically resumed father Scott Morrison’s initiative to increase American exports to more areas in order to counteract perceived over-reliance on China.

Trade Minister Don Farrell has presided over the implementation of free trade agreements with nbsp, India, the UK, and the United Kingdom in just under 18 months in the portfolio. He has also pushed for improvement in conversations with the European Union. & nbsp,

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ) has been joined by the United Kingdom, and Australia’s free trade agreement with ASEAN and New Zealand is being upgraded andnbsp.

Despite these commerce victories, Australia also has a significant Taiwan-shaped hole in its efforts to lessen its reliance on China for exports. Australia’s fourth-largest export location for goods was the Taiwanese economy, which in 2022 sucked in a massive AU$ 30 billion( US$ 19.1 billion ) worth of American goods. & nbsp,

It was more than twice as important as New Zealand and nearly ten times more profitable for American products exporters than the United Kingdom, surpassing actually India and the European Union.

About 40 % of Australia’s total goods exports to the 10 part express ASEAN sector, which has 667 million residents, go to Taiwan, where there are only under 24 million people.

Representatives of members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade deal in March. Photo: Reuters / Ivan Alvarado
staff of the Trans-Pacific Partnership trade agreement’s Comprehensive and Progressive Agreement. Agencies in the image

This does not imply that Australia may downplay or reject the significance of free trade agreements with countries like the United Kingdom, the European Union, and India.

Given the size and wealth of the European Union and the Indian markets, as well as the stupendous & nbsp, growth potential, of each, the trade agreements with the latter are likely to have the greatest long-term benefits for Australian exporters.

However, if pursuing a bilateral trade deal with the United Kingdom or bringing it into the CPTPP is worthwhile for Australia, then there is strong monetary evidence in favor of doing the same with Taiwan, an export industry that is significantly more significant for Australians. When examining the overall state of Australia’s industry ties, this Taiwan oversight is especially striking.

Despite shared membership of the World Trade Organization and Asia – Pacific Economic Cooperation ( APEC ), Taiwan is conspicuously absent from Australia’s free trade agreements. Of Australia’s & nbsp, top 10 export destinations & nbsp, in 2022, Taiwan was the only one in which Australian exporters didn’t enjoy the benefits of either a bilateral or regional free trade agreement.

Real, Australia’s exports to Taiwan by worth are dominated by & nbsp, energy and nutrients, which don’t experience higher taxes. But with agricultural imports to Taiwan subjected to average tariff rates of nearly & nbsp, 16 %, a free trade agreement would give Australian primary producers a competitive edge in one of Asia’s & nbsp, wealthiest & nbsp, consumer markets. & nbsp,

Given that it was Australia’s & nbsp, wine growers & nbsp, and & nbsp, lobster fishers & nbsp, that suffered most at the hands of & nbsp, China’s economic coercion, there is a powerful case for gaining better access for Australian agricultural products in reliable export markets like Taiwan.

Regardless of the financial logic, any force for freer trade with Taiwan can’t leave the boundaries of geography.

Getting Taiwan into the CPTPP will probably remain an implausibly long shot given Beijing’s & nbsp, competing bid & nbsp, and & nbsp, opposition & nbsp, to Taipei joining combined with the trade pact’s & nbsp, consensus – based & nbsp, accession process. & nbsp,

But that still leaves opened the option of pursuing a much more reasonable diplomatic free trade agreement with Taiwan. With Australia already Taiwan’s & nbsp, seventh – largest & nbsp, trading partner, this is an option that Taipei & nbsp, also supports.

Having & nbsp, pressured Canberra & nbsp, out of its previous plan to negotiate a free trade agreement with Taipei during the Malcolm Turnbull government, Beijing would oppose moves to formally liberalize trade.

Although & nbsp, Singapore & nbsp, and & nbsp, New Zealand & nbsp, already have free trade agreements with Taiwan, these were signed in 2013 when the more Beijing – friendly Nationalist government was in power and when China wasn’t trying so hard to & nbsp, internationally isolate & nbsp, Taipei. & nbsp,

Despite good criticism from Beijing, the Albanese government doesn’t permit its deal access agenda to get held hostage to Taiwanese government concerns. Not least because Beijing’s enthusiasm for & nbsp, relationship repair & nbsp, probably gives Canberra more license to take positions that China doesn’t like.

