It is the major reform & opening up initiative put forward by General Secretary Xi Jinping with his devoted planning, deployment and promotion as well as the strategic decision made by the CPC Central Committee in the light of the overall international and domestic situation through in-depth study, overall consideration and scientific planning - to support Hainan in gradually exploring and steadily promoting the construction of the free trade port (the "FTP") with Chinese characteristics, and establishing the FTP policy & institutional system step by step and stage by stage.
The world today is undergoing a new round of major development, major transformation and major adjustment and the protectionism & unilateralism being on the rise and the economic globalization is faced with greater headwinds and undertows.
To construct Hainan FTP is the fundamental requirement for promoting high-level opening up and establishing a new opening-up economic system, is the urgent need in deepening market-oriented reform and creating a legal, international and facilitated business environment, is the strategic choice in implementing the new development concept, promoting high-quality development and building a modern economic system and is the practical action to support the economic globalization and build a community of shared future for mankind.
The Master Plan for the Construction of Hainan Free Trade Port (the "Plan") is formulated in order to thoroughly implement the spirit of the important speech delivered by General Secretary Xi Jinping in the conference celebrating the 30th anniversary of the Hainan Provincial Special Economic Zone, to carry out The Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan's Comprehensive Deepening of Reform and Opening up, and speed up the construction of the high-level FTP with Chinese characteristics.
I. General Requirements
(I) Guiding Ideology. Guided by General Secretary Xi Jinping's Socialism Ideology with Chinese Characteristics in the New Era, we are to fully implement the spirit of the 19th Session of National Congress of the CPC, as well as the second, third and fourth plenary sessions of the 19th Central Committee of the CPC. We shall uphold the Party's overall leadership, the working principle to seek improvement in stability, the new development concept, and the high quality development, and comprehensively promote the "balanced economic, political, cultural, social and ecological progress" and coordinately promote the "Four-Pronged Comprehensive Strategy"; we shall benchmark with the high-level international economic and trade rules, emancipate our mind, make bold innovation, focus on the liberalization and facilitation of trade & investment, establish a policy system which is suitable for the high-level FTP and build a Customs Special Supervision Zone with international competitiveness and influence, so as to build Hainan FTP into a bright banner and an important opening-up gateway leading China's opening up in the new era.
(II) General Principles
★ Learn from International Players.
We shall plan from a high-starting point and construct with high standards. Besides, it is a must to actively adapt to the new trend of the reconstruction of international economic and trade rules and extensively draw lessons from advanced management methods, management methods and institutional arrangements of international FTPs so as to formulate our own opening-up policy & institutional system with international competitiveness. Moreover, it is necessary to accelerate the establishment of a new opening-up economic system, enhance its driving effects on surrounding regions and create a frontier region in China that deeply integrates into the global economic system.
★ Embody Chinese Characteristics.
We shall adhere to the Party's centralized and unified leadership, insist on the road of socialism with Chinese characteristics, stick to the people-oriented principle, and practice the core values of socialism, so as to ensure the correct direction of the construction of Hainan FTP. We should give full play to the institutional advantages of the collaboration & cooperation nationwide and concentrating our efforts on major issues, mobilize the enthusiasm and creativity of all parties, gather high-quality production factors around the globe and make new breakthroughs in promoting institutional innovation, cultivating growth drivers and building a new pattern of comprehensive opening up so as to provide solid support for the realization of national strategic goals. It is also important to strengthen exchanges & cooperation with Southeast Asian countries and promote the interactive development along with the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
★ Based on the Positioning of Hainan.
We should focus on the strategic positioning of Hainan as the comprehensively deepened reform & opening up pilot area, the national-level ecological civilization pilot area, the international tourism & consumption center and the national major strategic service guarantee area designated by the state; give full play to its advantages, such as rich natural resources, unique geographical location, and possession of a super-large-scale domestic market and hinterland economy, seize the new round of important opportunity of the global scientific & technological revolution and industrial transformation and focus on the development of tourism, modern service industry and high-tech industry, to have new cooperative & competitive advantages with Hainan characteristics.
★ Highlight Reform and Innovation.
