A cargo ship loaded with Indonesian palm oil has drawn a new route in the South China Sea, bypassing the traditional chokepoint of the Malacca Strait and heading straight to Hainan Yangpu Port. According to the shipowner's accounts, this new route saves over 30% in overall costs.
On December 18, 2025, the Hainan Free Trade Port officially began full island customs operations. Its area is equivalent to the entire island of Belgium, becoming the world's largest customs supervision special zone. Policies indicate that the zero-tariff commodity ratio in Hainan has jumped from 21% to 74%, with over 6,600 types of goods imported duty-free.
This is not a simple policy adjustment, but a silent reconstruction of global trade flows. When Indonesia's palm oil and Thailand's rubber begin to choose Hainan as their first stop, a profound question arises: what other solid foundations support traditional trade hubs besides geography?
01 Hub Game
The golden age of traditional geographical hubs is built on the 'must-pass roads' of the physical world. Approximately 37% of global maritime trade needs to pass through the Malacca Strait, and Singapore has thus built a prosperous transshipment trade system.
However, the moat of this model is becoming shallower. In August 2025, an Indonesian freighter bypassed Singapore for the first time, sailing directly to Hainan Yangpu Port. The detour saved about 32% of costs, allowing an extra profit of $280 per ton of goods.
Singapore's response was to immediately reduce transshipment fees by 18%, but it failed to reverse the trend. The core of the problem is no longer simply the high or low 'toll fee,' but rather that Hainan offers a more disruptive value chain.
02 Policy Reshaping Costs
The 'policy arbitrage' space brought by Hainan's customs closure is key to attracting global factors. Its core is the customs supervision model of 'open the first line, control the second line, and allow free movement within the island.'
'Opening the first line' means high freedom of exchanges with foreign countries. The entry of goods into Hainan has become more convenient, allowing a large number of 'zero-tariff' goods to clear customs quickly.
'Controlling the second line' precisely manages the entry of goods into the mainland, ensuring a unified national tax system. The most attractive aspect is the 'processing value-added duty exemption' policy—goods processed in Hainan with value added exceeding 30% can enjoy duty exemption when entering the mainland market.
This directly alters the calculations of enterprises. A grain and oil company that used to 'buy globally, sell nationwide' can now leverage Hainan's policies to achieve an upgrade in its business model: 'in Hainan, buy globally, sell globally.'
03 The Invisible Competition in the Digital Age
When the path of goods flow is reshaped, another lifeline supporting trade—competition in capital flow and settlement systems quietly upgrades. Traditional cross-border trade settlement relies on the banking system and often faces issues such as high fees, long cycles, and low transparency.
In the context of exploring a higher level of institutional openness in Hainan, pursuing freer movement of people, goods, capital, and data, a more efficient, transparent, and low-cost financial settlement infrastructure has become a 'soft power' equally important as hardware ports.
This is precisely the narrative that decentralized finance can embed. Imagine a settlement method: it does not rely on any single country's banking system, operates 24/7, settles on the chain instantly, is publicly verifiable, and has very low fees.
It can provide a seamless 'financial highway' for the emerging and more direct trade flow between Hainan and Southeast Asia.
04 Building the Foundation of Trust: When Excess Collateral Meets Multi-Chain Circulation
This vision is not a castle in the air. Taking the decentralized stablecoin USDD as an example, it demonstrates a possible path. Its core operating mechanism provides new ideas for building trade trust in the digital age.
First, it is the transparent excess collateral. According to a report by the crypto data agency Messari, every circulating token of USDD is backed by assets (such as BTC, USDT, etc.) locked in blockchain smart contracts that are worth more than it. As of early September 2025, the total value of its reserve collateral peaked at over $620 million, consistently exceeding circulation. All collateral statuses can be verified on-chain, building trust with code rather than promises.
Secondly, it is a seamless multi-chain settlement network. USDD has been deployed from the Tron ecosystem to Ethereum, achieving a dual-chain architecture. Future plans include expansion to more public chains. This means that trade and logistics applications developed on different blockchains can share the same stable, trustworthy settlement medium, breaking ecological islands.
Finally, it is an efficient stability anchoring mechanism. Its anchoring stability module allows users to exchange USDT/USDC for USDD at a 1:1 ratio. This simple arbitrage mechanism can effectively anchor the market price around $1, providing the much-needed price stability for trade settlement.
05 The Complete Puzzle of the New Hub
Hainan's ambition goes far beyond becoming a cheaper 'transshipment station.' Its goal is to become a new highland for the global allocation of quality resource factors that converge logistics, capital flow, and data flow.
In terms of logistics, Yangpu Port has launched 35 international routes and has improved efficiency by reducing container loading and unloading time from 8 minutes to 3 minutes and 15 seconds.
In the industrial sector, Hainan focuses on four leading industries: tourism, modern services, high-tech industries, and tropical characteristic efficient agriculture, while cultivating three future industries: seed industry, deep-sea, and aerospace.
On the capital flow level, Hainan has a multi-functional free trade account system, allowing enterprises to engage in cross-border financing and facilitating freer capital movement. As the integration of physical goods and digital asset certificates (Tokens) becomes closer, a digital financial hub that grows parallel to physical hubs and can even guide the flow of physical goods is of evident strategic value.
#USDD Stabilizing Trust. In today's fiercely competitive physical world hubs, true stability and trust are beginning to migrate to areas protected by transparent rules, mathematical algorithms, and global consensus. This is not just a technological upgrade but a reconstruction of business logic and trust mechanisms.
The Port of Singapore Authority has actively signed a cooperation agreement with Hainan, stabilizing the operation of 7 direct shipping routes. This reveals a future that transcends zero-sum games: coexistence of competition and cooperation.
The future global trade pattern may present a 'dual-core' or even 'multi-core' drive. Singapore continues to play a key role, relying on its mature high-end service industry and financial ecosystem.
Hainan, on the other hand, may rely on the vast inland market and institutional innovation to explore a new path that combines 'physical customs convenience' with 'digital settlement freedom.'
When a freighter chooses its course, it weighs not only the shipping distance and port rates but also the matching settlement efficiency, capital costs, and financial transparency. This silent transformation will ultimately redefine what is the irreplaceable 'hub' of this era.
