The deputies of the National People's Congress (parliament) at the sessions of the country's supreme consultative and legislative bodies held in Beijing outlined the tasks of the socio-economic development of Hainan's free trade port for the fourteenth five-year plan (2021-2025) and until 2035. As noted in the working report of the Chinese government, the main goal is to actively pursue reforms to increase openness and promote innovation in the southernmost province of China.
"It is necessary to promote fair competition between domestic and foreign enterprises, in accordance with legal standards to protect the legitimate rights and interests of foreign enterprises," clarifies the document read out by Premier Li Keqiang.
According to the head of the Chinese government, the program to create a special economic zone on Hainan is one of the most important projects that holds the country's top leadership close attention.
Key development areas
According to the Hainan Daily observers, the province became the first among Chinese regions to successfully implement a number of innovative ideas of the top Chinese leadership, the purpose of which is to enhance the country's openness and identify new growth stimuli in the era of globalization. For example, the island recently announced the removal of duties on a wide range of industrial products. Moreover, the Hainan authorities began to pursue an active policy of drawing qualified foreign personnel to strategically important industries, taking unprecedented steps to increase the inflow of foreign capital.
The General Development Program of Hainan's free trade port, published on June 1, 2020, played an important role in the creation of a new international trade and economic center in the province. According to Chinese experts, it allowed to release untapped potential and boost mechanisms for long-term and stable growth.
According to official data, thanks to these changes in the past year, the number of market entities on Hainan increased by 30.86%, exceeding 310,000 commercial organizations. During the same period, several hundred investment projects were launched on the island, tens of thousands of skilled specialists from different regions of China and other countries were attracted to the province.
According to the local administration, the province has also made great strides in implementing a program to eliminate risks that stall sustainable economic development.
Space and deep sea exploration
In recent years, Hainan has made great steps in the development of aerospace technology. Thus, at the end of July 2020, the Tianwen-1 research probe was launched to Mars from the Wenchang cosmodrome (northeast of the island) using the Changzheng-5 carrier rocket, and four months later Chang'e-5 flying vehicle, which delivered lunar soil samples to Earth, was sent to the natural satellite of our planet a few weeks later.
Local scientists have also made major advances in deep sea research. In November, the piloted bathyscaphe Fendouzhe ("Warrior") set a new record for China when diving to the bottom of the Mariana Trench, sinking to a depth of more than 10.9 km. After successfully completing the mission, it returned to the port of Sanya on the southern coast of Hainan.
Among other areas of research in which the province has shown notable success over the recent years, one can name the breeding of varietal seeds and the promotion of plant breeding projects. At the same time, the authorities are actively working to create innovative clusters on the island, encouraging the opening of branches of leading foreign universities and educational institutions.
Moreover, Hainan encourages innovative companies, both big corporations and small firms. According to statistics, there are already more than 3,000 of such commercial organizations on the island, whose investments in the development of new products annually increase by an average of 34% per year.
A paradise for investors
In accordance with the decision of the central government, Hainan has an active policy of attracting investment from other regions of China, as well as from abroad. Restrictions are gradually being lifted in industries where there were serious obstacles for foreign capital. Thus, since February 2021, the Chinese State Council issued a special decree, highlighting the list of areas of activity inaccessible to foreign business in the southernmost province of China that was reduced from 33 to 27.
The island pursues a targeted policy to remove trade barriers, simplify business registration and taxation procedures. As a result, in recent years, it has become much easier to register a company on Hainan, carry out product certification and get a loan. The authorities have significantly reduced the tax burden by taking a number of measures to improve business climate, revitalize markets and internationalize the province's legal framework.
The local administration pays close attention to issues related to the protection of intellectual property rights. Thanks to the measures taken in recent years, Hainan has become one of the most advanced regions of China in this area. On December 31, 2020, a special court was set up on the island to deal with relevant issues. Similar instances in China exist only in Beijing, Shanghai and the city of Guangzhou (southern province of Guangdong).
Boosting consumption
One of the main tasks in the development of Hainan's Free Trade Port is the formation of a developed zone of international consumption on the island. Since 2019, the province has held promo campaigns aimed at boosting tourism, retail and hospitality.
In 2011, the Chinese government launched a pilot program to develop Hainan's duty free chain. Over the past 10 years, the number of these shopping facilities has increased to nine: four are located in the resort city of Sanya on the southern coast, the same in Haikou (the provincial capital) and one in the small town of Boao (eastern part of the island), where the Economic Forum for Asia is held annually.
According to official figures, by the end of 2020, annual sales of Hainan's duty free shops exceeded 120 million yuan (roughly $ 18.4 million at current exchange rates), having more than tripled in 12 months.
Hainan's free trade port
According to official data, during the period of the thirteenth socio-economic development plan (2016-2020), the annual growth rate of the province's gross regional product averaged over 10%. Hainan has become one of the key Chinese administrative units with high per capita income. Tourism, modern service sector and industries with the use of advanced technologies have played a particularly important role in improving the well-being of the locals.
In April 2018, Chinese President Xi Jinping announced the launch of Hainan's project to build a pilot free trade zone. According to the authorities' plan, the creation of a pilot zone will give impetus to the processes of globalization of the island's economy and increase the attractiveness of the Chinese province for foreign investors. It is expected that by 2050 Hainan will become a unique international cluster with an advanced economic system, which includes a free trade zone, campuses of the best universities, the most modern scientific laboratories and the headquarters of world corporations.