We should strengthen the awareness of reform and innovation, endow Hainan with greater reform autonomy, support Hainan to push forward reform and innovation in an all-round and vigorous way, actively explore the establishment of more flexible and efficient laws & regulations, regulatory models and management systems in line with the construction of the FTP, make great efforts to break down the institutional & mechanism barriers that hinder the flow of production factors. In addition, it is also necessary to deepen the opening up of commodity & factor flows, accelerate the institutional opening up such as rules, and drive the comprehensive and deepened reform with a high level of opening-up. During the reform, systems should be combined and integrated to make coordinated and complemented promotion of various innovation initiatives, to improve the overall efficiency of reform and innovation.
★ Remain the Bottom-Line Thinking.
We should go ahead steadily and surely step by step, make overall & comprehensive arrangements for the pace and progress of opening-up, and avoid the mentality of seeking for quick success and imminent profits. Furthermore, it is a must to deepen the efforts to streamline administration and delegate power, integrate decentralization with management, and optimize services, comprehensively implement the institutional system of convenient access and law-based process supervision, and establish regulatory standards and norms that are in line with international standards. It is necessary to strengthen major risk identification and systematic risk prevention, and establish and improve risk prevention & control supporting measures, improve the system & mechanism for prevention and control of major epidemics, and perfect the public health emergency management system, carry out the work of the normalized assessment, and rectify the deviation and the error in time, thus ensuring the correct and healthy development of the construction of Hainan FTP.
(III) Developmental Goals
By 2025, we will initially establish the FTP policy & institutional system centering on free trade and investment facilitation, with the overall business environment reaching the top level in China, substantial increase of market entities, significant improvement of industrial competitiveness, powerful and efficient risk prevention and control, gradual perfection of laws and regulations adaptable to the construction of the FTP, and remarkable advancement in the quality and efficiency of economic development.
By 2035, we have to make the FTP institutional system and operation mode more mature. To be specific, the trade & investment rules featured with freedom, fairness, rule of law and high-level process supervision will be basically constructed, thus realizing freedom & convenience of trade, investment, cross-border capital flow, personnel entry & exit, and transportation, as well as data security and orderly flow. The modern social governance pattern boasting optimized business environment, more sound laws and regulations system and more rigorous risk prevention and control system will be basically formed, making Hainan FTP become a new highland of China's opening-up economy.
By the middle of this century, we will fully complete the construction of high-level FTP with strong international influence.
(IV) Implementation Scope.
The entire region of Hainan Island will be included into the scope subject to the implementation of Hainan FTP.
II. Design of Institutional System
Supported by the free, orderly, safe and convenient cross-border flow of various production factors as well as modern industrial system and guaranteed by special tax system arrangement, efficient social governance system and sound legal system, the institutional system of Hainan FTP will be designed with focus on the liberalization and facilitation of trade & investment, subject to clear work division and mechanism measures by keeping the bottom line and avoiding systemic risk.
(I) Trade Liberalization and Facilitation. Subject to effective supervision, Special Customs Supervision Zones shall be constructed for the independent customs operations in the whole island. For trades in goods, the institutional system of liberalization and facilitation with the basic feature of "zero tariff" should be applied and the policy & measures of liberalization and facilitation with the basic characteristics of "access and operation permit", as for the trade in services.
1. Open the "first line" up.
We will set up the "first line" between Hainan FTP and other countries and regions outside the customs territory of the People's Republic of China, strengthen the entry (or exit) safety supervision, and enhance the port public health & safety, national border bio-safety, food safety, and product quality & safety control at the "front-line" border-entering (exiting) link. Subject to the fulfillment of the obligations stipulated in the international treaties to which China is a party or a member, we will formulate a list of goods and items prohibited or restricted to import and export for Hainan FTP. The goods and items other than the listed ones shall enjoy free trade under the supervision of the customs according to the law. A catalogue of commodities for import tariff shall be formulated for Hainan FTP, and for commodities other than those in the catalogue entering the FTP shall be exempted from import tariff. The trans-shipped goods delivered by the Through B/L (TBL) shall be free from taxation or inspection. The goods and articles exiting from Hainan FTP shall be subject to export control regulations. It is essential to implement convenient and efficient customs supervision, and build a "single window" on par with high international trade standards.
