This Week in Asia #8: Pockets of Growth in Southeast Asia

This Week in Asia #8: Pockets of Growth in Southeast Asia
Here are the key stories in week 8 of 2024: the Chinese government takes the first step to prop up their economy, the Chinese EV war's first casualty: HiPhi, why GoTo + Grab is a bad idea and McKinsey's report on Southeast Asia growth.

We are moving up our newsletter now to Wednesday weekly. In our 8th issue, the story is on Southeast Asia's macroeconomic growth from a McKinsey report taking a snapshot of the economies in Q3 2023 last year. We have seen the first steps by the Chinese government issued the largest cut to key mortgage rates, examples of Chinese tech giants looking for growth outside China, for e.g. JD bidding for Currys and the EV war's first casualty, China's HiPhi. Last but not least, we recommend the Hard Truths podcast by Vertex Ventures.

What we are reading this week


  • China makes largest cut to key mortgage rate, first reduction since June a ‘step in the right direction’ to prop up economy by Luna Sun from South China Morning Post. Our Take: Initiating a move to alleviate household financial pressures and stimulate home buying, the Chinese government has deployed a key strategy. The People's Bank of China announced a reduction in the five-year loan prime rate (LPR) — a critical reference for commercial banks setting mortgage rates. This rate has been adjusted downward from 4.2% to 3.95%.
  • Chinese ecommerce group considers offer for Currys by Ivan Levingston and Laura Onita from Financial Times. Our Take: This is a sign for all China tech giants looking offshore for growth, given their domestic growth has been maximized.
  • China's HiPhi paused EV output and furloughs workers with future in doubt by Jill Shen from Technode. Our Take: The China EV low-volume car maker Human Horizons focused on the luxury segment and announced austerity measures. Increasing competition and slow growth have failed to extend their advantage in the premium EV market and now struggling in a cash crush. As a useful comparison, they delivered 8,000 units last year while their peers Li Auto and NIO delivered more than 376,000 and 160,000 units respectively, which is two orders of magnitude higher. While we are on that, BYD unveils their plan to boost brand image for global outreach and release new models of premium EVs (Source: Caixin)


  • State of venture investments in India, according to Lightspeed by Manish Singh in TechCrunch. Our Take: Here are three key things which we think are important:
    • Market Challenges: There are large volatility & regulatory challenges for the tech giants in India: Byju seeking new capital at a valuation slashed by 99% from its peak and Paytm's market capitalization falling below $3 billion.
    • Over-Fundraising Concerns: The venture capital investments dropped from $33B in 2021 to $9B in 2023 and that is a 67% drop, with the number of investments halved from 2200 in 2021 to half in 2023 indicating a cooling market. We can infer that there is a lot of dry powder but they ran out of places to deploy their funds.
    • India's position in the Global AI race: India lags in foundational AI research. In simple words, unlike China, they don't have a Lee Kai-Fu who can build a foundational large language model to compete the likes of Open AI, and the startups can dabble only in the applications layer. At least, Southeast Asia has a SEA-LION Large Language Model.

Japan, Korea, Taiwan & Hong Kong

Southeast Asia



Your Daily Zen:

Lei Xing, one of our recent guests on Analyse Asia made an interesting observation on his X (formerly known as Twitter) account. Let us know if you have any counter-examples.

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Image Credits:

The image is generated with DALLE-3 from OpenAI by the following prompt: "Generate an image of a bustling city and a booming economy in Southeast Asia" and the Gen-ID is J7N4prC2uuc1XZs. The description of the image from ChatGPT: Here is the image of a vibrant and bustling city in Southeast Asia, depicting a booming economy. It includes towering skyscrapers, busy streets with various vehicles and pedestrians, and active shops. The skyline features cranes and new construction, symbolizing economic growth, while bright billboards and neon signs illuminate the cityscape, reflecting prosperity and technological advancement. The atmosphere captured is dynamic and energetic, typical of a rapidly developing urban environment in Southeast Asia.