HAIKOU, November 30. /TASS/. China's Hainan plans to attract the best foreign investors and professionals to effectively implement the regional development program, the local authorities are taking active steps to do so, stated a statement issued by the administration of the island.
It clarifies that by 2025, the Chinese government is going to fulfill the key tasks of creating a free trade port on the island, and by 2050 Hainan will become "an advanced international economic cluster with Chinese features."
"These measures are aimed to make it easier for foreign specialists and companies to settle here, so that they have the opportunity to participate in the process of increasing the openness of Hainan, in the formation of an international consumption zone," said the secretary of the provincial party committee Liu Cigui.
According to him, the Hainan leadership expects to use new ways to accelerate the processes of internationalization and economic globalization. As a result, as the head of the party committee explained, the island will become "an important pivotal element, both for China and for the whole world."
New stimulating measures
Over the past five months, Hainan has taken a set of important steps, which cannot but interest foreign investors and professional personnel belonging to the category of highly demanded companies and specialists, according to the statement. The reforms primarily affected fiscal policy: in June, the maximum income tax rate for individuals and commercial organizations that meet government requirements was reduced to 15%. Enterprises investing in modern services and advanced technologies were completely exempted from the corresponding payments. In addition, in November, the authorities lowered import duties on a wide range of industrial goods to zero.
Moreover, foreign companies registered in the Yangpu special customs zone (western coast of Hainan) were granted the right not to pay fees when delivering to the Chinese market if their products were made from local components and materials, or the cost of processing imported raw materials exceeds 30% of the price of the final product. Recently, in the same part of the island, procedures for the registration of international ships have been significantly simplified.
Due to the intensive development of sea tourism on Hainan, the benefits have extended to yacht owners: when visiting local ports, they no longer have to leave a cash deposit to the Chinese customs for the period of their stay in the province's waters. Air carriers serving air routes that connect the province with other Chinese regions and other countries have received special privileges. Such companies have the right to refuel their planes with aviation fuel at favorable tax-free rates.
Important innovations were also the removal of restrictions on the hiring of foreigners and the expansion of channels for hiring foreign specialists. The government has created an international innovation platform in the field of employment, creating more efficient mechanisms for recruiting in-demand personnel, their licensing and certification. The authorities paid special attention to the strategy of attracting foreign professionals with high salaries.
Among other important measures that have had a stimulating effect on Hainan's economy over the past six months are the simplification of mutual settlements in the implementation of foreign trade operations and the optimization of the field of transport communications. All these innovations are expected to significantly reduce the costs of foreign businesses doing business and manufacturing on the island.
According to official figures, the Hainan authorities' policy of increasing openness is yielding tangible results. Thus, according to statistics, in January-August, more than 2,000 new foreign trade companies were registered in the province — 3.9 times higher than in the same period in 2019. Over the same period of time, foreign investors founded more than 400 enterprises on Hainan, having invested over 387 million yuan ($ 58.8 million at current exchange rates) in the island's economy, which is 33% higher than in the first eight months a year earlier.
Hainan's free trade port and its goals
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.