2. Control the "second line".
With a "second line" between Hainan FTP and other areas within the customs territory of the People's Republic of China (hereinafter referred to as “the mainland”), when goods enter "the mainland" from Hainan FTP, the relevant formalities shall be handled according to the import regulations in principle, and customs duties and import link taxes should be levied according to the regulations. For the goods containing no imported materials produced by the encouraged industries, enterprises and those containing imported materials but processed in Hainan FTP with more than 30% (including) added value, the import tariff will be exempted when they enter the mainland through the "second line", and the import value-added tax and consumption tax shall be levied in accordance with the regulations.
Luggage and post articles entering the mainland from Hainan FTP shall be supervised and taxed according to the rules and regulations. The import management of the transportation means from Hainan FTP to the mainland shall be streamlined. Goods, articles and transportation means entering Hainan FTP from the mainland shall follow the Chinese logistic rules and regulations. The mainland's goods to be shipped to the mainland via Hainan FTP shall be free from customs declaration formalities, but should be loaded and unloaded at the customs-supervised workplace (site) in the FTP, and should be stored with obvious marks to separate from other customs-supervised goods,. The site operators shall obey the supervision requirements of the customs, and disclose the information of goods in and out of the site to the customs.
3. Freedom in the island.
The customs will implement low-intervention, efficient and precise supervision over the enterprises and institutions in Hainan FTP so they can enjoy free production and operation in the island. The customs formalities shall be streamlined for the goods shipped from abroad and destined to other countries or regions for the reloading, sorting and LCL at Hainan FTP. The goods can be stored in preferred site with no time limit and those subject to "zero-tariff" policy shall be free from the customs’ routine supervision.
4. Promote service trade liberalization and facilitation.
It is indispensable to implement the negative list system for cross-border service trade, and break down all kinds of barriers under such service trade modes as cross-border delivery, consumption abroad and movement of natural persons, and give national treatment to outbound service providers. At the meantime, we should carry out supporting fund payment and transfer system for cross-border service trade and further standardize the domestic regulations affecting the service trade liberalization and facilitation in terms of notification, qualification requirements, technical standards, transparency, regulatory consistency, etc.
(II) Investment liberalization and facilitation.
Hainan FTP shall relax its market access system to a large extent, strengthen property rights protection, ensure fair competition, create an open, transparent and predictable investment environment, and further stimulate the vitality of various market players.
5. Implement the market access commitments system.
Hainan will strictly implement the "market access negative list system", and those players in the fields with mandatory standards that can be “managed” can skip the license and approval in principle by establishing and improving the filing system. Market entities may carry out investment and business activities once they promise to meet the relevant requirements and submit relevant materials for filing. The filing institutions shall assume the censoring responsibility once they receive the filing. Hainan FTP shall implement the management system of pre-access national treatment plus the negative list for foreign investment, and substantially reduce the prohibiting and restrictive provisions.
6. Innovate and improve investment liberalization and facilitation system.
Under the investment facilitation system focusing on process supervision, we will develop policies and systems to facilitate the establishment based on electronic licenses, the operation mainly based on "quick response", "little intervention", the cancellation mainly based on the announced commitment and optimized procedures, and the bankruptcy mainly based on diligently-performed duties.
7. Establish sound fair competition system.
The basic position of competition policies must be enhanced to ensure that all market entities that are featured with different types of ownership enjoy equal treatment in terms of factor acquisition, standard setting, access permit, business operation, preferential policies, etc. Domestic and foreign enterprises shall be treated equally for government procurement.
The fair competition market order shall be maintained by strengthening and optimizing anti-monopoly law enforcement, breaking administrative monopoly, and preventing market monopoly.
8. Improve the property rights protection system.
The right of private and legal persons in terms of acquiring, using, disposing and inheriting property as well as the right of the owner of the property expropriated to receive compensation when expropriating private and legal persons' property according to law must be protected. We will implement the CompanyLaw and other laws & regulations, and strengthen the protection for the small and medium-sized investors. Moreover, it is of great urgency to increase penalties for infringement of intellectual property rights, and establish and improve the market entities' classified supervision and punishment of discredit and other mechanisms in the field of intellectual property rights. More efforts shall be made to strengthen the application of blockchain technology in intellectual property transactions, evidence storage and other aspects, to explore new models suitable for the development of the FTP.
