Hainan city dubbed China’s best performing economy as ‘burden of economic output’ shifts from other regions

Haikou jumps 19 places to top the list, according to the Milken Institute’s Best-Performing Cities China 2021: The Nation’s Most Successful Economies report

Capital of China’s southernmost island province of Hainan is home to what is set to be world’s largest free-trade port and has become a duty-free shopping destination

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President Xi Jinping visited Hainan province in April. Photo: Xinhua

Published: 8:30pm, 25 May 2022

The capital of China’s southernmost island province of Hainan had the best-performing economy among Chinese cities last year, thanks to its rapid expansion of foreign investment, according to a US-based think tank.

It marks the first time that Haikou has topped the list, after jumping 19 places from its 2020 position. The city benefited from the government’s efforts to facilitate the Hainan free-trade port, in addition to several industrial projects, according to the Milken Institute’s Best-Performing Cities China 2021: The Nation’s Most Successful Economies report, which was published on Wednesday.

Hainan is front and centre in China’s ambitions to build the world’s largest free-trade port and to create a hub for offshore financing and duty-free shopping that will lure tourists and businesses with an internationally competitive tax regime and relaxed visa requirements.

The province is also well placed to strengthen ties with the Association of Southeast Asian Nations, China’s biggest trade partner.

Foreign direct investment in the province also increased from US$740 million in 2018 to US$3.52 billion last year.

Hainan’s economy grew by 11.2 per cent last year, to 647.52 billion yuan (US$97 billion), according to the Hainan Provincial Bureau of Statistics. That was compared with a national growth rate of 8.1 per cent.

Guangzhou, the capital of Guangdong province, and Xian, the capital of central Shaanxi province, respectively ranked second and third among first- and second-tier cities, the index showed.