Tropical Island at Forefront of China’s Next-Phase Reform and Opening-up

CHINA has decided to support Hainan in developing the entire island into a pilot free trade zone by gradually exploring and steadily promoting the establishment of a free trade port with Chinese characteristics. Chinese President Xi Jinping made the announcement during a speech to commemorate the 30th anniversary of the founding of Hainan Province and the Hainan Special Economic Zone （SEZ） on April 13.

The Hainan SEZ is Chinas largest free trade zone， as well as the countrys first free trade port since the founding of the Peoples Republic of China in 1949. “As an isolated island， Hainan can only develop and catch up with the pace of the countrys growth with the worlds highest degree of opening-up，” said Chi Fulin， head of the Hainan-based China Institute for Reform and Development.

Chi， 67， a former official who left Beijing for Hainan in October 1987， was among 100，000 employees across the country to find opportunity and fortune in the burgeoning province in the late 1980s. Once remote and underdeveloped， Hainan has become one of Chinas most open and dynamic regions and a top tourist destination. Xis speech highlighted Hainans special advantages– including its status as Chinas biggest SEZ， its unique geographic location， and the best ecological environment in the country. These qualities have made it an ideal testing ground for reform and opening-up.

Xi urged the province to give priority to opening-up， implement a more proactive opening-up strategy， speed up the establishment of new institutions of an open economy， and make new ground in opening-up.

Exchanges in international energy， shipping， commodities， and carbon trading will be established in Hainan. The island will also focus on modernizing its service industries， such as tourism， the Internet， healthcare， finance， and hosting conferences and exhibitions.

Qian Jiannong， senior vice president of Fosun International Limited， investor of the first Atlantis resort in China， has high hopes for Hainans future.“Hainan is the only tropical island province in China. The era of sightseeing is behind us， and the era of leisure and resort is coming，” said Qian. The 540，000-square-meter Atlantis resort， with an investment of RMB11 billion（US $1.75 billion）， opened at the end of April in Sanya， the most famous resort city in Hainan.

Biggest Testing Ground of Reform

As the smallest province but biggest SEZ， Hainan is an ideal location to test Chinas reform and opening-up. In the early 1990s， it boasted Chinas first listed private company and was home to the Yangpu Economic Development Zone， the first development zone approved for lease to foreign investors by the Chinese government. It is also the only province in the country without toll stations on its highways， due to a fee-to-tax reform in 1994.

Since 2001， the town of Boao has served as the permanent site for the Annual Conference of the Boao Forum for Asia， the first permanent site for an international conference in China. In 2005， Hainan was the first province to remove a centuries-old agricultural tax. The national strategy to build Hainan into an international tourist destination has put it on the fast track since 2010， attracting investment for high-speed railways， hotels， high-end commercial real estate， and tourism facilities.

“With the goal to be Chinas first free trade port， Hainan will start the countrys new round of reform， both on a larger scale and in more extensive areas，”said Fu Xuanchao， head of the provincial Development and Reform Commission. With the rising flow of people， goods， and capital due to the tax-free policies brought by the free trade zone and port， Hainan is expected to be a pivotal point linking the Chinese mainland with Southeast Asian countries， said Lin Jian， chairman of Hainan Ganghang Holding Limited Company， a local shipping and logistics enterprise.

“I believe Hainan will be a highly international and modernized island in another 30 years，” said Chi， who served as head of the provincial policy research office in his early years in Hainan， and later became a scholar.