Marriage maintenance: Australian Prime Minister Anthony Albanese and Chinese President Xi Jinping meet and greet at the Bali G20 Summit on November 15, 2022. Photo: Instagram

Since mid – 2022, Beijing has moved to & nbsp, normalize diplomatic ties & nbsp, and incrementally & nbsp, dismantle trade restrictions & nbsp, despite Canberra continuing to pursue policies that & nbsp, disappoint the Chinese government & nbsp,— everything from & nbsp, securitizing & nbsp, Australia’s critical minerals industry to & nbsp, calling out & nbsp, China’s human rights abuses in the United Nations. & nbsp,

The next 17 months of bilateral relationship maintenance suggest that China didn’t been dissuaded from embracing warmer ties with Australia, despite Beijing’s diplomatic rebukes and secret instructions if it tries to negotiate a free trade agreement with Taipei.

Business plan isn’t entirely driven by economic complementarities in a time when interdependence is being used more frequently. Confidence is important as well. Fortunately, there is a lot of both in the Australia-Taiwan connection. & nbsp,

In addition to the fact that the American and Chinese economies now trade a sizeable amount, increased export dependence on Taiwan carries very little risk of economic coercion.

Strong financial complementarities between the American and Taiwanese economies may bind them together for many years to come. Australia can be sure that Taiwan didn’t use trade relations to advance political agendas, in contrast to China.

Author of the newsletter & nbsp, Beijing to Canberra and Back, which chronicles Australia-China relations, Benjamin Herscovitch is a research fellow at The Australian National University.

This andnbsp, post, and was originally published by East Asia Forum and are being reprinted with permission from Creative Commons.

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Big banks linked to products with pangolin and leopard parts

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A stock image of a leopard.shabby pictures
authored by Alex Binley
NBC News

According to a statement, major international banks are investing in businesses that make traditional Chinese medicines with tiger and animal components.

Both species are considered to be in danger.

Nine products that the Environmental Investigation Authority ( EIA ) claims contain leopard or pangolin are being invested in by 62 banks and financial institutions.

The businesses in question have been contacted by the BBC for opinion.

Global investment firms like The Goldman Sachs, UBS, Deutsche Bank, and BlackRock, as well as UK financial services behemoths like HSBC, Prudential, Legal & amp, General, are among the companies.

Lions and animals are in danger, so it is likely that they will go extinct in the near future. In an effort to ensure that their success in the wild is not in danger, both are also listed on the Mentions( Convention on International Trade in Endangered Species of Wild Fauna and Flora ) treaty, which forbids foreign corporate industry in them and their parts.

The three medical firms that are highlighted in the EIA review are Jilin Aodong Pharmaceutical Group, Tianjin Pharmaceutical party, and Tong Ren Tang Group.

Although not all of the businesses listed in the EIA review make investments in all three, they all make at least one.

Leopard bone is used as a tiger bone substitute in traditional Chinese medicine( TCM ). Tiger tooth is thought to help eliminate breeze, strengthen bones and limbs, and relieve pain. Pangolin weights are rumored to improve nursing, blood circulation, and chronic pain relief. Medical evidence does not support these assertions.

Following the report’s release, EIA Legal & amp, Policy Specialist Avinash Basker urged the Chinese government to” fulfill CITES recommendations and forbid the use of leopard, pangolin, tiger, and rhino body parts from all sources for all commercial purposes in its domestic markets.”

” The international community’s CITES tips to protect these types are disregarded when highly threatened animals like leopards, pangolin, elephant, and tigers are used in conventional medicine products.” This is apply on a truly professional scale, which can only bring these species ever-closer to extinction while instantly sending contradictory messages to consumers, increasing demand for their parts and derivatives, and tarnishing TCM’s reputation around the world, he claimed.

