HAIKOU, November 29. /TASS/. China’s Hainan has managed to concentrate the necessary resources and effectively use the existing potential to start a new stage in its development, which should be marked by unprecedented growth, believe economic observers at the "Hainan Daily".
In their opinion, the island got another powerful incentive for progress on June 1, when the General Program for the formation of Hainan's Free Trade Port was published. According to the economists, the first six months after this important historical event became "a key stage, during which a lot of work was done to ensure long-term and sustainable growth." Over the past few months, the local authorities, even despite the pandemic, have managed to significantly boost economic activity, thanks to which, according to the observers, Hainan "fulfilled the three-day quota per day."
Large infrastructure projects
Air transportation is the main form of international traffic that stimulates the development of Hainan’s Free Trade Port. Thanks to the duty free trade, planes are refueled here at the best and lowest rates in China. Among the most notable advances in infrastructure construction in recent years is the completion of seconf terminal of Phoenix International Airport in Sanya.
With its expansion, this airport, which provides regular transport of people and goods to 98 cities (including 36 cities in other countries), is expected to soon become a key transport hub for the Asia-Pacific. Airports Council International recently named Phoenix as the best airport with an annual passenger turnover of 15-25 million people. Last year, it received 123,200 flights and served a record 20.1 million passengers.
Road infrastructure is equally important for Hainan, contributing to its transformation into an international center for consumption and tourism. The region is actively building high-speed highways and related facilities. Thus, recently, the longest tunnel in the province was laid in Wuzhishan, the length of which exceeds 4.8 km. In addition, a similar underground structure 2.7 km long in Haikou, across the main waterway of the island, the Nandujiang River, has been practically completed.
Exhibitions
Over the past six months, Hainan has noticeably intensified its activities in organizing exhibitions on national and global scale. Each time at such events, contracts are concluded, business partnerships are formed that stimulate economic growth both in the province itself and throughout China, and a number of other countries. For example, during the three-day International Tourism Equipment Exhibition, which wrapped up on November 22, with hundreds of companies and manufacturers as participants, agreements for 13.3 million yuan (about $ 2 million) were signed.
Given the great impact such events have on Hainan's development, the local authorities recently decided to award the organizers of major exhibitions and forums with prizes of up to 7 million yuan (about $ 1 million). It is expected that due to this, in the near future, activities of this kind will increase significantly in the province. The island is preparing for several major events, in particular for the 1st China International Consumer Goods Show, which will take place on May 7-10, 2021 at the Haikou International Congress Hall.
Hainan continues to actively participate in events in other China’s regions. For example, in early November, the province unveiled its potential at an EXPO in Shanghai. There, Sanya Cross-Border E-Commerce Industrial Park has entered into strategic cooperation agreements with overseas companies representing more than 20 major brands in food and consumer goods.
The Hainan Administration recently approved a new strategy aimed at expanding and strengthening Hainan's international cooperation. Officially, this government program began to operate on September 1. It is assumed that it will be able to breathe new life into the exhibition industry, increase the number of promising projects at the national and global level.
Duty free trade
According to many Chinese and foreign tourists, duty-free shops should be considered one of the main advantages when visiting Hainan as tourists. The pilot program for the development of duty-free shopping on the island was launched back in 2011. Over the past 10 years, four key sites of this kind have appeared in the province, two of which are located in Haikou, the rest in the resort town of Sanya (south of the island) and in the small urbanized village of Boao (east). There, anyone can take advantage of attractive discounts and purchase products of their favorite brands at reasonable prices.
Through these special shopping malls, the Hainan government is encouraging consumer tourism. At the same time, this contributes to the creation of new jobs, the implementation of the plan to alleviate poverty. By the end of 2020, five duty free shops are expected to be created on the island, three of them in Sanya and two more in Haikou.
On July 1, the Hainan authorities announced a new, more liberal duty free policy. From then until the end of October, sales in local duty-free shops exceeded 12 billion yuan (over $ 1.8 billion at current exchange rates), an increase of 214% year over year.
International logistics
Cross-border transport communication projects play an important role in the development of Hainan's free trade port. One of the objects on which the administration of the island pins high hopes is the international port of Yangpu, which specializes in servicing large container ships. In 2019, the GDP of this economic region with more than 89,000 permanent residents, exceeded 26 billion yuan ($ 3.7 billion).
In accordance with the "Comprehensive plan for the formation of a new integrated sea and land corridor" of the Chinese State Committee for Development and Reforms, by 2035 it will become a key point for the distribution of trade flows from various regions of the country to Southeast Asia and Oceania, Europe and North America. It is expected that by 2025 Yangpu will become a major regional transport hub, through which up to 5 million containers per year will pass annually.
Attracting foreign specialists
Over the past six months, the Hainan authorities have stepped up policy to attract skilled labor from abroad. According to official statistics, more than 10,000 people belonging to this category have settled and work here. A preferential income tax was recently introduced for them, the maximum rate of which is 15%. A number of foreigners who have received the status of valuable personnel are entitled to obtain a residence permit or permanent residence permit for up to five years.
One of the significant measures to draw high-value workers to Hainan over the past few months has been the creation of the province's first public investment fund to support professionals and entrepreneurs, which has already launched a funding program. Its initial capital amounted to 210 million yuan (about $ 31 million) and is expected to be increased to 1 billion yuan (about $ 150 million) in the near future. This financial institution plans to invest in enterprises created with the participation of talented specialists.
Hainan’s free trade port
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.
On June 1, the Central Committee of the Chinese Communist Party and the State Council published the General Development Program for Hainan's Free Trade Port, according to which an effective mechanism to stimulate sustainable and long-term growth should be finally formed in Hainan by 2025. It is expected that thanks to new methods, many of which are being introduced in China for the first time, the province will be able to fulfill a number of key socio-economic tasks necessary to form a powerful financial and economic center in the country’s south. It is assumed that by 2035 both the economic and innovative potential of this region will be maximized, and it will become one of the most attractive places for international investors.