Setting the standard for international outreach
Outward economy is on the rise in Hainan, China's southernmost island province that continues to staunchly pursue advanced opening-up to the outside world.
Since 2020, when an overall plan for building the Hainan Free Trade Port across the entire island was released, more than 180 policy documents related to the project have been implemented, featuring incentives like zero tariff, low tax rates and convenience. The law on the Hainan Free Trade Port came into effect in June 2021.
The China International Consumer Products Expo has been held in Haikou, capital of Hainan, annually since 2021. The third expo, which took place between April 11 and 15, occupied an exhibition area of 120,000 square meters — a 20 percent increase from the previous session.
It featured more than 3,100 quality offerings from 65 countries and regions, including the debut of 300-plus brands and 1,000-plus products. Among the island's other high-profile draws are the Hainan Li'an International Education Innovation Pilot Zone, a popular student destination on Li'an Peninsula of Lingshui Li autonomous county, and the Hainan Boao Lecheng International Medical Tourism Pilot Zone, which has become a primary channel for the entry of international pharmaceuticals and medical equipment to China.
Technology plays an integral role in the port's economic development. The three future industries of nanfan (off-season seed breeding), oceanic exploration and space technology are being cultivated and developed at an accelerated pace. In all sectors where scientific and technological innovation has been achieved, industrial chains have been upgraded in terms of high value and high tech.
As its outward orientation of economic development increases, Hainan's international "circle of friends" continues to expand, with the number of provincial-level sister cities ranking among the most in the country. The province has also seen the infusion of large-scale foreign capital, with commodity imports and exports amounting to 76.55 billion yuan ($10.9 billion) in the first four months of 2023, a year-on-year rise of 27.4 percent.
Hainan has seen its vitality and potential for economic development further enhanced by the arrival of more professionals and outside capital. In 2021, the port attracted 199,000 talents, a year-on-year increase of 63 percent. The establishment of "Chief Service Officers" to assist companies in solving problems has also bolstered the local business environment. The officers serve as a governmental liaison with enterprises, clarifying policies while protecting corporate rights and interests. The officer team in Qiongshan district, Haikou, consists of more than 90 personnel and directly serves 228 companies.
Systemic innovation has been strengthened throughout the province, with more than 130 cases of institutional innovation spotlighted. Eight of them were promoted nationwide and six won praise from the State Council. Several reforms have been implemented, such as the simplification of governmental examination and approval procedures. With transparency and forthrightness, Hainan has improved the systems of fair competition and property rights protection, promoted trust and explored the establishment of a process supervision mechanism focused on credibility.
Ecological and environmental improvements are other priorities of the province's development, balancing the relationship between infrastructure and protection and establishing a sound mechanism for realizing the value of ecological products.
Hainan has become a model in achieving the dual carbon goals in accordance with the Chinese government's ambition of peaking carbon dioxide emissions by 2030 and carbon neutrality by 2060. The province issued and implemented China's first local regulation banning disposable non-degradable plastic products and is on target to accommodate 500,000 new energy vehicles by late 2025, which will account for 20 percent of its total number of vehicles.
The province also plans to carry out nine energy conservation and emission reduction projects for development of the port in rural areas, industrial parks and logistics businesses during the 14th Five-Year Plan (2021-25) period.
Over the past five years, Hainan has continued to comprehensively expand reforms and opening-up initiatives. The provincial GDP has increased 5.3 percent annually on average since 2018, reaching 681.82 billion yuan in 2022. Its urban and rural residents' annual per capita disposable income rose by averages of 5.4 and 8.2 percent respectively during the same period. The province's use of foreign capital over the past five years has seen an average annual growth rate of 63 percent, with the total during that period surpassing that of the previous three decades.
In anticipation of achieving independent customs operations throughout the whole island by the end of 2025, Hainan has formulated and implemented three lists of tasks, projects and stress testing to prepare for that goal. Design of related systems has started, involving customs supervision measures and reform plans for sales tax.