A stock image of a pangolin.

shabby pictures

He continued,” It’s especially disheartening to see so many significant banks and financial institutions actually supporting this harmful using, especially given how many have vowed to do otherwise.” ” They need to withdraw from TCM producers using threatened species as soon as possible if their environmental credentials are to have any trust.”

The lion or anteater derivatives were not being sourced, according to the EIA, which claimed it was unable to do so.

” No a direct investment and does not have direct exposure to these organizations ,” according to HSBC in an interview. It also states that HSBC Global Asset Management Canada responded to the EIA statement by saying that its” opportunities in the TCM businesses were limited to passive or” sensor” money rather than actively managed funds.” This implies that funds are immediately invested in stocks based on a linked indicator that they track, such as the FTSE 100.

According to Deutsche Bank, the report is focused on property managers and was directed to DWS, an property management firm that was formerly a part of DB but is now on its own.

According to a statement from DWS, it has” different ESG-related ] environmental, social, and governance” policies that offer instructions on how to incorporate the information from the environment into our investment processes, engagement, or proxy voting activities, where we combine our voting rights for active and passive funds.

There are no positively managed DWS money invested in any of these three manufacturers nationally, according to the statement.

According to Legal & amp, General Investment Management” manages many funds against various index providers to meet a wide range of client demands.”

According to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Service( IPBES ), which covers the exploitation of wild species,” LGIM is aware that one of the key drivers of nature-loss” is” natural resource use and” exploitation ,” the company said.

In order to address these IPBES owners, we are creating a” nature model” that integrates and discloses high-quality, consistent, location-specific data that relates to business behavior in relation to these important nature-related issues.

BlackRock opted not to say anything.

For reply, the BBC has contacted UBS, Tong Ren Tang, Tianjin Pharmaceutical Group, and Jilin Aodong Pharma Group.

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Celebrating visionaries and inspirational leaders

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Celebrating visionaries and inspirational leaders

Once again, the halls of the Bangkok Post resonate with the thrill of honouring brilliance and innovation within the corporate sphere. In our steadfast commitment to recognising exceptional leadership, we take immense pride in presenting the “Bangkok Post CEO of the Year 2023” awards.

Building upon our tradition of acknowledging trailblazers who have reshaped industries and ignited change, this year’s awards pay homage and extend applause to chief executive officers and top leaders for their unwavering guidance, transforming ordinary companies into beacons of success, progress and inspiration.

The awards encompass a diverse array of categories, each representing a facet of the dynamic business world. From visionary strategies to transformative leadership, these accolades spotlight not only corporate triumphs but also the remarkable contributions these leaders have made to society and the economy at large.

As we venture into a new era with 14 distinctive awards, each winner’s captivating story will be told, illuminating why they have captured the public’s imagination and admiration. Their narratives, achievements, innovative strategies and contributions that propel their organisations into the future will be spotlighted in the days ahead.

To mark the “CEO of the Year 2023” announcement, the Bangkok Post is from today launching a series about awarded CEOs on every working day, showcasing their achievements, business strategies, and inspirational visions both in the print edition and on our website.

PTTEP LOOKS TO A MORE SUSTAINABLE FUTURE

CEO Montri Rawanchaikul understands the economic necessity for secure sources of energy, but vows that the firm will always keep the environment in mind

Mr Montri has been a driving force at PTTEP, leading initiatives to reduce carbon dioxide emissions and pave the way for sustainable approaches.

Chief Executive Officer Montri Rawanchaikul believes one key mission for PTT Exploration and Production Plc (PTTEP) is to devise ways to reduce the impact of its businesses on the environment, particularly by reducing the company’s carbon dioxide emissions.

Mr Montri said he is aware the company needs to continue to secure enough fuel to support the Thai economy, but this effort should not ignore the cost to the environment.

As someone who sets policies and strategic plans for PTTEP, Mr Montri has helped the company promote projects to cut carbon dioxide emissions, seek new alternative energies and pave the way to operate in a more sustainable manner.

One such project is developing Thailand’s first carbon capture and storage (CCS) facility at the Arthit gas field in the Gulf of Thailand, one of several efforts aimed at helping the government curb carbon dioxide emissions in the country.

