Chart of the Day: Will economic restructuring save Singapore’s stagnating exports?

It has languished over the past decade.

The city-state has always dominated the globe in terms of its reach, owing to its higher degree of value-added exports and its position on the higher end of electronics supply chains.

However, over the last 10 years, Singapore hasn’t shown the luster it once possessed in terms of exports, as its ASEAN’s share of overall exports has substantially declined, says HSBC.

Meanwhile, analysts from HSBC argue that Singapore benefits more from ASEAN integration in the services space rather than the goods trade.

HSBC also cites the economic restructuring in Singapore as a key to revitalising the island nation’s position in ASEAN.

“This is being achieved primarily by restricting immigration – in a move to align growth with Singapore’s natural labour constraints – while incentivizing productivity investments. We think the AEC is impeccably timed for Singapore, as it incentivizes and provides a conduit to firms that outsource more labour-intensive parts of their production to other ASEAN countries,” HSBC said.