APAC Tech Policy 2025 and the Drive for AI Leadership and Regional Resilience
by Simantini Ray, Giacomo Pozzi, Michail Hytiroglou, Barbara Christopoulou, and Praktiti Sadhotra, FiscalNote
Explore current trends shaping the APAC tech policy landscape in critical areas, including AI governance, cybersecurity, and data protection across major regional economies.
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The Asia-Pacific region (APAC) has emerged as a global leader in technology, driven by breakthroughs in key technologies. These include artificial intelligence (AI) and 5G, a thriving startup ecosystem, massive investments in digital infrastructure, and robust manufacturing and supply chain capabilities.
As technology advancements accelerate across the continent, governments are intensifying efforts to craft policies to both seize these opportunities and manage risks, including data privacy, cybersecurity threats, and the ethical implications of emerging AI.
In 2025, APAC governments are making efforts to craft distinct AI national strategies to achieve or maintain leadership in this field. In China, AI companies and startups such as DeepSeek are challenging the dominance of U.S. tech giants like OpenAI. At the same time, Beijing is pushing to impose itself as a global AI rulemaker. Japan aims to be an ‘AI-friendly’ leader by striking a balance between innovation and risk mitigation through flexible, non-binding regulations, while also seeking to exert influence in global AI governance. South Korea is focused on bolstering its domestic AI industry while also addressing concerns such as data privacy and intellectual property rights. In Southeast Asia, the Philippines plans to introduce an AI regulatory framework during its ASEAN chairmanship in 2026. Singapore's digital framework is also gradually shifting from foundational infrastructure and regulation towards the governance of more complex digital ecosystems, such as AI.
Additionally, the advent of U.S. tariffs, as well as the ongoing U.S.-China trade war, is impacting Asia's policy tech landscape. Governments are navigating a complex balancing act: they want to attract foreign investment and become leaders in cutting-edge technologies while protecting their national security and mitigating the effects of trade competition. In this context, Malaysia is attracting massive investments from U.S. tech giants to build data centres. However, it faces U.S. scrutiny due to its close trade ties with China.
Besides trade tensions, the region has become a major target for cyberattacks over the past few years, largely due to its rapidly growing digital economy and high internet penetration. As a result, governments are prioritising crafting policies to enhance cybersecurity resilience, such as Taiwan, which has passed a national plan to strengthen the information and communication security of the country’s critical infrastructure. Similarly, to counter digital fraud and money laundering, India has also passed a landmark legislation to prohibit online gambling in the country.
The report will analyse current trends shaping the APAC tech policy landscape in critical areas, including AI governance, cybersecurity, and data protection across major regional economies. As the trade environment becomes increasingly unpredictable and tech regulation emerges as a top priority for governments, global businesses must stay informed while navigating this rapidly changing landscape to mitigate risk and capitalize on opportunities.
East Asia
China pushes to become an AI powerhouse and global rulemaker
Over the past few years, China has emerged as a major player in AI, thanks to a synergistic relationship between the government and the private sector, as well as a long-term policy vision. In 2017, the State Council released the Next Generation Artificial Intelligence Development Plan, defining AI as a national priority, to make China a world-leading AI innovation centre by 2030. In 2025, emerging Chinese companies have made significant waves by releasing innovative, open-source, and efficient large language models (LLMs). The startup DeepSeek has released its LLM, R1, which has achieved performance metrics comparable to those of flagship models from leading U.S. companies, such as OpenAI. In this context, the Chinese government is taking further steps to develop its AI ecosystem, aiming to further enhance its competitiveness.
In April 2025, during a Politburo study session focused on AI, President Xi Jinping urged the nation to achieve “self-reliance and self-strengthening” in the AI sector by building an “independent” and “controllable” ecosystem across hardware and software. He also emphasised that AI should be backed by comprehensive policy support, which should include intellectual property rights, fiscal and taxation policies, government procurement, and the opening of new facilities. This is part of Beijing's strategy to break free from U.S. technological reliance and empower AI companies through strong governmental support.
On July 26, the State Council released the Artificial Intelligence Global Governance Action Plan, which Premier Li Qiang announced at the 2025 World AI Conference in Shanghai. This plan represents China's most comprehensive policy to date, defining AI as a ‘public good’ that benefits humanity. Specifically, the plan pushes for international cooperation to position China as a global AI-rulemaker.