The CCS project fits with the company’s campaign against global warming and the environmental, social and corporate governance (ESG) principles, which promote business development and taking better care of the environment and society, said Mr Montri.

ESG refers to a set of standards that are said to be able to lead to business sustainability.

“We expect the CCS project to store up to 1 million tonnes of carbon dioxide during gas production at Arthit within 2027,” said Mr Montri.

The company has already completed the preliminary front-end engineering and design phase of the project. It expects the CCS facility to start operating by 2027.

The Gulf of Thailand offers great potential to store carbon dioxide, amounting to roughly 40 million tonnes a year, because, geographically, the terrain is a sink area, which is suitable for the storage of carbon dioxide.

PTTEP is also cooperating with five companies from France and South Korea to produce green hydrogen in Oman, said Mr Montri.

Green hydrogen, which is used to fuel power generation and manufacturing processes, is produced by using electricity made from renewable energy to split water molecules into oxygen and hydrogen.

This project shows the company is not solely focused on the exploration and production of petroleum, as it is also seeking new opportunities to develop future energy.

Under a contract made with Hydrom Oman SPC, which operates under the government of Oman, PTTEP and its partners were awarded a 47-year concession to produce green hydrogen at Block Z1-02 in Dugm in eastern Oman.

The production facility, to be run by 5 gigawatts of solar and wind power, is expected to open in 2030, with an estimated 220,000 tonnes of hydrogen produced annually.

These two projects indicate PTTEP is focusing more on the environmental aspects of its businesses, which will, in turn, partly help the government to run a campaign to combat global warming successfully.

At the 26th UN Climate Change Conference held in Glasgow in 2021, Thailand announced it is determined to achieve carbon neutrality, a balance between carbon dioxide emissions and absorption, by 2050, along with a net-zero target, a balance between greenhouse gas emissions and absorption, by 2065.

PTTEP also has its own plan under — EP Net-Zero 2050 — concept, which aims to achieve a net-zero target by 2050.

“The CCS and green hydrogen projects will support PTTEP’s environmental efforts, driving Thailand and the world at large towards a low-carbon society,” said Mr Montri.

Greater care for the environment will be a crucial part of PTTEP’s work in the future.

“The company will go on expanding its investment in natural gas production, but at the same time, it will also incorporate the greenhouse gas emission issue in the decision-making process of new gas projects,” said Mr Montri.

National energy security is important to fuel the growth of the country’s economy, but its development must be sustainable, which will be achieved through better environmental management, he said.

MTL aims to go from strength to strength

Chief executive Sara Lamsam’s vision is for the insurer to become the country’s most trusted life and health partner

Mr Sara believes positive factors will support the growth of the country’s life insurance industry.

Sara Lamsam is the driving force behind the success of Muang Thai Life Assurance (MTL), one of Thailand’s most prominent life insurance companies.

Backed by 30 years of experience within the Lamsam family in the life insurance industry, the 54-year-old president and chief executive officer has played an integral role in outlining and implementing business strategies that have driven MTL’s steady growth for decades.

A key strategy that led to the company’s outstanding performance and its ability to win accolades has been MTL’s provision of a range of innovative products and services.

MTL this year announced its goal of becoming a life insurer that stands out in terms of its product offerings via online platforms to reach various groups of customers and maintain a leadership position in the country’s life insurance industry.

Consumers can now access MTL’s products via both traditional and new distribution channels. The company established the Fuchsia innovation centre under a “think out of the box” concept to strengthen innovations in relation to its products, services, and management processes. The centre is an example of MTL’s collaborations in the form of business alliances to develop products that serve different groups of customers, particularly those requiring a unique product.

MTL Click, an application developed to allow customers to access all of the company’s services in one location, received the Business+ Product Innovation Award 2023 in May after over 800,000 individuals downloaded the app.

Two months earlier, the insurer launched MTL Fit, an app to help make people’s healthcare hassle-free. It offers dynamic pricing under an “MTL Fit Reward” feature for discounts of up to 15% on insurance premiums.

