China economy

‘China’s Hawaii’ set to become pilot free-trade port in next phase of country’s opening up

President Xi Jinping announces grand plan for Hainan that could see it challenging major ports such as Hong Kong and Singapore

PUBLISHED : Friday, 13 April, 2018, 10:37pm
UPDATED : Saturday, 14 April, 2018, 11:30am

China will make the tropical island of Hainan – a province sometimes described as the country’s Hawaii – into a pilot free-trade port, President Xi Jinping announced on Friday.

Xi unveiled the grand plan for the island of 9.3 million people when he attended a conference in Haikou, the provincial capital, to mark the 30th anniversary of the establishment of the Hainan special economic zone, confirming the South China Morning Post’s report on Sunday.

As well as becoming China’s 12th free-trade zone, Hainan, a 35,000 square kilometre (13,500 square mile) island, will go a step further by becoming the largest free-trade port in the world and may challenge other ­regional trading ports from Hong Kong to Singapore.

Xi did not specify what the change entailed, but said ­Hainan should become a pilot zone for deeper reform and opening up as well as for building ­“ecological civilisation”.

There are also plans to turn the island into a global tourism hotspot and strategic base for the country.

Xi highlighted Hainan’s “special advantages” – including its status as China’s biggest special economic zone, its geography and “best ecological environment” – as reasons to make it the test ground for reform and opening up.

Xi said the Communist Party’s Central Committee had high hopes for Hainan, adding that it was an important step in China’s opening up to the world and advancing economic globalisation.

He urged the island authorities to speed up reforms in urban-rural integration, human resources management, fiscal policy and finance, income disposal and state-owned enterprises.

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Exchanges in international energy, shipping, commodities and carbon trading will also be established.

Xi said Hainan would build a modern economy and develop information technology in fields such as big data, satellite navigation and artificial intelligence.

The island will also focus on developing modern service industries such as tourism, the internet, health care, finance and hosting conferences and exhibitions.

Direct international flights to the island will be increased and duty-free shopping will be expanded beyond the city of Sanya to the whole island.

Authorities on the island will also be encouraged to pilot a scheme to attract foreign talent and technology experts. This will include measures to make it easier for people from overseas to find work and acquire permanent residency.

Also, foreign students who have obtained master’s degrees will be allowed to start their own companies.

In 1988, Hainan was separated from Guangdong to become a province in its own right and was made into a special economic zone.

Talent and money poured into the island, but the process led to a property bubble rather than repeating the economic miracle of other special economic zones such as Shenzhen.

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In 2009, a new strategic plan was established to transform Hainan into an “international tourist island”, attracting huge investment into the local economy.

The property market began to grow again and infrastructure – including motorways, a high-speed rail line and a new airport – were added.

The island has also become an important military base because of its strategic location near the disputed South China Sea, with Vietnam to the west and the Philippines to the east.