Singapore is one of the world’s largest trading countries. Thanks to its location, it is a prominent trading hub, and a world financial center. Singapore’s trading patter is certainly unique. Since, it is a prominent trading hub, a large amount of its exports tend to be re-exports. Further, Singapore’s technological and industrial capabilities allow it to import raw materials, and refine them into more useable products that are then exported to, mainly, its neighboring countries, and the rest of the world. Due to this advantage, Singapore’s positive trade balance has allowed this island city-state to become the world’s 15th largest importer and 14th largest exporter.
This simple and understated introduction doesn’t do the Singaporean economy justice. The numbers found in the trade table offered by the International Trade Statistics Yearbook almost have one believe they must be wrong. Broadly speaking, Singapore’s positive trade balance has been enjoying a magnificent upward climb. At the dawn of the 21st century, Singapore’s trade balance stood at a positive and healthy $3.26bn. However, it rose to $41.1bn by the end of 2010. The increase is a staggering 1160%. The Singaporean economy has been performing so well due to the increase in exports to neighboring and close countries like Malaysia, Indonesia, China and India.
Malaysia, for example, managed to overtake the United States as number one destination for Singaporean products. Singapore’s exports to Malaysia increased by 68% from 2000 to 2010. Exports also grew to Hong Kong, China, and Indonesia that all these countries have overtaken the United States. In fact, exports saw such a meteoric rise to Indonesia that from 2004 (the earliest year for which data is available) until 2010, they grew 240%. A similar story can be told of exports to India, which grew by 377% from 2000 to 2010. Singapore seems to have found a niche in exporting to these countries, and have exploited this niche very well. Also, one can attribute this to the rising purchasing power of Singapore’s neighbors. Differently, exports to the United States shrunk by 4%. This in all likelihood didn’t affect Singapore at all, in light of the increases in exports to the aforementioned countries.
In terms of imports, the case of Singaporean re-exports becomes clear. The largest exporter to Singapore is Malaysia. In 2010, imports from Malaysia stood at USD 36.3bn, an 80% increase from the year 2000, in which the value of imports was USD 22.8bn. Similarly, imports have increased strongly to countries such as the United States (75%), from USD 20.bn to USD 35.9bn; Mainland China (373%), from USD 7.1bn to USD 33.6bn; and Japan (5%), from USD 23.1bn to USD 24.4bn. Returning to Malaysia, it’s importance to Singapore can’t be understated. 12% of Singapore’s imports come from Malaysia, and 12% of exports go to Malaysia, highlighting their reliance on each other as trade partners.
It is important to note that Singapore’s exports and imports have been growing particularly strongly within its region. The rise of Mainland China, Hong Kong and Indonesia as major trade partners in the first decade of the 21st century shows that Singapore is not only doing business within its region but also using the economic growth of others to grow its own economy.
In the commodities and products trade, Singapore’s trade is a unique case indeed. In many of the categories and sub categories of commodities, Singapore exports, value, more than it imports. Again, this underscores the technological and industrial prowess of the country, as its role in trade is simply to add value to what it imports, and then export it. Frankly, it no longer acts as just a port between the East and the West. For example, Singapore imports USD 24bn worth of crude petroleum, and exports no crude petroleum at all. The category 3330, for crude oils, doesn’t even exist in the exports table. It also exports more than half of the non crude oils it imports. Meanwhile, Singapore in 2010 exported USD 4.5bn worth of civil engineering equipment (category 723). This is a positive change from 2000, when it exported USD 0.8bn and imported almost exactly the same amount. Differently, they import USD 57.6bn in transistors and microcircuits, and export an astonishing USD 86.3bn in transistors and microcircuits (category 776), adding nearly 30% of value to the larger Electric equipment category (category 77). In 2000, categories 77 and 776, only added 13% of value between import and export.
Two of the categories at the tables’ tale end are 931 and 9310, which are described as “Special transaction and commodities not classified according to kind.” According to Professor Craig, and other documents found online, these categories usually include confidential information that are usually lumped together in 931 and 9310. However, in Singapore’s case, these two categories alone accounted for 34% of total exports in 2010. Further, category 9310 recorded a simply enormous 8468% increase from the year 2000. The value of exports of item 9310 in 2000 was only USD 1.1bn, and it rose to USD 94.5bn by 2010, again, a whopping 8468% increase. In 2010, item 9310 accounted for 26% of total export.
Despite the ambiguity of items 931 and 9310, Singapore’s trade pattern, and its rise, is genuinely amazing. Singapore positioned itself to increasingly specialize in technology- and capital-intensive industries. These, also, have higher returns than exporting raw materials, or simply accepting a role as a trading post. However, Singapore didn’t stop at that. The country took advantage of its economic rise and geographic location to become the world’s fourth largest financial center, which led to a staggering increase in income to the country.