Last month, the company joined hands with Line BK to offer an innovative life insurance product for lower-income consumers and freelancers. These groups can easily access information and pay a small amount for life insurance protection via Line Pay.

Mr Sara said offering products and services that are easy to understand and equipped with innovation for the convenience and accessibility of customers enables MTL to meet the needs of every kind of lifestyle at different stages of life. That, in turn, enables MTL to be connected with more targeted customers.

Such a strategy helps the company expand its customer base while core products such as health coverage, critical illness coverage, unit linked-insurance, and pension insurance continue to expand well, supporting MTL’s ability to grow continuously and stand out in the life insurance sector.

Mr Sara, early this year, announced his vision for MTL to become the country’s most trusted life and health partner and become a market leader as the “health provider” of innovation in terms of health insurance coverage and wealth management under the concept of “MTL Next to You”.

He emphasised the concept of life insurance products that meet the needs of consumers through an “outside in” perspective. Using this strategy, the company offers services with new innovations through both digital and non-digital systems to meet the needs of customers who prefer either self-service or service with a human touch.

“The life insurance business today has changed the way of thinking as companies cannot only rely on an ‘inside out’ dimension in offering insurance coverage,” said Mr Sara.

“Nowadays, the world of life insurance is about personalised or ‘outside in’ to serve customers. Finding products that meet customer needs is very important, so big data and innovation is a key success tool for today.”

Using information systems to develop insurance plans via online and offline channels is a strategy that keeps customers satisfied, making MTL successful and its operating results grow even in times of crisis, he said.

The life insurance industry overall continued to grow in this year’s first half, with total insurance premiums reaching 300 billion baht, up 3.78% compared to the corresponding period last year. For the entire year, premiums are projected to grow 0-2% year-on-year to 613 billion to 624 billion baht.

In the first five months, MTL recorded higher growth than the overall market, with insurance premiums surging 14.4% year-on-year to 29.9 billion baht. Of the total, new insurance premiums accounted for 10.5 billion baht, up 13.8% year-on-year, and insurance renewal premiums soared 14.8% to 19.4 billion baht.

In his capacity as president of the Thai Life Assurance Association, Mr Sara believes that positive factors will support the growth of the country’s life insurance industry as people become more aware of the importance of life insurance and additional health or critical illness insurance policies. The trend of increasing medical expenses and uncertainty regarding the spread of emerging diseases such as Covid-19 have driven the growth of the insurance industry so far this year.

Life insurance policies, relative to the size of the Thai population, average 38%, while the value of the life insurance industry contributes roughly 3.8% to GDP at present. In some countries, life insurance companies can reach a larger number of people and can contribute up to 15% to GDP.

The life insurance business in Thailand still has plenty of room to grow, as many people are yet to be covered by insurance products.

Moreover, 95% of the funds in the life insurance system are invested in debt instruments, government bonds, and stocks. This suggests that the insurance business is connected to the country’s ecosystem.

HSBC Thailand taps global connectivity

The bank will continue to support its clients in growing and diversifying their investments in offshore markets, said Mr Gamba.

HSBC Thailand is leveraging its global connectivity and investment expertise to help both Thai and international clients grow their businesses worldwide, while maintaining a long-term commitment to expanding the bank’s business in the Thai market.

The bank aims to establish itself as the leading international bank in Thailand for outbound business, supporting the expansion of large Thai corporations regionally and globally.

“Globalisation is the bank’s superpower in connecting our clients to new business opportunities within Asean and beyond,” said HSBC Thailand’s Chief Executive Officer Giorgio Gamba.

In the wealth space, HSBC Thailand has been actively enhancing its capabilities in Thailand to better serve the country’s high-net-worth individuals and their families.

The bank will continue to support its clients in growing and diversifying their investments in offshore markets.

HSBC Thailand launched its onshore asset management business in September 2022 after introducing private banking business to the country in February 2021, and the bank has been able to grow the business segment satisfactorily, he said.

Foreign direct investment (FDI) has been growing in various countries and industries in the region, including Thailand. Japan accounts for one-third of Thailand’s inbound FDI.