(III) Cross-border capital flow liberalization and facilitation.
We will adhere to financial services for the real economy, focus on trade & investment liberalization and facilitation, open up capital projects in stages, and orderly promote the free & convenient capital flow between Hainan FTP and foreign countries.
9. Establish a multi-functional free trade account system.
A basic platform for Hainan's financial opening to the outside world will be set up based on the existing domestic accounts of home and foreign currencies and free trade accounts, and a capital "electronic fencing" will be established by separating financial accounts, so as to provide basic conditions for the realization of the cross-border capital flow liberalization and facilitation between Hainan FTP and foreign countries.
10. Facilitate the capital flow of cross-border trade and investment.
We will further promote the facilitation of trade settlement in terms of cross-border goods trade, services trade and new-type international trade, and turn the bank's authenticity censoring from pre-event audit into post-event audit. In in the link of cross-border direct investment transaction, we shall simplify the management according to the mode of national treatment plus negative list before access, improve the convenience of registration and exchange in the exchange link, and explore a new form of cross-border investment management to adapt to the market demand. In the field of cross-border financing, we shall explore the establishment of a new foreign debt management system, pilot the foreign debt management framework in the link of merger and transaction, improve the filing and registering management in terms of enterprises' foreign debt issuing, comprehensively implement the macro prudential management for full-caliber cross-border financing, steadily expand the scope of cross-border asset transfer, and improve the level of foreign debt's fund exchange facilitation. In the field of cross-border securities investment and financing, focus should be laid on serving the needs of real economy investment and financing, support the development of Hainan's industries with characteristics and comparative advantages, give priority to them in terms of overseas listing and issuance of bonds, and simplify exchange management.
11. Accelerate the opening up of financial sector to both domestic and overseas markets.
Hainan FTP shall take the lead in implementing the opening-up policy in the financial markets. The construction of international marketplaces of energy, shipping, property rights, equities and the establishment of settlement centers will be supported and accelerated.
12. Speed up financial reforms and innovations.
We support the innovation and standardized development of financial services in the housing rental market and the development of REITs, and steadily expand industrial financing channels in various forms, and relax the restrictions on the scope of foreign-invested enterprises’ utilizing their capital funds. At the same time, innovations will be made with respect to policies, products and instruments of scientific and technological finance.
(IV) Access liberalization and facilitation.
More open talent policy and stay and residence policy will be designed for high-end talents based on the development requirements of Hainan FTP to attract talents. We will enforce more exit and entry management facilitation policies while effectively controlling foreign-related security risks and hazards.
13. Exit and entry facilitation to high-level talents of foreign nationalities engaging in investment and entrepreneurship, lecturing and exchanging activities, and business and trade.
It is of importance to improve the foreign talents evaluation mechanism, evaluate the categories of human resources with the pay level as the main indicator, and establish a market-oriented talent mechanism. A negative list management mode should be enforced regarding to work permit of foreign personnel in Hainan FTP, and more liberal stay and residence policies on foreign professional and technical staff should be adopted. Qualified overseas personnel should be allowed to hold the post as legal representatives of the statutory bodies, public institutions and state-owned enterprises in Hainan FTP. Easy temporary entry and exit policies on commercial personnel will be adopted.
14. Establish sound talent service and management system.
Information sharing and linked approval and inspection will be adopted for work permit, visa, and stay and residence. More efforts will be made to the establishment of talent service centers, the provision of services on employment, education and living and the protection of the lawful rights and interests of talents.
15. Apply a more convenient entry and exit management policy.
We will apply progressively visa-free entry policy to a broader range and gradually extend the visa-free duration of stay and entry-exit frontier inspection and management optimized to facilitate the customs clearance of commercial personnel and tourists travel by cruise ships.
(V) Transportation liberalization and facilitation.
A highly free, convenient and open transportation policy will be issued to advance the construction of international shipping and aviation hubs along the new land and sea channel in western China and to speed up the construction of a modern comprehensive transportation system.
