Port of Singapore Authority: Ideology vs. Pragmatism-Trade and Geopolitics in the Malacca Strait
This case describes the growth of the Asian ports industry between 2015 and 2020 and the impact of escalating US-China trade tensions and rising Chinese direct investments on regional port competition. Throughout the 2000s, the volume of Asian shipping steadily increased on the back of an expanding Chinese economy. The case focuses on how the Chinese Belt and Road Initiative and new Chinese-funded mega-ports like the Malacca Gateway Port would affect the competitive dynamic between the Port of Singapore (PSA) and regional competitors such as Malaysia's Port of Tanjung Pelepas (PTP). The PSA has been the dominant transshipment hub in the region but has been ceding market share and has lost its position as the busiest port in the world to the Port of Shanghai. In planning for the future, the PSA has to work within Singapore's diplomatic framework of balancing Eastern and Western interests on the geopolitical chessboard of the South China Sea region. The case provides an example of how national interests and international relations have to be considered when making business decisions.