China ranked second in terms of FDI last year and will play an increasingly important role in investment as many of that country’s companies are relocating their manufacturing bases to Thailand.

Thailand has attracted FDI in several industries, but especially agriculture, hospitality, healthcare, and manufacturing, particularly EV production and the automotive-related supply chain.

In addition, HSBC Thailand aims to continue to be the leader when it comes to inbound international business in the Thai market.

The bank earned its leadership position based on the growth potential of both the Thai and regional economies.

Meanwhile, Asean continues to be the world’s fastest-growing trade bloc, offering significant wealth and trade opportunities for businesses and investors alike.

“Thailand is a country where we see tremendous potential to grow and expand our business, so we have ambitious growth plans here,” Mr Gamba said.

HSBC Thailand announced an impressive performance in 2022, with revenue growing 28% and profit growing 55% year-on-year, representing a record high over a 10-year period. Strong relationships with customers, employees and the wider community are key to achieving these remarkable rates of growth.

Moreover, the bank will continue to invest in people, digital infrastructure as well as other resources to bolster its existing operations, which span wholesale banking, market and securities services, and private banking.

In response to local business expansion, HSBC Thailand has completed a capital increase, in line with the nation’s economic growth, he said.

HSBC’s country strategy was developed in parallel with Thailand’s national development plan.

With global networks and a high level of investment expertise, international connectivity is the bank’s key business strategy in supporting corporate clients investing and expanding worldwide.

The bank focuses on helping customers expand businesses in the world’s key economic corridors, where HSBC has an active presence, notably in China, the US, Europe, Asean, and the Middle East.

The bank supports Thai clients in growing their businesses in 42 countries.

HSBC Thailand has set out an ambitious plan to prioritise sustainable financing and investment that supports the transition to a net zero global economy, said Mr Gamba.

The bank also encourages Thai clients to strategise their portfolios and raise capital for renewable investment.

The bank committed to providing US$1 trillion of sustainable finance and investments by 2030 after achieving $211 billion in 2022.

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HSBC Thailand taps global connectivity

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While maintaining a long-term commitment to growing the company’s business in the Thai business, HSBC Thailand is utilizing its global communication and investment experience to assist both Thai and international customers in growing their businesses globally.

According to Mr. Gamba, the lender may keep assisting its customers in expanding and diversifying their onshore market investments.

  • Best Director in Banking International
  • Giorgio Gamba, HSBC Thailand’s Chief Executive Officer

The institution seeks to become Thailand’s top global bank for outbound business by assisting the growth of sizable Thai corporations both locally and internationally.

According to Chief Executive Officer Giorgio Gamba of HSBC Thailand,” Globalization is the company’s power in connecting our clients to new business prospects within Asean and past.”

In order to better serve the nation’s high-net-worth people and their people, HSBC Thailand has been constantly improving its functions there.

The bank may keep assisting its clients in expanding and diversifying their onshore market investments.

After introducing personal bank to the nation in February 2021, HSBC Thailand launched its upstream asset management division in September 2022. According to him, the lender has been successful in expanding the business segment.

Thailand is one of many nations and industries in the region where foreign direct investment ( FDI ) has increased. One-third of Thailand’s outbound FDI comes from Japan.

As many of China’s businesses are moving their manufacturing facilities to Thailand, China, which ranked second in terms of FDI next year, will play a bigger and bigger part in funding.

Thailand has attracted FDI in a number of sectors, but particularly in manufacturing, Vehicle production, kindness, care, and agriculture.

Additionally, HSBC Thailand wants to maintain its position as the industry leader for northbound foreign trade.

Based on the potential for growth in both the Thai and regional markets, the institution attained its position of leadership.

Asean, however, continues to be the fastest-growing trade bloc in the world, providing both businesses and investors with considerable wealth and trade opportunities.

We have ambitious development plans here because Thailand is a nation where we see great potential to grow and grow our business, according to Mr. Gamba.

With revenue increasing 28 % and profit increasing 55 % year over year, HSBC Thailand announced an impressive performance in 2022, setting a record high for the same period. To achieve these extraordinary rates of growth, it is essential to build strong relationships with customers, workers, and the larger group.