16. Establish a more open shipping system.
We will establish Yangpu-Port-of-China as the port of registry and support ship registration at Hainan FTP. Research will be made to develop shipping operation and management system and a ship crew management system of Hainan FTP. We should gradually release restrictions on airspace control and sea routes and traffic rights, optimize shipping routes, encourage the increase of transport and open more shipping routes and liners.
17. Facilitate transportation and improve service level.
In addition to the joint boarding inspection of ships, we should develop an efficient, convenient and high-quality flag country special supervision policy, provide higher-quality and more efficient financial services for ship and aircraft financing, including revoking ship and aircraft outbound financing limitations and exploring methods of replacing security deposit with insurance, enhance the construction of the facilities and equipment for transportation and customs clearance between mainland China and Hainan FTP, reasonably provide stuff, and improve the liberalization and facilitation of transportation
(VI) Facilitate the safe and orderly cross-border data transfers.
Subject to secure and controllable data transfers, we should expand the openness in the data field and innovate the design of security systems to achieve sufficient data aggregation and develop a digital economy.
18. Orderly open up communication resources and businesses.
Value-added telecommunication services will be made available and we should gradually lift the limitations on the proportion of share of foreign capital. Enterprises registered in Hainan FTP in substance or whose service facilities are at the port should be allowed to conduct online data processing and transaction processing and other businesses across the entire port and the globe and to gradually conduct businesses across the country on the premise of controllable security. Basic telecommunication services should be opened up in a safe and orderly manner. It is of great importance to establish international pilot projects on internet data interaction, international submarine optical cables and landing stations, and an international communications access bureau.
(VII) Modern industrial system.
Vigorously develop tourism, modern service sector and high-tech industries and continuously enhance the foundation and competitiveness of real economy.
19. Tourism.
Subject to ecological and green development, we should build Hainan into an international tourist consumption center by driving the in-depth integration of tourism with culture and sports, medical care, elderly care and health promotion, improving the development level of Boao Lecheng International Medical Tourism Pilot Zone, building culture and tourism industrial parks, developing characteristic tourist industry clusters and nurturing new business forms and patterns of the tourism industry, to create a tourism demonstrative province across China. Meanwhile, we should boost Sanya to develop into a home port to international cruise ships, support the construction of cruise ship tourism pilot zone and attract more international cruise ships to register. Moreover, we will set up pilot areas for reform, development and innovation of the yacht industry and support the development of tourist holiday resorts and 5A scenic areas at national level.
20. Modern service industry.
Efforts should be made to pool global innovation elements, deepen opening up at home and abroad and attract trans-national companies to set up their headquarters at the port. It is of great urgency to bring innovation to port management system and mechanism, facilitate the integration of port resources, expand the shipping service industrial chain, promote the growth of bonded warehousing, international logistics distribution, transit trade, bulk commodity trade, sales exhibitions of imported goods, distribution processing, container assembly and disassembly, and other businesses, improve the management and service capacity of global supply chain, develop international shipping hubs, and advance the integrated development of ports, industries and cities.
Build Hainan into an international design island, an international education innovation island in science, engineering, agriculture and medicine, and a regional international exhibition center, widen the channels of professional service industry to the outside world. Efforts should also be intensified to improve marine service infrastructure, develop marine logistics, marine tourism, marine information services, marine engineering consultation, marine finance, marine commerce, etc. and build a marine service system with international competitiveness. Establish national foreign cultural trade bases.
21. High-tech industries.
By focusing on platforms and carriers, industrial capacity and scale should be proliferated and prioritize the development of the IoTs, AI, blockchain, digital trade and other information industries. Relying on Wenchang International Space City and Sanya Institute of Deep Sea Science and Engineering (SIDSSE), we shall plan and build key science and technology facilities and platforms and foster deep sea and deep space industries. Advanced manufacturing industry should be expanded by focusing on eco-environment protection, biomedicine, new energy vehicles and smart cars. We should give play to the advantages of Nanfan Scientific and Research Breeding Base and establish the global tropical agriculture center and the transfer base for introducing global animal and plant germplasm.
Build the island into a smart Hainan.
(VIII) Tax system.
A tax system in line with high-level FTPs will be gradually established according to the principles of zero tariff, low tax rate, streamlined tax structure, strengthened law enforcement, and phased implementation.
