After Hainan's customs closure

The person who is least happy has come out!

At the Bloomberg Economic Forum on November 19, Singapore's Prime Minister Lawrence Wong was unhappy [laughing] with a face full of unhidden worries, and his words all reflected anxiety - this pressure is an inevitable result of the change in regional trade patterns! It's easy to understand Wong's concerns. Singapore has always relied on the transit advantage of the Strait of Malacca, with its total foreign trade volume accounting for over 300% of GDP in 2024, of which 90% are re-export trades, basically relying on this bowl of rice.

This time, Hainan's customs closure is not just for show. According to the public notice from the Hainan Provincial Government, 6,600 tariff items have achieved zero tariffs, covering 74% of goods, more than three times the previous number of tariff items. The corporate income tax rate is 15%, two percentage points lower than Singapore's, and this policy strength is solid.

The changes at Yangpu Port best illustrate the issue. The Yangpu Economic Development Zone Management Committee previously released a set of data: freight volume directly sailing to Indonesia increased by 78% in the first ten months of 2025, while the transshipment volume from Singapore to Indonesia dropped by 23% during the same period. A direct flight from Jakarta to Yangpu takes only 6 days, saving more than 30 days compared to transiting through Singapore. Who wouldn't choose the one that saves time?

Golden Group from Indonesia had already moved its factory to Yangpu. According to the company's public statement, it saved $120 million in annual transshipment costs. The amount of bonded fuel added at Yangpu in the first three quarters increased by 210%, and many ships registered in Singapore have switched to the "China Yangpu Port" flag.

At the forum, Wong called on China and Japan to ease the dispute, hoping to put historical issues aside and look to the future, which is also for the consideration of regional stability, but Singapore's transit business is truly feeling the impact. The proportion of goods imported from Southeast Asia via Singapore as a transit point has dropped from 82% eight years ago to 45%.

Hainan's advantages are not only in policies, but geography and market are the real backbone. Backed by a market of 1.4 billion people, facing a four-hour flight circle in Southeast Asia, plus the policy of 30% processing and value-added tax exemption, enterprise costs drop immediately.

In 2024, the shopping amount of Hainan island-exit duty-free reached 30.94 billion yuan (a real data from Haikou Customs), according to Hainan's plan to boost consumption, the sales target is expected to exceed 60 billion yuan by 2027. This dual advantage of "openness + cost" is something Singapore's model of making a living through transit can't match.

Wong's anxiety is essentially the subtle reshuffling of the regional trade pattern. Hainan's customs closure is not to replace anyone, but to give the market another more efficient choice. If you can't keep up with the pace, naturally there will be pressure, and it would be the same for anyone else.

What do you readers think? Welcome to discuss in the comments section.

Original article: toutiao.com/article/1851886154980352/

Statement: This article represents the views of the author himself.