The plan’s key points include shaping international standards by engaging with international organisations like the United Nations’ International Telecommunication Union (ITU) to create technical and ethical rules; supporting the Global South in developing digital infrastructure, including data centers; advocating for sustainable AI by supporting environmentally friendly AI development models as well as promoting green computing technologies, including low-power chips. This signals China's strategic priority to shape the global AI framework by leveraging its technological and economic power, aiming at positioning itself as an alternative to the U.S. and Europe.
Japan pushes for a more competitive digital market
In May 2025, the Japanese parliament enacted the country’s first dedicated law governing AI, aiming to become the most AI-friendly country by striking a balance between innovation and risk management. The new law is expected to create new data privacy-related obligations for tech companies in the country, while also serving as a model for other large economies in the APAC region.
With the new law, the government seeks to systematically promote policies related to the research, development, and utilisation of AI-related technologies. To achieve this, the law outlines basic principles, plans, and other fundamental measures, including the establishment of a new authority, the AI Strategy Headquarters. The act outlines the responsibilities of AI-utilising businesses, requiring them to cooperate with government measures, improve the efficiency and sophistication of their activities, and create new industries through the use of AI-related technologies.
Although there are no explicit penalties provided for violations of these obligations, the government has highlighted that it will conduct investigations and take corrective measures, and in cases of malicious practices, could even publicise the names of violating businesses.
Despite claims by the Japanese government of proactively managing AI risks and ethical considerations, the lack of penalty provisions has been criticised, as it indicates that they are choosing to avoid over-regulation of the sector. Japan’s business-friendly approach to AI legislation, which diverges from the EU's ethics-focused regulatory approach, however, will prove more attractive to countries in the APAC region, which typically prioritise innovation and ease of access.
On the digital competition front, the government continues to gradually implement last year’s Act on Promotion of Competition for Specified Smartphone Software (SSCPA), with the full act expected to come into effect on December 18, 2025. This SSCPA enforces Japan’s first ex-ante competition policy, aligning with similar global initiatives, including the EU’s Digital Markets Act (DMA) and the UK's Digital Markets, Competition and Consumers Act.
Notably, in March 2025, key U.S. tech giants were designated as the targeted businesses of the SSCPA, with the Japan Fair Trade Commission (JFTC) now publishing regulations to prevent these entities from blocking market entry for other companies or giving preferential treatment to their own services through their smartphone software. Overall, the regulations are expected to have far-reaching implications on the smartphone software market in Japan. It also signals the government’s priority of creating a more equitable landscape for all software providers, including smaller tech firms, while cracking down on tech giants to protect consumers and ensure fair competition.
Taiwan enhances cybersecurity resilience and data protection
In 2024, daily cyberattacks on government networks doubled to 2.4 million, with over 80 percent of major incidents targeting government agencies and critical infrastructure. In this context, sectors such as telecommunications, transportation, and defence remain particularly vulnerable. For this reason, Taiwan has been actively strengthening its cybersecurity posture through significant legislative and regulatory changes.
On April 8, 2025, the National Security Council (NSC) published its 2025 cybersecurity strategy, highlighting that Taiwan is facing challenges from cybercrimes, including state-sponsored hacking, potential threats from AI and quantum technology, ransomware attacks, and intellectual property espionage. Against this backdrop, the strategy calls for increased cybersecurity capabilities and for enhanced international cybersecurity cooperation partnerships. Most importantly, the strategy includes establishing a national centre to monitor security risks, which was followed by the Cabinet's approval of the National Cybersecurity Development Program (2025-2028), the seventh such plan since 2001. The plan allocates $290 million USD to counter cyber threats, focusing on four key pillars: national preparedness, infrastructure risk reduction, cybersecurity industry development, and the integration of AI for threat detection and response. These initiatives mark a shift toward a more proactive and financially robust cybersecurity posture, especially amid increased cyber threats from state-sponsored hackers from China.
On the data privacy front, in March 2025, the Cabinet approved a draft amendment to the Personal Data Protection Act (PDPA), which is now under review by the legislature. This 2025 amendment will significantly strengthen Taiwan's data protection framework for both public and private sectors. A key change is the introduction of a dedicated data protection officer role within public agencies to ensure compliance with new regulations. Additionally, the amendment designates the Personal Data Protection Commission (PDPC) as the unified data protection supervisory authority for private entities.
