Singapore’s intra-Asia trade value set for 50% growth by 2030: report
High-tech segment will drive this trade growth.
With its strategic location and strong trade relationships, UPS said the value of Singapore’s trade with 11 other major Asian markets will likely grow by over 50% to US$679b by 2030.
In 2022, Singapore's intra-Asia trade value was US$450b.
What will further push Singapore to achieve this growth in trade value is the high-tech segment.
According to UPS, the segment constitutes nearly half of the country’s intra-Asia trade.
“It will drive future growth given the rise in digitalisation across 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,” UPS said.
Apart from the high-tech segment, other key industries that drive the surge in intra-Asia trade are retail, industrial, manufacturing and automotive (IM&A). These four segments accounted for 76% of Singapore’s trade with the rest of Asia, and 75% of total intra-Asia trade in 2020.
UPS, however, underscored that there are still barriers in intra-Asia trade that need to be addressed.
Singapore, for example, is highly dependent on the free flow of goods and people, which is why geopolitical tensions or restrictive trade policies across Asia, including tariffs and other punitive measures, could impact its long-term trade prospects.
“A multistakeholder action is required to reduce impediments to regional trade and harness the opportunities to steer intra-Asia trade towards take-off. Singapore-based stakeholders and businesses with trade interests in Asia must build resilience against potential headwinds while at the same time being ready to capture opportunities presented by the growth in intra-Asia trade,” UPS said.
“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,” it added.