22. Zero-tariff.
Before the ignition of independent customs operations, goods and items under the management of zero-tariff lists will be exempt from import duties, import value-added tax and consumption tax. After the island starts independent customs operations and the tax structure is streamlined, Hainan shall apply the zero-tariff policy to the commodities outside the prohibited access category and permitted to be imported from Hainan FTP.
23. Low tax rate.
Preferential corporate income tax rates are applicable to enterprises running their businesses at Hainan FTP, and preferential individual income tax rates will be granted to eligible individuals.
24. Streamlined tax structure.
Ways for streamlining the tax structure will be explored by combining with the orientation of China’s tax reform, in addition to reform in the categories of taxes, reduction of the proportion of indirect taxes, introduction of more simple and more scientific structure of tax categories, fully optimized elements of tax system, remarkably reduced tax burden, more explicit attribution of incomes, and generally balanced government revenues and expenditures.
25. Strengthen the rule of law.
Tax administration departments should assess the tax payment behavior based on the places where substantial economic activities take place and value is created and publish early warnings. They should formulate concise and easy-to-enforce criteria for the substantial place of business and place of residence, intensify the recognition of tax evasion risks, prevent tax base erosion and profit shifting, and eradicate the possibility of “tax haven”. They should also take active part in international tax collection and supervision cooperation and advance sharing of tax-related intelligence and information and take relevant measures to discredited enterprises and individuals in accordance to law and regulations.
26. Phased implementation.
The arrangements of zero tariff, low tax rate and streamlined tax structure should be carried out according to the different phases of building Hainan FTP and eventually create an internationally competitive tax system.
(IX) Social governance.
Vigorously promote the reform of government bodies and transformation of government functions, encourage the application of blockchain and other integrated technologies into the modernization of the governance system and capacity, and set up a systematic and complete, scientific and standard, and effectively-operated FTP governance system.
27. Deepen the reform of government institutions.
Efforts should be made to further promote the reform of Hainan’s Large Department System by integrating the same or similar functions and responsibilities scattered in different departments, and promote the merger of departments with similar functions. The proportion of comprehensive administrative civil servants should be controlled; the administrative staffing should be adjusted and targeted at supervision departments, and a market-oriented appointment system of professionals should be implemented.
28. Promote transformation of government functions.
Progress should be made in strengthening supervision legislation and law enforcement, expanding the application of the social credit system, further developing the “an oversight model of random inspection and public release across the board” market supervision system, and conducting inclusive and prudential supervision of emerging commercial activities.
We should give full play to the role of modern information technologies such as “Internet +”, big data, and blockchain and establish and standardize government service norms through government services and other platforms, deepen reforms to streamline government administration and realize “one-stop” e-government services, strengthen orderly sharing of data, improve the government services and governance level. The promises made by the government must be fulfilled earnestly. The loss incurred for failing to keep the promises or for failing to execute them in place shall be compensated in a timely manner.
29. Create a social governance pattern of co-building, co-governance, and sharing.
The reform of the household registration system should be deepened to further relax the residence migration policy, and implement a unified residence permit system across the island with the citizenship number as the only identifier. Greater autonomy should be given to industrial organizations so as to play to their important roles in maintenance of market order, standards formulation and implementation, and mediation of industrial disputes. Greater authority for grassroots governance should be given to communities so as to improve community services and speed up governance innovations.
30. Innovate the ecological civilization system and mechanism.
We should further promote the construction of the National Ecological Civilization Pilot Zone (Hainan), fully establish the system for efficient use of resources, and improve the natural resource property rights system and paid use system. Efforts should be made to effectively promote the construction of planning system national land space and implement differentiated control of the usage of natural ecological spaces; improve the natural resource assets franchise rights and other systems in nature reserves and explore the mechanism of realizing the value of ecological products; establish national parks such as tropical rain forests and build a system of natural reserves with national parks at the core; and explore to develop a market-oriented sustainable ecological protection compensation mechanism led by the government and participated by enterprises and communities. It is vital to speed up the construction of a unified investigation, evaluation, monitoring and rights registration system for natural resources, and improve the ecological environment monitoring and evaluation system.
(X) Rule of law.
A FTP law system with the Hainan FTP Law as the basis and local regulations and commercial disputes resolution mechanisms as important components will be formulated so as to create a world-class FTP legal environment.
