- The value of Singapore’s trade with 11 other major Asian markets expected to grow more than 50% by 2030, says UPS study
- Singapore’s high-tech segment, along with strategic location and strong trade ties, has the potential to fuel trade growth in the next decade, according to the study
- As an essential hub for facilitating regional trade flows, Singapore’s trade with the rest of the Asia 12 could potentially grow from US$450 billion in 2020 to $679 billion by 2030
Singapore’s trade with 11 other major Asian markets could grow more than 50% to US$679 billion by 2030, according to an industry study released by UPS on March 21.
The study, “Clearing the Runway for Intra-Asia Trade,” sheds light on trade growth drivers, potential headwinds, and multi-stakeholder action required to unlock the 2030 opportunity. (Download the UPS intra-Asia study here.)
Singapore’s trade with major Asian markets set for 50% boost
Trade in 12 key markets – Australia, China, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam – referred to in the report as the Asia 12, accounts for 88% of intra-Asia trade today, the report says.
The trade value of the Asia 12 markets could more than double from US$6.4 trillion in 2020 to $13.5 trillion in 2030.
Trade is critical to Singapore’s economy, which is valued at more than three times its gross domestic product (GDP).
As an essential hub for facilitating regional trade flows, the value of Singapore’s trade with the rest of the Asia 12 could potentially grow from $450 billion in 2020 to $679 billion also by 2030, underpinned by the country’s strategic location and strong trade relationships, UPS estimates.
Intra-Asia trade holds incredible potential over the next decade, built off the immense economic success that key regional economies have accomplished in recent years.
Through the strength of UPS’s global network and extensive customs brokerage expertise, the company has been helping Asian governments, industry partners, and customers navigate global trade over the last five decades.
This report combines that expertise with fresh insights to explore opportunities and challenges in intra-Asia trade over the coming 10 years and beyond.
High-tech segment will drive Singapore’s trade growth
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, the study says. The sector will drive future growth given the rise in digitalization 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.
Multi-stakeholder effort needed to unlock Singapore’s trade potential
While intra-Asia trade holds significant potential, there exist a number of barriers that, unless addressed, may cause trade within the Asia 12 to stagnate. 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, multi-stakeholder action is required to reduce impediments to regional trade and harness the opportunities to steer intra-Asia trade towards take-off, the study recommends.
It says Singapore-based stakeholders and businesses with trade interests in Asia must build resilience against potential headwinds while getting ready to capture opportunities presented by the growth in intra-Asia trade.
Three key actions that can be taken include digitalizing completely, diversifying supply chains and promoting the integration of micro-, small-, and medium-sized enterprises (MSMEs) into regional supply chains, the study says.
“Small businesses are vital to the Singapore economy, and this report highlights the importance of making sure all businesses get the support they need so that the full potential of intra-Asia trade can be realized over the next decade,” said Chika Imakita, managing director of UPS Singapore.
“At the macro level, Singapore has consistently made strategic moves to position itself as an essential hub for regional trade flows. Our role at UPS is to combine our suite of digital, small business-ready solutions with our expertise in customs brokerage and supply chain mapping to ensure our customers continue to optimize the current trade environment in a way that keeps them profitable, successful and sustainable for the long term.”
UPS is one of the world’s largest companies, with 2022 revenue of $100.3 billion, and provides a broad range of integrated logistics solutions for customers in more than 220 countries and territories.
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