South Korea seeks to balance the domestic AI industry’s international competitiveness
In December 2024, South Korea approved the ‘Framework Act on the Development of Artificial Intelligence and Creation of a Trust Foundation’, an overarching law establishing a comprehensive framework for the future development of the AI industry in the country. The law emphasises safety and ethics, mandating the creation of an AI safety research institute and encouraging the establishment of ethics committees. As the act is set to enter into force in January 2026, legislators wishing to balance international South Korean AI competitiveness with data privacy and copyright concerns have not sat idle. In recent months, they have introduced a number of bills to amend parts of the law.
On 28 July 2025, MPs from the ruling Democratic Party of Korea proposed a bill that would expand the use of AI throughout the public sector, potentially impacting future procurement competitions and contracts. According to the bill, when government agencies purchase products or services, they would be required to give priority to AI products or services. This highlights the government's commitment to leveraging the public sector to drive the early adoption and development of AI. Another proposal, submitted on June 17 by MPs from the minority People's Power Party, seeks to strengthen copyright protections for creators whose work is used for AI machine learning purposes. These would require AI product providers to establish clear procedures through which copyright holders can request and verify if their work was used to train generative AI. This would strike a balance between AI development and the protection of creator rights.
As the enforcement date of the AI law approaches, the debate in South Korea's National Assembly is poised to intensify. Both the government and the opposition are internally divided, with factions variously proposing either business-friendly deregulation measures or stricter protections for users and creators.
South East Asia
Malaysia’s data centre and cloud computing dreams threatened by US tariffs and restrictions
Malaysia emerged as a semiconductor hub as early as the 1970s and has since been recognized for its openness to foreign investment and international trade. In 2024, the country solidified its position in the AI ecosystem, attracting $16.8 billion USD in investments from prominent U.S. tech giants, including Amazon, Microsoft, Google, and Nvidia, as well as China’s ByteDance, to develop AI technology and data centres.
The country is betting big that data centres will modernise its economy and create thousands of high-paying jobs, allowing the country to reach a high-income status that has long eluded it. The country has also assumed ASEAN leadership this year, aiming to spearhead efforts to develop digital frameworks for Southeast Asia and strengthen the region's burgeoning digital economy. Despite recent strides in the technology sector, certain challenges about infrastructure and energy sustainability, as well as the impacts of U.S. tariffs and trade restriction measures, remain.
In August 2025, the Malaysian Ministry of Digital launched the National Cloud Computing Policy (NCCP), as the country’s first policy framework for guiding cloud adoption across the digital ecosystem. The policy outlines a comprehensive roadmap for cloud adoption, aiming to modernise public services, enhance private sector competitiveness, strengthen data security, and promote inclusivity, while positioning Malaysia as a regional digital hub by 2030.
Furthermore, Prime Minister Anwar Ibrahim also unveiled the 13th Malaysia Plan (RMK13), a five-year roadmap from 2026 to 2031, themed around ‘Redesigning Development’ and aimed at elevating the quality of life for all Malaysian citizens. The plan aims to increase the country’s economic complexity through digitalisation and AI initiatives, to achieve developed nation status by 2030. To boost high-growth, high-value strategic sectors, PM Ibrahim said that he is looking at increasing Malaysia’s electronic and electrical product exports to RM1 trillion in 2030, from RM600 billion in 2024, through initiatives such as the High Value-High Technology Semiconductor Industry Flagship project, the establishment of a National Data Bank, and the deployment of digital twin technology to provide real-time modelling capabilities. Overall, the ambitious plan underscores the government's commitment to transforming Malaysia into a developed country and a regional hub for digital technology innovation by the end of this decade, which is expected to prove highly lucrative for businesses operating in the country.
Despite the positive developments, Malaysia’s technology industry remains concerned about the potential impacts of U.S. tariffs and restrictions, particularly given the country's historically strong relationship with China. The government has recently come under pressure from the US to regulate its trade flows more effectively, following a recent controversy concerning the alleged transfer of U.S.-sanctioned AI chips to China by fraudulently marking Malaysia as the final destination. To placate U.S. counterparts and avoid further restrictions, the Malaysian government has been taking several steps to protect the country’s export credibility and trade flows, including now requiring a strict ministry permit for the export of AI chips of U.S. origin, as well as considering the inclusion of these chips into its Strategic Items List. The country is expected to continue this balancing act in the future, given its desire to maintain favourable relations with both China and the U.S.
