New Historical Chance with Hainan Free Trade Port

By Shen Shishun

On the afternoon of April 13, at a gathering celebrating the 30th anniversary of the founding of Hainan Province and the Hainan Special Economic Zone, Chinese President Xi Jinping announced a decision by the CPC Central Committee to support building Hainan into a pilot free trade zone and subsequently into a free trade port. Hainan will progressively form free trade port policies and systems under the leadership of the CPC Central Committee and State Council.

The news was widely welcomed by the people of Hainan.

The most interesting concepts are “building Hainan into a pilot free trade zone” and “a free trade port with Chinese characteristics”, which are two pioneering plans for Hainan.

To date, China boasts 11 pilot free trade zones, most of which cover an area of around 120 square kilometers. With a total area of 35,400 square kilometers, Hainan will be the largest pilot free trade zone in China once the zone covers the whole Island. Once Hainan becomes a free trade port, it will be the world’s largest, far bigger than Hong Kong and Singapore, which cover an area of about 1,000 square kilometers, as well as Dubai, which covers less than 4,000 square kilometers.

Hainan to Take on a Bigger Role in Reform and Opening-up

China unveiled Guidelines on Supporting Hainan to Deepen Reform and Opening up on April 14, 2018. The document outlines the development path and goals of Hainan. It was jointly released by the Central Committee of the Communist Party of China and the State Council. According to the guidelines, Hainan is entrusted a new mission of reform and opening up. Hainan will become a pilot free trade zone and free trade port with Chinese characteristics. The document sets economic growth goals for 2020, 2025 and 2035. In terms of industries, Hainan will build a tourist industry, promote the integration of the Internet, Internet of things, big data, artificial intelligence (AI) with the real economy, and encourage private companies to exploit resources in the South China Sea.

In fact, there are twelve key industries in Hainan – tourism, tropical efficient agriculture, Internet, healthcare, modern financial services, exhibitions, modern logistics, oil and gas, pharmaceuticals, low-carbon manufacturing, real estate, and high-tech, as well as education, culture and sports. China is making every effort to support all Hainan’s industries.

The Significance of This Decision

From a Chinese perspective, making Hainan a free trade port with Chinese characteristics can open China’s economy further and accelerate Hainan’s economic development, so as to develop the national economy in a more balanced way.

From a global perspective, China has made this significant decision despite an emerging trend of trade protectionism and opposition to globalization around the world, in a move that signals China’s determination to promote economic globalization. This decision will bring higher quality economic growth to China, and also offer better prospects to all peoples in all nations.

What Should Hainan Do?

A glance at the difficult times experienced throughout Hainan’s history shows us that there have seldom been opportunities for the province to flourish. Hence it is crucial for Hainan to grasp this opportunity, put the free trade policies into effect, and turn its passion into actions.

30 years ago, Hainan was granted independence from Guangdong, becoming a new province and the biggest special economic zone in China. In 2008, Hainan was designated as an international tourism island by the State Council. Although these two measures were of benefit to Hainan, the province remains underdeveloped and lies at the bottom of the table among regions in China. Hainan’s overall GDP and per capita GDP in 2017 lag behind other parts of China.

Fortunately for Hainan, China has now designed a clearer industrial plan for Hainan. Property speculation will be restrained, and there will be support for companies working in science and technology. With the two-step strategy of pilot free trade zone and a free trade port in place, which provides both products and demand, I believe Hainan will soon thrive.

Hainan need to exploit its strengths in geography resources and advantageous policies in order to build a powerful international center of tourism, optimize and strengthen its tropical characteristic efficient agriculture, and become a national modern tropical agricultural base.

In addition, China is looking to become a maritime great power. Therefore, with the largest ocean area in China, Hainan needs to step up in fostering its marine industry marine economy, so as to play an essential part in this strategy.

Hainan is located at the southern tip of China. These new developments will ensure that this southern province will be the bridge to connect China with ASEAN and Southeast Asian countries, as well as a hub of the Maritime Silk Road. The whole of Hainan will see dramatic future developments.


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Shen Shishun, researcher of China Institute of International Studies

Editor: Cai Hairuo

Opinion articles reflect the views of their authors, not necessarily those of China Focus