Hainan is the latest Chinese free-trade zone with tech hub ambitions
- Hainan island was designated as China’s 12th free-trade zone by Chinese President Xi Jinping in April last year
- In 2017 a total of 269 companies received money from a special fund for internet development
Hainan, an island province known as China’s Hawaii, does not only want to be known for sunshine and beaches: It has set an ambitious goal to become the country’s southern hub for technological innovation.
The strategy involves offering tech start-ups free rent, reduced tax rates, easier visa policies, and access to government-backed venture capital funding.
The first global tech company to commit to a presence on the island was Microsoft, which signed an MOU with the provincial government in April 2013 for a partnership that would transform Hainan into an “international tourism destination and a powerhouse of software development”. Singaporean private equity giant Temasek, which has invested in Tencent and Alibaba, signed an MOU with Hainan-based HNA Group in April last year to explore opportunities in aviation and logistics, and airport infrastructure.
The Hainan government said it is in talks with other tech multinationals, including IBM and SAP, to establish Asia region headquarters on the island.
“Compared with Beijing and Shanghai, Hainan has a geographical advantage that can connect China with Southeast Asia,” said an official from the Hainan government, who declined to be named because of internal policy. “It would be attractive for multinationals and domestic giants to set up regional headquarters here.”
Hainan island, already global headquarters for Chinese airline and property conglomerate HNA Group, was designated as China’s 12th free-trade zone by Chinese President Xi Jinping in April last year, which in theory means the country’s southernmost province can grant foreign firms greater trade and economic freedom. China’s other free trade zones are in Shanghai, Fujian, Tianjin and Guangdong.