Singapore’s Trade is Expected to Grow by over 50% by 2030.
The value of Singapore’s trade with 11 other major Asian markets could grow by over 50% by 2030, according to an industry study released by UPS. Clearing the Runway for Intra-Asia Trade sheds light on trade growth drivers, potential headwinds, and multistakeholder action required to unlock the 2030 opportunity.
Trade is critical to Singapore’s economy, valued at more than three times that of its gross domestic product (GDP).
As an essential hub for facilitating regional trade flows, the value of Singapore’s trade with the rest of Asia could potentially grow from USD 450 billion in 2020 to USD 679 billion also by 2030, underpinned by the country’s strategic location and strong trade relationships.
Intra-Asia trade holds incredible potential over the coming decade, built off the immense economic success that key regional economies have accomplished in recent years.
Across the Asia 12, the four segments driving the surge in intra-Asia trade are retail, industrial manufacturing and automotive (IM&A), high-tech, and healthcare.
These segments accounted for 76% of Singapore’s trade with the rest of Asia, and 75% of total intra-Asia trade in 2020.
In Singapore, the high-tech segment is a key export industry that constitutes nearly half of the country’s intra-Asia trade. It will drive future growth given the rise in digitalisation across the Asia 12 and particularly in ASEAN markets.
Singapore is well-positioned to ride this digital growth facilitated by several key trade lanes including its economic interdependence with Malaysia and potential benefits through foreign direct investment in the Vietnamese manufacturing sector.
While intra-Asia trade holds significant potential, there exist a number of barriers that, unless addressed, may stagnate trade within the Asia 12. Specifically for Singapore, as a regional trade hub that is highly dependent on the free flow of goods and people, geopolitical tensions or restrictive trade policies across Asia – including tariffs and other punitive measures – could impact its long-term trade prospects.
Hence, multistakeholder action is required to reduce impediments to regional trade and harness the opportunities to steer intra-Asia trade towards take-off.
Three key actions that can be taken include digitalising completely, diversifying supply chains and promoting the integration of MSMEs (micro-, small-, and medium-sized enterprises) into regional supply chains.
Singapore has consistently made strategic moves to position itself as an essential hub for regional trade flows.
Source: The Load Star