Trump's tariffs have prompted Chinese companies to go overseas to Singapore! Shein's painful lesson: too big to hide.

More and more Chinese companies are considering relocating their registration to Singapore to drop the impact of Trump tariffs. This trend of “Singapore reshuffle” affects multiple industries including technology and biotechnology, with related consulting inquiries increasing by approximately 15% to 20% year-on-year. Singapore's advantages are evident: the United States only imposes a 10% tariff on its goods and has 28 FTAs. However, cases like Shein and TikTok prove that large enterprises are “too big to hide” and still cannot avoid scrutiny from Western regulators.

Three Major Driving Forces Behind Singapore's Reshuffling Wave

The core driving force behind the “Singapore Shuffle” phenomenon is the extremization of Trump's tariff policy. Trump imposed a 100% tariff on Chinese imported goods, causing the business costs for Chinese companies in the U.S. to skyrocket. In contrast, the U.S. only imposes a 10% tariff on goods from Singapore. This tenfold tariff difference provides a strong economic incentive for companies to relocate.

Specific cases include: optical product manufacturer Terahop, supported by China's Zhongji Xuchuang, established in Singapore in 2018; data center operator DayOne, spun off from GDS Holdings; AI agent company Manus AI from China's “Butterfly Effect”; and ChemLex, a company utilizing AI for chemical synthesis. Notably, both Manus AI and Terahop's websites do not mention their Chinese background. ChemLex CEO Sean Lin stated that he considers this startup, founded in Shanghai, to be a Singaporean company.

Jamie Khoo, the CEO of DayOne, stated in July this year that the company has been planning to spin off from its Chinese parent company because both parties operate under different regulatory systems. This statement attempts to portray the relocation as a “normal business decision” rather than “regulatory avoidance,” but the underlying intent is evident.

Three Major Advantages of Singapore as a Safe Haven for Chinese Enterprises

Tariff Advantage: The United States imposes only a 10% tariff on Singaporean goods vs 100% on Chinese goods, resulting in a significant cost difference.

Trade Agreement Network: With 28 FTAs, it is an ideal springboard for expanding markets beyond China.

Political neutrality and cultural similarity: Internationalized and politically neutral, with 74% of the population being Chinese, making it easy to adapt.

“The brand 'Singapore' is trusted globally. Singapore is favored for its internationalization, political neutrality, and cultural adaptability for Chinese enterprises and their expatriate employees,” said Erica Tay, an economist at Malayan Banking Berhad. The Chinese population in Singapore accounts for about 74%, and the convenience of using Chinese, similarities in dietary habits, and closeness in business culture all contribute to the drop in adaptation costs for Chinese enterprises.

The Blood and Tears Lessons of Shein and TikTok

However, the theoretical advantages face the brutal reality of “too big to hide” in practice. Companies like Shein and TikTok, which migrated early to Singapore, have clearly failed to avoid scrutiny from Western regulators. Shein encountered political resistance while advancing its listing plans in the United States and the United Kingdom. Despite having moved its headquarters from Nanjing to Singapore, it still needs to obtain approval from Beijing for its listing proposal. Currently, Shein is seeking approval from China for its listing in Hong Kong and is reportedly considering relocating its headquarters back to China.

This absurd scenario of “moving out and moving back” reveals the fundamental dilemma of Singapore's reshuffling: you can change the legal registration location, but you cannot change the substantive control and supply chain. Shein's design team is in China, the supply chain is in Guangdong, and the main market is in the United States; regardless of where the headquarters is, these facts cannot be changed. When U.S. lawmakers question its use of Xinjiang cotton and infringement of intellectual property rights, the Singapore registration location provides no protection.

The case of TikTok is even more extreme. Owned by China's ByteDance, its Singaporean CEO Zhou Shouzi faced questioning multiple times during a congressional hearing in Washington in 2024 regarding issues related to ties with the Chinese government. To meet national security requirements, ByteDance must sell its U.S. operations to a consortium made up of American and global investors. TikTok stated on Thursday that the sale agreement has been approved by ByteDance.

In 2024, the Chinese-funded investment institution Yuxiao Fund, registered in Singapore, failed to successfully increase its stake in the Australian rare earth miner Northern Minerals due to its Chinese background, highlighting the limitations of “settling in Singapore.” When it comes to critical resources and national security, the scrutiny from Western countries can penetrate the legal registration location and directly target the actual controllers.

The differentiated pattern of small enterprises being flexible while large enterprises are restricted

Experts believe that this strategy is more effective for smaller businesses, while there is limited room for maneuver for large companies. “Usually, low-profile entities such as family offices and trading companies find it easier to avoid attention,” said Chong Ja Ian, a political scholar at the National University of Singapore.

Some companies have noted the reality of tightening regulatory scrutiny. Dou Changlin, the Chief Operating Officer of Boan Biotechnology, stated that its Singapore subsidiary is primarily used to provide funding support for the company's operations in the United States. Although this structure helps the company meet financing needs through Singapore rather than China (which has strengthened scrutiny over capital flows), Dou also warned that U.S. regulators may ultimately trace its connections to the Chinese parent company. “Our business scale in the United States is very small, and I believe we have not yet entered the radar of the U.S. government.”

This logic of “small scale is safer” determines the applicable scope of Singapore's reshuffling. For small and medium-sized enterprises, family offices, or startups with annual revenues of tens of millions of dollars, relocating to Singapore can indeed drop tariff costs and political risks. However, for giants like Shein (annual revenue of hundreds of billions of dollars) and TikTok (1 billion users worldwide), no matter where they are registered, they cannot escape Western strategic scrutiny.

Singapore itself also faces a dilemma. On one hand, attracting Chinese companies to sign up can bring tax revenue, jobs, and economic vitality. On the other hand, if it is seen by the United States as a “whitewashing tool” for Chinese companies, Singapore could face diplomatic pressure or even threats of sanctions. As the United States intensifies scrutiny of Chinese companies, some foreign entities registered in Singapore have been implicated in criminal activities, further complicating the situation.

The data center company Megaspeed, headquartered in Singapore, was spun off from a Chinese gaming company in 2023 and is currently under investigation by the United States for allegedly transferring NVIDIA chips intended for artificial intelligence. In 2023, Singapore also witnessed the largest money laundering case in the country's history, involving several foreign nationals of Chinese descent; authorities are also investigating a business group owned by a Cambodian citizen of Chinese descent, which has been accused of operating a large-scale fraud center. These scandals have tarnished Singapore's “neutral” image and may prompt it to tighten scrutiny of Chinese-funded enterprises.

For Chinese companies considering expanding to Singapore, it is important to clearly recognize the limitations of this strategy. If the business scale is small, does not involve sensitive industries, and does not seek to list on Western capital markets, relocating to Singapore can indeed bring practical benefits. However, if it is a large enterprise, involves key technologies or resources, or plans to IPO in the United States, registering in Singapore does not provide real protection. A more robust strategy might be: true internationalization, rather than just changing the registration location. Distributing R&D, production, and sales across multiple regions globally reduces dependence on a single market, which can better address geopolitical risks than a simple “changing the signboard.”

The reshuffling trend in Singapore reflects the far-reaching impact of Trump’s tariff policy. When companies are forced to spend significant resources on legal restructuring instead of focusing on product innovation and market expansion, global economic efficiency is inevitably compromised. This is the true cost of the trade war: not only the tariffs themselves but also the resource misallocation and uncertainty they provoke. For the global cryptocurrency and tech industries, this geopolitical division may drive more projects to choose truly decentralized architectures, as decentralization may be the only way to survive when centralized legal entities become targets of attack.