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Balancing act ahead for Hainan after Xi Jinping hands it a crucial role 

As the island opens up to the world in the latest reforms push, officials must learn lessons from the past and adapt their governance accordingly  

PUBLISHED : Saturday, 21 April, 2018, 4:16am
UPDATED : Saturday, 21 April, 2018, 4:16am

Hainan is China’s smallest province, but it has been handed a significant role in the second phase of the nation’s evolution. On the heels of President Xi Jinping announcing at the Boao Forum for Asia a further opening up to the world and pushing of reforms, he declared the southern island would be a showcase for development.

Under plans to turn it into a pilot free-trade zone and steadily create a free-trade port, its government will have greater autonomy to drive goods, services, technology and tourism.

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It is a big responsibility; while being a pioneer, it will also be expected to set an example for developing an outward-looking economy.

Xi has good reason to put his faith in Hainan. Years after Shenzhen was declared the nation’s first special economic zone, the successful model was extended to the whole of the 33,920 square-kilometre tropical island in 1988.

At the time, its economy was agriculture-based and poverty was rife, but through innovation, it has been transformed into a regional hub for trade, logistics, technology and tourism.

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On the 30th anniversary last week, it was given the mission to become a centre for green development, a tourism hotspot in the mould of Hawaii and a national “strategic base”.

The island in the South China Sea has all the resources to turn vision into reality. For tourists, there are pristine beaches, tropical rainforests and hot springs. Hainan’s airports, cruise terminals and cargo ports provide links to more than 160 countries and regions, while 653km of high-speed rail track encircle the province. Science and technology is the latest driver of growth and plans focus on deep-ocean research, hybrid seeds for agriculture and space exploration.

How Hainan became the Hawaii of the East

Hainan has long had an open-door policy on trade and investment, but the new strategy will deepen reforms to make it the nation’s pacesetter. An investment fund will be set up for the free-trade port system, to become operational with the “all-round participation” of foreign firms by 2025. Multinational companies will be encouraged to set up regional and international headquarters. To draw more tourists, 59 countries will be given visa-free entry and the feasibility of horse racing and sports lotteries examined.

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There are obvious implications for Hong Kong; Hainan’s reforms may provide a much-needed jolt to ensure cooperation and participation in the Greater Bay Area project. But Hainan’s officials also need to learn lessons from the past. The island’s governance has to be adapted and a balance struck between economic growth and the environment. Success is crucial, given how an example is being set and the model is in line with China’s pledge to be open and inclusive with the global economy.