 During the subsequent decades , Singapore grew to become an important port in the region . Its success was due to several reasons including the opening of the Chinese market , the advent of ocean @-@ going steamships , and the production of rubber and tin in Malaya . Its status as a free port provided a crucial advantage over other colonial port cities in Batavia ( now Jakarta ) and Manila where tariffs were levied , and it drew many Chinese , Malay , Indian , and Arab traders operating in South @-@ East Asia to Singapore . The later opening of the Suez Canal in 1869 would further boost trade in Singapore . By 1880 , over 1 @.@ 5 million tons of goods were passing through Singapore each year , with around 80 % of the cargo transported by steamships . The main commercial activity was entrepôt trade which flourished under no taxation and little restriction . Many merchant houses were set up in Singapore mainly by European trading firms , but also by Jewish , Chinese , Arab , Armenian , American and Indian merchants . There were also many Chinese middlemen who handled most of the trade between the European and Asian merchants . 
