Wednesday, January 9, 2019

What does the free trade zone in Hainan mean for Chinese agriculture?

Image result for hainan free trade zone and port agriculture


CCTV announced on April 13th, 2018, that the entire island of Hainan will become a pilot free trade zone with a free trade port with Chinese characteristics. Foreign ships are allowed to freely enter and leave the free trade zone. Foreign product import is exempt from taxation, and the supervision of quotas is also abolished. This free trade zone opens the country to foreign trade. The free trade zone will also attract foreign investment, develop export for processing businesses, and encourage foreign investors to establish large-scale commercial ventures, as well as promote the economic systems within the free trade zone and overall development.

Sanya in Hainan

Hainan is famous for its tropical climate and natural resources, but large parts of the island actually have a temperate climate. From the viewpoint of mainland China, however, almost half the country's tropical regions are in Hainan. Many farmers move their plantations to Hainan, because the island has three harvest seasons per year. If the country continues to increase production and improve agricultural technology, then Hainan could become a global plantation.

Convenient distribution facility

The establishment of a free trade zone will undoubtedly bring Hainan many opportunities. First, the price of import products will go down. This naturally includes agricultural products. Lower prices are likely to stimulate consumer desire to buy imported agricultural products. At the same time, this is a critical turning point for import and export traders, who will require a push for innovative development in agricultural trade. 

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