Additionally, the bank will keep funding its current operations, which include general bank, market and securities services, and private banking by investing in people, online infrastructure, among other things.

According to him, HSBC Thailand has finished a capital increase in response to the rise of local businesses.

The state method of HSBC was created concurrently with Thailand’s regional development strategy.

Global connection is the bank’s main business strategy for assisting business clients in investing and growing globally thanks to its extensive network and level of investment expertise.

The lender focuses on assisting clients in growing their businesses in the major financial hubs of the world, particularly in China, the US, Europe, Asean, and the Middle East.

In 42 states, the lender assists Thai users in expanding their businesses.

According to Mr. Gamba, HSBC Thailand has outlined a bold plan to prioritize sustainable funding and investment in order to support the transition to an net-zero world economy.

Thai clients are also encouraged by the bank to plan their portfolios and raise money for green investments.

After achieving$ 21 billion in 2022, the banks pledged to offer$ 1 trillion in green investments and financing by 2030.

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BYD blowing by Japan for Thailand’s EV market

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As the two auto-making companies increasingly compete head-to-head for developing Asian industry, the Taiwanese electric vehicle juggernaut BYD is expanding its reach in Thailand, challenging Japan’s long-standing potency of the local car market.

According to Autolife Thailand, BYD only just entered the Thai automobile market in July 2022, but it already sells more than a third of electric vehicles and on 4 % of all new vehicle sales.

The best three businesses in Thailand are still Toyota, Isuzu, and Honda, but BYD is at the top of the list of EV manufacturers, representing the future of automobiles. BYD has surpassed four smaller Japanese rivals— Nisa, Mitsubishi Motors, Mazda, and Suzuki — in terms of the total number of vehicles sold in Thailand.

The fall of BYD in Thailand is a result of aggressive sales and marketing strategies. Rever Automotive, which has close ties to the Thai auto industry giant Siam Motors, has been given special dealership rights.

Rever offers a comprehensive support package and is apparently convincing dealers of lesser-known Japanese brands like Suzuki and Mazda to move to BYD.

Design comparisons are difficult, but the BYD ATTO 3 is said to be selling for US$ 30 000 to$ 33 000 in Thailand, compared to$ 43, 000 or more for the Nissan Leaf,$ 50 000 for Toyota bZ4X, and roughly$ 47, 500 for Tesla’s Model 3.

The smaller BYD Dolphin is being sold by Rever for just under$ 20,000, while the larger version is going for about$ 36, 000. Lately, Thailand’s top-selling EV was the ATTO 3.

Regional power scheme plays a significant role. The Thai government wants 30 % of all cars produced in the nation to be electric by 2030. Thus far, the Chinese have seized that chance while the Japanese have no.

The proportion of EVs in full Thai car sales has increased from about 1 % in 2022 to more than 10 % then, helped by incentives.

As part of a plan to help Thailand’s” natural coming,” Prime Minister Srettha Thavisin drove in the BYD Seal at the beginning of October. Chinese Vehicles hardly make an appearance in Thai auto industry statistics, according to Japan’s Nikkei newspaper, which stated that” it was symbolic that the vehicle was a Chinese-made one, not one from Japan.”

Data from Thailand’s Department of Land Transportation revealed earlier this year that battery-powered electric vehicles( Vehicles) from BYD were outselling Nissan vehicles by a margin of more than 50 to 1.

Nissan came in tenth place, SAIC( MG ), Great Wall Motors, Hozon and Geely( Volvo ), Tesla, and, toward the bottom of the list, BMW( including Mini ) and Porsche. BYD finished first in BEV registrations.

BYD began construction on a factory in Thailand in March of last year to make electric vehicles for export to Europe and another ASEAN nations.

It will have a power of 150,000 cars annually, or roughly 10 times as many as the business sold in Thailand during the first eight months of this year, and is located in the Eastern Economic Corridor of Thailand. In 2024, output is expected to start.

The groundbreaking meeting for the Thai stock of BYD. Photo: Twitter

Thailand now houses the Great Wall Motors and SAIC factories in China. Starting next time, GAC Aion, Hozon Auto, and Changan intend to join them.

