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Editor's Note: In Southeast Asia, a competition over the construction of financial centers is quietly unfolding. From Indonesia's plan to transform the tourist destination Bali into a financial hub comparable to Dubai, to Vietnam's ambitious construction of the "Da Nang - Ho Chi Minh City" twin-city financial center, and to the competition among established financial centers such as Singapore and Bangkok, many ASEAN countries are vigorously promoting their financial strategic layouts. These measures are not only aimed at attracting international capital and revitalizing their economies, but also attempting to secure a place in the global financial landscape.

Indonesia: Transforming Bali from a tourist destination into a financial center

Bloomberg reported on the 12th that according to informed sources, Indonesia plans to establish a financial center in the tourist destination Bali, aiming to attract international banks, asset management companies, and private equity firms to boost the country's economy. However, the Indonesian government has not officially announced this plan yet.

The report said that Indonesian President Prabowo supports using the International Financial Technology City in Gujarat, India (referred to as GIFT City) and the Dubai International Financial Center in the United Arab Emirates as blueprints to plan the financial center of Bali. This financial center will offer tax and regulatory exemptions and simplify the approval process. The complex procedures and bureaucratic system, which have long been criticized by enterprises seeking to enter this largest economy in Southeast Asia, are the reason why the Indonesian government plans to implement different legal frameworks in the financial center, possibly adopting the system of Singapore.

Related reports said that currently, the relevant departments such as the Ministry of Finance and the National Economic Committee of Indonesia are drafting a proposal draft and are scheduled to submit it to the parliament for voting at the end of the year.

Indonesian media such as the Jakarta Globe reported that in May 2024, then Minister of Maritime and Investment Coordinating Luhtu delivered a speech at the 10th World Water Forum held in Bali, saying: "We encourage Bali to become a family office center like Hong Kong and Singapore." After that, Luhtu has been vigorously promoting this plan to be implemented as soon as possible. In October 2024, after Prabowo took office as president, Luhtu was appointed as the chairman of the National Economic Committee. He proposed to launch this plan in February 2025. According to the "Invest in Indonesia" website, Luhtu emphasized the necessity of accelerating the implementation of the above plan. In January this year, he said: "I hope to act quickly. We have been studying for a long time." Luhtu emphasized that this move is expected to make Indonesia a global leading wealth management center.

"The government hopes to create a transparent modern financial center to support national economic development," said Jodi Mahati, a spokesperson for the National Economic Committee of Indonesia. "It is expected that this financial center will become a platform for the connection between global capital and the Indonesian entity sector."

Vietnam: Building a Dual-City International Financial Center

"Vietnam is pursuing its dream of becoming an international financial center." According to the Nikkei Asian Review, in the tourist destination of Da Nang, there are five planned artificial islands, whose design inspiration comes from the Palm Islands in Dubai. Vietnam plans to jointly build Da Nang and Ho Chi Minh City into an international financial center, forming a north-south strategic layout.

The VNA reported that building an international financial center is part of Vietnam's efforts to position itself as a regional financial center alongside Singapore and Hong Kong. However, discussions on creating an international financial center in Vietnam have lasted for more than a decade, but early efforts have always faced challenges such as unclear regulations and regional competition, resulting in limited actual progress. Ho Chi Minh City has the country's largest stock market - the Ho Chi Minh Stock Exchange, but due to all restrictions and underdeveloped capital markets, foreign investment participation is still limited.

Vietnamese officials hope that a financial center with clearer rules and foreign investor incentives will help attract global banks, funds, and insurance companies.

Richard McClellan, the vice chairman of the Da Nang International Financial Center Advisory Committee, said: "Although the idea of establishing an international financial center in Vietnam has been discussed for many years, the real momentum for advancement has gradually formed in the past 12 to 18 months. This transformation not only reflects the increasing political will at the top level, but also benefits from clearer laws and institutional frameworks. Vietnam's recent pace of action indicates that it is serious about turning international financial centers from concepts into reality."

Analysts believe that although Vietnam's ambition is impressive, it will face fierce competition from Singapore and Hong Kong, which have firmly occupied the position of Asian financial gateways. Analysts also said that success will depend on whether Vietnam can carry out regulatory reforms, deepen capital market reforms, and build trust with international investors.

"There are both domestic and international driving forces"

Not only Indonesia and Vietnam, but many other ASEAN countries are competing to build attractive financial centers. The "investingLive" website of Cyprus stated that Southeast Asia is renowned for its rapidly developing economies. The financial centers in this region facilitate international trade, attract investors, and serve as a bridge between Southeast Asia and global markets. They help promote economic growth and international trade. The efforts made by Southeast Asian financial centers in infrastructure investment, regulatory reforms, and new technologies are making them stronger and more globally competitive.

Financial experts said that in the construction of financial centers in Southeast Asia, Singapore is currently leading the way, but this situation may change.

The "ASEAN Briefing" website stated that Singapore has always been regarded as the top financial center in Southeast Asia, with a well-established regulatory system, first-class infrastructure, and policies conducive to business development. However, it is now facing increasingly severe challenges, which may threaten its dominant position. The rise of Bangkok, Jakarta, and Kuala Lumpur is reshaping the competitive landscape. These cities are actively expanding their presence in the banking and fintech sectors.

The rapidly expanding capital market in Bangkok, Thailand, has attracted diversified investors. In addition to a well-developed financial infrastructure, Bangkok also boasts numerous tourist attractions and a prosperous trade center. This has enhanced Bangkok's economic vitality and significantly strengthened its position as the leading financial center in the region.

Kuala Lumpur, Malaysia, is dominated by Islamic finance, and this financial system offers various financial products that comply with Islamic law, attracting attention to Kuala Lumpur. Malaysia is the location of the world's largest Islamic bond market, with its issuance volume accounting for 42% of the global total. However, Singapore, Indonesia, the Philippines, and Thailand are also actively taking actions, leveraging digital transformation, regulatory support, and other measures to seize the growing demand in the Southeast Asian market for financial products that comply with Islamic law. [Special Correspondents for Global Times in Indonesia and Singapore Li Peisong Xin Bin Global Times Reporter Li Xun Dian]