New session of Philippines Congress sees sweeping deepfake and AI regulatory proposals
Lawmakers in the Philippines have introduced a wave of legislative proposals aimed at curbing the misuse of AI and deepfake technologies, as concern grows over disinformation, online exploitation, identity theft, and election interference. A surge of bills across both chambers of Congress reflects growing political will to establish a comprehensive legal framework that balances digital transformation with accountability.
Some proposals focus on establishing clear rules for the creation and dissemination of deepfakes and recognising individual rights over images, voices, and identities. They seek to outlaw non-consensual deepfakes, impose mandatory labelling for AI-generated content, and grant victims the right to demand takedowns or pursue damages. For major digital platforms, they would introduce strict obligations, requiring takedowns of flagged deepfake content, alongside public disclosure logs of removals.
Other legislative efforts target digital campaigning and political advertising. They propose to empower the Commission on Elections (COMELEC) to supervise online political activity, requiring campaigns to register official accounts, label AI-driven materials, and disclose sponsored digital content. They would also restrict the use of bots, fake accounts, deepfakes, and microtargeting practices. Some lawmakers go even further, introducing measures that would allow the public to directly flag relevant content via digital channels operated by the government.
Beyond immediate harms, some bills aim to establish a broader AI governance framework, such as promoting the ethical use of AI in labor, education, and public services, while establishing grievance mechanisms for those adversely affected by automated decision-making. Lawmakers also propose the creation of a dedicated AI regulatory body to certify developers, enforce compliance, and align Philippine AI policy with international best practices.
As many bills include similar provisions on these matters, it is expected that after consideration in their respective Committees, these proposals will be incorporated in or substituted by consolidated bills that will be discussed in both chambers.
The convergence of these proposals reflects growing recognition among Philippine lawmakers of both the promise and peril of AI. If passed, these new regulations could position the country among the first Southeast Asian nations with a robust legal framework for deepfakes and AI governance. The Philippines intends to put forward an AI regulatory framework during its ASEAN chairmanship in 2026, and the current proposals may provide an early indication of its likely direction. For technology companies and digital online platforms, however, the measures would introduce far-reaching obligations on content moderation, transparency, and accountability, together with significant penalties for non-compliance.
Singapore moves to balance digital economy growth with stronger governance
In March 2025, Singapore’s leading trade association in the tech industry launched the TechConnect Asia initiative to connect overseas tech companies with Singapore’s ecosystem. The goal was to build capabilities and strengthen the region through collaboration. Ranked first in digital infrastructure in the Asian Digital Transformation Index, Singapore’s digital growth is paving a path for other Asian nations to follow with their own digital transformations. Interestingly, alongside its position as a global financial centre, Singapore’s digital economy has grown at an estimated annual rate of 12.9 percent since 2017, contributing over 17 percent of its GDP in 2022 and becoming a pillar of the island’s economy.
To discourage malicious use and promote the safe use of advanced technology, the Singapore government has implemented various initiatives and laws to promote responsible use. Acts such as the Computer Misuse (Amendment) Act 2023 and the Cybersecurity Act 2018 prevent the misuse of Singpass (the national digital identity), as sharing credentials would lead to a fine of S$10,000 or imprisonment for up to three years or both. The Cybersecurity Act empowers agencies such as the Cyber Security Agency to examine Critical Infrastructure Information, request compliance records, and levy penalties in the event of an offence.
Additionally, to ensure public safety and security, the Personal Data Protection Act 2012 affects organisations whose products or services are accessed by children under 18. It ensures responsible data processing, including obtaining permission, providing data protection, and maintaining compliance. The use of personal data in AI systems is also covered. Telecom firms and banks are required to implement anti-scam strategies and promote public awareness of secure online behaviours.
Singapore's digital framework is gradually moving from foundational infrastructure and regulation towards governance of more complex digital ecosystems. With existing laws and strategic policy planning already established, the next phase may involve a greater emphasis on areas such as AI oversight, digital ethics, and international alignment.
South Asia
India bans vast online gaming industry, but continues to hold AI and tech manufacturing aspirations
In a landmark move, the Indian government has prohibited online gambling in the country, shuttering down a multi-billion-dollar industry in an attempt to curb addiction, financial ruin, and social distress. On 21 August, the parliament passed the sweeping ‘Promotion and Regulation of Online Gaming Bill, 2025’ just one day after it was introduced. The speed with which this bill has been introduced and passed has been a shocking development for India’s online gaming industry, which is one of the largest markets in the world. The ban affects platforms for card games, poker, and fantasy sports, including the country’s highly popular fantasy cricket apps.
