HAIKOU, June 4. /TASS/. The creation of a free trade port on the Island of Hainan confirms China's desire to further promote its foreign openness policy, states a Xinhua editorial dedicated to the "General Program for the Establishment of a Free Port on Hainan," which was published by the Central Committee of the Chinese Communist Party and the Chinese State Council.
“The construction of Hainan's free trade port will support to national strategic goals in institutional innovation, stimulating growth and a more open policy. Hainan intends to strengthen ties and cooperation with Southeast Asian countries, as well as promote joint development of the Guangdong-Hong Kong-Macao Great Bay region,” the editorial states, indicating that the program also envisages the use of opportunities provided by the technological and industrial revolution in tourism, services and high-tech industries in order to create new competitive advantages for the island.
As for the program's implementation, according to the agency, China will not be chasing fast results, and intends to develop this project step by step instead. "Hainan will gain more autonomy for reforms, and the creation of more flexible and effective laws, as well as a system of regulations to remove the institutional barriers to the production process," the article writes.
Hainan's free trade zone
In April 2018, President Xi Jinping said that the Chinese authorities intend to actively involve Hainan in globalization and to draw foreign investors to the island province. By 2050, according to the authorities, the island should become a unique international cluster with an advanced economy, developed tourism, top-notch scientific, technical and financial potential, and modern medicine. The branches of the best universities and offices of the most powerful corporations in the world will be located on the Island of Hainan.
By 2025, the Chinese government intends to create an "international center for tourism and consumption" on Hainan. In order to do so, the "Eastern Hawaii" with their unique natural landscapes, thick rainforests and great climate will establish a developed network of hotels, which blend perfectly with white sandy beaches stretching along the coastline. The combination of an exotic subtropical nature and a modern eco-friendly infrastructure will boost tourist inflow to the island from the most distant parts of the world.
The program for the creation of the free trade port
Earlier, the Central Committee of the Communist Party of China and the Сhinese State Council published the “General Program for the Establishment of a Free Port on Hainan,” according to which the island’s administration intends to create an effective system to fulfill a number of important social and economic goals by 2025, and within 10 years to decisively enhance the innovative mechanisms for the region's development.
The document includes several dozen indicators, tasks and measures that the country's leadership sets in developing this region. According to the government's order, China will turn the entire island into a special customs zone. "As far as the goods go, there will be a liberalization and benefits policy with zero customs duties," the document reads.
According to the program, the Chinese authorities intend to complete the creation of a free port on the territory of Hainan province by 2025: by this time, a system of free trade and investment should be set up on the island. In order to do so, the region will have to create advanced conditions for entrepreneurial activity in the country, increase the number of market entities, ensure free competition, and create the necessary legal mechanisms.
By 2035, the free port and its way of working should "become more mature." As indicated in the document, the work should be based on the principles of “freedom, justice, the rule of law and high-level control”. By this time, Hainan should ensure the freedom of trade and investment, cross-border movement of capital and people, and freight traffic. The state program emphasizes that "by the middle of this century" it is necessary "to create a fairly strong and influential high-level international free port" on Hainan.
The document states measures to reduce the tax burden, encourage entrepreneurship and consumption. The action plan also provides for a number of measures to develop transport, investment, culture, education, medicine, tourism, and easing the visa issuing process.
The construction of Hainan's free trade port, according to the document, is vital for developing an open economy, implementing market reforms and improving the business climate. This is not only a part of the strategic choice to promote quality development, but also a certain practical step to support economic globalization and create "the society with a common destiny" — an idea which was mastered by by the Chinese President Xi Jinping, writes Xinhua.
In April, the Hainan authorities made an effort to create a favorable international business climate and decided to give more rights to the seven key industrial parks of the province in order to promote the free trade port project.
Taking into account that Hainan is focused on the development of modern services, high technology and tourism, a number of leading world companies have already invested in the province. According to the Hainan Department of Commerce, in 2019 at least 338 enterprises with foreign capital were set up in the province, which is by 102.4% more than in 2018, and the amount of actually used foreign investments grew by 100% year on year and reached $ 1.5 billion.
In January-April 2020, according to the latest data, the amount of actually used foreign investments amounted to $ 326 million showing an increase of 252.3% compared to the same period last year. Over the first four months of 2020, 110 new enterprises with foreign capital were registered in the Hainan province, working in trade, investment, medicine and logistics.
“Foreign-funded enterprises have become an important force boosting Hainan's economy development,” the agency quoted the deputy head of the department Peng Wei, who also pointed out that Hainan will follow the policy of openness and create favorable conditions by using foreign investment wisely.
According to Han Shengjiang, the head of the provincial Office for International Economic Development, Hainan is becoming a new force behind China’s policy of reforms and openness. “Hainan's free port special policy is very important, especially amid the COVID-19 epidemic. It shows China’s strong intention to expand the opening and will undoubtedly bring big opportunities for global investors,” the official said.