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Tourism

US among 59 countries granted visa-free access to China’s resort island Hainan ... but who’s missing?

The move, adding to a state programme to spur water sports and horse racing announced earlier, seeks to remake Hainan from a backwater into “Asia’s Hawaii”, analysts said

PUBLISHED : Wednesday, 18 April, 2018, 3:00pm
UPDATED : Thursday, 19 April, 2018, 9:37am

China’s government has thrown open the doors to visitors from 59 countries, giving them visa-free entry to Hainan island, in an unprecedented move to spur economic growth and boost tourism in the backwater province.

Starting May 1, passport holders from the UK, the US, Canada and scores of other European and Asian countries will be allowed to enter Hainan for stays of up to 30 days, according to an announcement Wednesday by the State Immigration Authority. 

Absent from the list are African countries, countries on the Indian subcontinent, as well as three members of the Association of Southeast Asian Nations (Asean): Vietnam, Laos and Cambodia.

How Hainan became the Hawaii of the East

The latest move is an expansion from a 2000 policy that permitted tour groups from 21 countries to enter Hainan visa-free for up to two weeks. The new move lets individual travelers enter Hainan and extends the period of stay.

The move is likely to benefit Chinese airlines, including the island’s flagship carrier, Hainan Airlines, a unit of the troubled Chinese conglomerate, HNA Group.

The policy was expected to sharply increase the number of international tourists traveling to Hainan, and to help the island province eventually become “Asia’s Hawaii”, said Chong Tai-Leung, associate professor of economics at the Chinese University of Hong Kong.

Meanwhile, the new policy would benefit companies who have operations there, including airlines and developers, he said.

Long promoted as “China’s Hawaii”, the 35,000-square-kilometre tropical island in the northwest of the South China Sea with Vietnam to the west and the Philippines to the east, has historically been regarded as a backwater and afterthought. 

What to see and what to miss in Sanya, Hainan

It has a long way to go to become an international destination. The number of international tourist arrivals only crossed the one million mark last year. That was a mere 1.6 per cent of the 60 million domestic visitors that arrived in 2017. Bali, which is one-sixth the size of Hainan, greeted more than 5 million foreign visitors last year.

But it is now at the centre of one of Chinese President Xi Jinping’s initiatives to further open up the country’s tourism and financial sectors to attract more foreign investors, part of which is to transform Hainan into an international tourism destination and a free trade port.

Hainan’s service industry accounts for more than half of its 446.3 billion yuan (US$70.9 billion) gross domestic product (GDP) in 2017, according to mainland state media reports. Revenue for the tourism sector – foreign and domestic arrivals – totaled 81.2 billion yuan.

Although it has been China’s biggest special economic zone since 1988, the island has trailed rival zones such as Shenzhen in development and status. In the five years through 2017, it attracted less than US$10 billion in foreign investment – only 1.5 per cent of China’s total – and has struggled to find its place in the nation’s economic landscape.

‘China’s Hawaii’ set to become pilot free-trade port


Companies that could cash in on the latest round of liberalising policies include:

Resorts 

Fosun-owned Club Med has built the 10 billion yuan (US$1.6 billion) luxury Atlantis Sanya resort in Sanya, which is expected to attract international family tourists.

Department store operators

Retail businesses including Wangfujing Group and Dalian Wanda could benefit from more tourists visiting.

Property developers 

China Evergrande, China’s third-largest developer by sales, is building Ocean Flower Island, a cluster of hotels, theme parks, malls and conference centres on an artificial archipelago off Hainan’s northwest coast. 

Airlines

Hainan Airlines Holding and rival domestic carriers could benefit from more domestic and foreign tourists.