The government justified the sudden ban by arguing that roughly a third of the country’s population had lost money gambling online, and linking the industry to larger crimes such as fraud, money laundering, and terrorism financing. While the new law prohibits real-money games, the government has clarified that it will continue to promote esports, educational games, and casual gaming as part of India’s digital economy. As it marks a reversal from the government’s consistent stance of fostering the gaming industry, the blanket ban, which has been criticised by industry stakeholders for being disproportionate, is expected to harm India’s reputation as a pro-business environment, especially in the digital and tech landscape.
Meanwhile, the Indian government continues to harbour significant AI and tech manufacturing ambitions, with the 2025 budget promising to establish a National Manufacturing Mission and advance key sectors, including AI, internet connectivity, trade facilitation, lithium-ion battery production, and nuclear energy. In April 2025, the Ministry of Electronics and Information Technology announced a new production-linked incentive (PLI) scheme for electronics component manufacturing, intending to strengthen India’s position as a global hub for electronics manufacturing. The scheme has a total budget outlay of $2 million USD and focuses on passive electronic components. The ministry highlighted that the scheme is designed as a horizontal initiative with benefits spanning multiple sectors such as consumer electronics, automobiles, power electronics, and electrical grids. This move by the Indian government comes in the wake of steep U.S. tariffs against India, and as such, may apparently be an effort to soften the blow and help the country’s electronics manufacturers.
As India continues to grapple with the U.S. administration’s tariff regime, the government has demonstrated its commitment to finding alternative trading partners and diversifying its supply chains to increase trade resilience. Notably, the government announced the signing of a Free Trade Agreement (FTA) with the UK after nearly a decade of negotiations, covering a wide range of goods and services, including consumer goods, electrical machinery, and automobiles.
The FTA is expected to have a significant impact on Indian markets, introducing greater competition while also lowering import costs for industrial machinery and technology components. The FTA will also open new pathways for investment and cooperation in strategic areas such as digital infrastructure, advanced manufacturing, clean energy, medtech, and AI, with long-term economic implications estimated to be profound.
Key Takeaways and Strategic Implications
This year has proved to be pivotal for technology and AI policy across the APAC region. Recognising the immense potential of emerging technologies such as AI and cloud computing, nations are actively implementing incentives and strategies to leverage these advancements and foster innovation. Furthermore, governments are proactively addressing risks and advocating for ethical development through participation in international rulemaking for these technologies. This includes establishing guidelines and standards to ensure alignment and interoperability among diverse AI systems.
Crucially, the U.S. administration’s unpredictable tariff regime has also resulted in a paradigm shift. As many countries in the APAC region have historically relied on export-led growth, with the U.S. playing a crucial role as a major market, tariffs have pushed Asian governments to negotiate and created pressure for them to take steps in U.S. interests. However, more significantly, the tariff crisis has also served as a wake-up call for APAC nations, underscoring the need for further regionalism and resilience.
ASEAN meetings this year, under Malaysia’s chairmanship, have indicated a shift towards regional solidarity, with Malaysian leader Anwar Ibrahim explicitly calling for the need to ‘fortify foundations, trade among ourselves, and invest more in one another as we navigate external pressures.’ This resolution for ASEAN to break away from a ‘business-as-usual’ approach and adopt bolder, more forward-looking strategies could safeguard and advance ASEAN’s socio-economic interests in the future, especially protecting its burgeoning manufacturing and data centre industry.
The shifting geopolitical dynamics in the aftermath of Trump’s tariffs have also led to a warming of relations between the Indian and Chinese governments. Traditionally considered adversaries, the governments of these two countries have begun meeting diplomatically and have already announced bilateral confidence-building measures, including the resumption of direct flights and border trade facilitation. Meanwhile, despite historical and territorial disputes, the foreign ministers of Japan, South Korea, and China agreed on the need to seek common ground on East Asian security and economic issues, given escalating global uncertainty.
These favourable developments highlight the growing trend this year of APAC nations increasing cooperation and looking towards regional trade and partnership opportunities to counter the volatility of U.S. trade policy, as well as its technological dominance. A stronger, more resilient regional environment in the Asia-Pacific will significantly benefit companies seeking to diversify their supply chains amid the tense and fragmented global economic landscape.
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