Singapore probably can't understand how it comfortably collected 'toll fees' in the Strait of Malacca for decades, thinking it had a firm grip on the situation, only to wake up one day to find Hainan at its doorstep, directly pulling the rug out from under it.

This matter starts with the 'lying down to earn' logic of Malacca, where a quarter of the world's crude oil and a fifth of goods pass through. Eighty percent of the oil imported by China from the Middle East goes through this route. Singapore is positioned at the southern mouth of the strait, where ships need to refuel, change crew, and handle paperwork. Just relying on these 'toll businesses' accounts for 7% of its GDP. In the past, whether it was Chinese home appliances or European cars, they had to look to Singapore when using the Eurasian shipping route. This geographical monopoly made them accustomed to 'lying down counting money'.

However, China has long ceased to want its lifeline tied to someone else's doorstep. Hainan's move is a first step in 'hardware'. Yangpu Port has built four 200,000-ton berths at once, allowing the world's largest container ships to dock directly, with an annual throughput capacity reaching 5.5 million TEUs. What about Malacca? There are 37 shallow spots in the strait, and a 200,000-ton oil tanker has to detour through the Lombok Strait, adding an extra 2,000 kilometers.

Hainan has also established the 'China Yangpu Port' as a ship registration port, with 64 international vessels registered and a total deadweight tonnage of 6.35 million. New ship tax rebates and tax exemptions for foreign vessels directly pull shipping companies into its own sphere. In the past, ships had to stop in Singapore, but now Yangpu can accommodate large vessels and offer bonded services. Who would still be willing to take a detour?

Even more astonishing is the 'software'. Hainan's free trade port processing value-added policies, such as exempting tariffs for goods processed in Yangpu with a value-added increase of 30%, allow Southeast Asian rubber and Middle Eastern crude oil to be processed in Hainan, directly transforming into finished products sold domestically, saving the hassle of transshipment through Singapore.

In the first 10 months of 2024, Hainan's import and export with ASEAN reached 48.29 billion, growing 45 percentage points faster than the province's overall foreign trade. Cargo ships from Indonesia and Malaysia head straight to Yangpu, and even the Hainan chicken rice that Singaporeans love has become a 'delivery code'. The chicken rice that overseas Chinese from Wenchang brought to Southeast Asia years ago has now turned into a fresh food business directly delivered between the two regions.

What Singapore did not account for is that Hainan is not only seizing the docks but also the 'rules'. Pilot projects for international transshipment operations, and the free flow of funds for ships and crew have made Yangpu a 'maritime free trade zone'. In the past, shipping companies in Singapore had to negotiate with three parties (Singapore, Malaysia, Indonesia), but now Hainan has streamlined all procedures through one window.

The most aggressive move is in the shipping route layout: by 2025, Hainan will stabilize 72 container shipping routes, connecting 'domestic and foreign trade on the same ship' routes through Yangpu, allowing Thai rice and Vietnamese furniture to be distributed directly in Yangpu. Even Singapore's Changi Airport has to sign cooperation agreements with Haikou Meilan, claiming mutual benefits but in reality diverting traffic.

There is also a historical account. The Chinese foundation in the Strait of Malacca is deep, with 1.2 million overseas Chinese from Wenchang in Hainan spread across Southeast Asia. The labor ships that once went 'down to the South Seas' have now turned into investment ships for the free trade port. Singapore has made money for decades relying on Chinese culture, but did not expect Hainan to use the bond of 'same source, same root' to transform business from 'transit' to 'landing'.

For example, Singapore hotel groups opening branches in Hainan, and biomedical companies clustering in Boao Lecheng, appear to be cooperation, but in reality, Hainan is using the 'front shop, back factory' model to turn Singapore's transshipment functions into a link in the industrial chain.

The key point is that Singapore has been resting on its geographical advantages for too long, forgetting the power of 'human factors'. The siltation in the Strait of Malacca advances by 500 meters each year, and no matter how high Singapore's port unloading efficiency is, it cannot cope with the fact that large ships cannot enter. In contrast, Hainan is reclaiming land and developing green electricity with 'wind and solar storage', aiming for green electricity to account for over 90% of the port area by 2027.

While Trump was still threatening China with tariffs, Hainan had already quietly guided the flow of goods, funds, and people from Southeast Asia towards the South China Sea using free trade port policies. Singapore thought it had choked China's neck by controlling the strait, but did not see that China had built a 'new Malacca' at its doorstep, not a geographical throat, but a high ground of systems.

This situation resembles the historical cycle of Malacca replacing Palembang and Singapore replacing Malacca in the past. However, this time, the initiative is not based on the colonial era of pirate protection, but on the self-trade era of policy innovation. Singapore's 'lying down to earn inertia' has lost to Hainan's 'breakthrough determination', not in geography, but in failing to understand: when a 1.4 billion-person market decides to turn 'transit business' into 'own business', any geographical monopoly cannot withstand the reconstruction of the system.

Now, the winds and waves in the Strait of Malacca still exist, but the cargo list on the ship has quietly written 'stop at Yangpu'.