The wave of Chinese investment will help Thailand maintain its status as Southeast Asia’s auto-producing hub— once known as the” Detroit of Asia”— and give Japan a wake-up call not only in Thailand but also in Indonesia, Malaysia, and other parts of the region.

The Japanese have no choice but to decline without making a quick and significant switch to electric cars after working for years to increase market shares of internal combustion engine vehicles to as high as 90 % in Southeast Asian nations.

According to data from the Japan Automobile Manufacturing Association( JAMA ), 80 % of the 2.8 million vehicles sold in ASEAN in 2021 were passenger cars, trucks, and buses produced by its members. According to more new information, Japan’s market share has since decreased to about 75 % as Hyundai Motor has grown in Southeast Asia as well.

The Japanese must protect a sizable manufacturing base in Southeast Asia. According to JAMA, more than 50 Chinese factories in ASEAN produced just over three million vehicles in 2021.

Of these, 48 % were produced in Thailand, 35 % in Indonesia, 11 % in Malaysia, and the majority in the Philippines and Vietnam. More than a third of the cars produced in Thailand were exported in 2021.

The jobs and supply chain infrastructure that the Chinese auto industry supports is strongly supported by all of these nations. Does the Japanese react quickly enough to prevent losing another sizable portion of the market is the question at hand.

Suzuki in India

In India, where Suzuki Motor plans to convert its company, Maruti Suzuki, into its global EV manufacturing base, the situation is very different.

The enormous potential of the American marketplace, Maruti Suzuki’s hegemonic market share in the nation, and an estimated 20 % lower cost of production than in Japan are all aspects in favor of this choice.

Maruti Suzuki sold just over 40 % of the passenger car market in India in 2022, according to the Federation of Automobile Dealers Associations.

Following it were Hyundai Motor at 15 %, Tata Motors at 14 %, Mahindra & amp at 9 %, Kia, Hyundai, Toyota Kirloskar, and Honda, respectively.

After China and the US, India is currently the third-largest vehicle market in the world. New four-wheeled automobile sales in India increased 28 % to 4.85 million units in the year to March 2023, surpassing the country’s 4.39 million profits, which fell to fourth place.

On an assemblage range in Manesar, Haryana status, workers outfit Maruti Suzuki Swift vehicles. Asia Times Data / Agency image

Similar to Thailand, the American market for electric vehicles is currently expanding. About 15, 000 four-wheeled electric cars were sold in the six months leading up to June 2023, or less than 1 % of India’s general auto industry but up six days year over year. The Indian government wants EVs to account for 30 % of new car sales by 2030, just like in Thailand.

More than 2.7 million electric vehicles( EVs) are found on Indian roads, but almost all of them are two – and three-wheelers, such as rickshaws, bikes, and scooters. In the first half of 2023, Tata Motors, Mahindra & amp, Mahindra, and SAIC( MG ) were the top four-wheeled electric vehicle ( EV ) sellers in India. A dozen cars were also sold by Hyundai, Kia, BMW, Citroen, and BYD.

In the second quarter of 2024, Maruti Suzuki intends to begin producing electric vehicles, with Japan’s export anticipated to begin in 2025. Export to Europe are anticipated to observe, possibly through a partnership with Toyota.

By 2031, Maruti Suzuki plans to increase its annual production capacity from 2.25 million to 4.0 million vehicles, 60 % of which will be battery-electric vehicles( EVs ), 25 % hybrids, and 15 % powered by alternative fuels like gasoline-ethanol blend flex fuel and compressed natural gas.

A new shop in Kharkhoda will produce roughly 1.0 million of the 4.0 million automobiles. Maruti Suzuki, an supplier for more than 30 years, then transports gasoline-powered vehicles to about 100 nations in Asia, the Middle East, Europe, Latin America, and Africa.

The company exported more than 40 % of its total to Africa last year, up about 60 % to 116, 000 units. The Chinese will probably get a run for their money as Vehicles are likely to follow.

Follow this author on Twitter at @ ScottFo83517667.

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