31. Formulate and implement the Hainan FTP Law.
Each institutional arrangement in the FTP will be made clear in legal form so as to provide principle and basic legal guarantee for the construction of the FTP.
32. Formulate laws and regulations of the special economic zone.
Subject to compliance with the constitutional provisions and laws and basic principles of administrative laws and regulations, Hainan will be supported to fully exercise the legislative power of the special economic zone and formulate the laws and regulations of the special economic zone based on the reality of FTP construction.
33. Establish a diversified settlement mechanism for commercial disputes.
It is a must to improve the centralized trial mechanism for international commercial disputes and provide a variety of resolutions to non-litigation disputes, such as international commercial arbitration, and international commercial mediation.
(XI) Risk prevention and control system.
Effective measures should be formulated and implemented so as to prevent and reconcile major risks in trade, investment, finance, data flow, ecology and public health in a target-oriented manner.
34. Trade risk prevention and control.
The infrastructure and regulatory facilities with information system and technical equipment will be established at open ports and "second-tier ports" with high standards, for intelligent and precise supervision and the island's "passenger flow, logistics and capital flow" information management system, social management and supervision system and port supervision system "three lines of defense" will be relied on to form Hainan social management information platform and implement all-weather dynamic monitoring for non-designated areas. We should strengthen the supervision of specific areas, set up comprehensive law enforcement spots in areas without port inspection agencies and conduct real-time monitoring and processing of transportation tools, goods and articles loading and unloading. All the goods, articles, personnel and means of transport between Hainan FTP and the mainland shall be imported from the port.
The configuration of the supervision equipment and facilities in the port should be improved. The customs shall be responsible for the supervision and investigation of smuggling in the port and other customs surveillance zones. The government of Hainan Province is responsible for anti-smuggling comprehensive management of the whole province and evaluates the comprehensive anti-smuggling management of lower-level governments. A joint anti-smuggling prevention and control mechanism will be set up with Guangdong Province, Guangxi Zhuang Autonomous Region and other places.
35. Investment risk prevention and control.
We should improve the process supervision system that adapts to the investment rules, and strictly implement the review responsibilities of the filing institutions and the filing responsibilities of the filing subjects. Make clear and strengthen the rules and standards for process supervision, consolidate regulatory responsibilities, implement effective supervision over the whole life cycle of investment and operation activities according to the law, implement tolerant and prudent supervision over new technologies, new industries, new formats and new models, and implement key supervision over high-risk industries and fields. In addition, a sound legal liability system and strict disciplinary measures must be formulated and taken over those who provide false filing information and running illegal operations and so on. Security review of foreign investment should be well developed to effectively guard against national security risks while creating a stable, transparent and predictable investment environment.
36. Financial risk prevention and control.
We should optimize the financial infrastructure and legal environment, strengthen the protection of financial consumers' rights and interests, rely on the information monitoring and management system for capital flows, establish and improve the system for monitoring and preventing capital flows and risks. A macro prudential management system for cross-border capital flows in the FTP will be set up to strengthen the identification of major risks and the prevention of systemic financial risks. Strengthen the review of anti-money-laundering, anti-terrorist-financing and anti-tax-evasion review, research and set up money-laundering risk assessment mechanism and regularly assess the money laundering and terrorist financing risks. Build a financial supervision and coordination mechanism suitable for the construction of Hainan FTP.
37. Prevention and control of network security and data security risks.
We should implement thoroughly the network security level protection system with focus laid on key information infrastructure and data security, to improve the capacity and level of network security related to the construction of Hainan FTP by dint of the improved network security system. The data outbound security management system and improve data flow risk management and control measures should be established and improved.
38. Prevention and control of public health risks.
Intensified efforts should be made to the construction of public health prevention and treatment system, in order to improve our early prevention, risk assessment and timely disposal abilities with the help of monitoring and early warning, emergency response platform and decision-making command system for infectious diseases and public health emergencies.
With respect to the plan to strengthen the construction of disease prevention and control system, it is of value to establish provincial centers for disease prevention and control with high standards, establish Hainan Branch of the National Tropical Disease Research Center, accelerate the infrastructure construction of disease prevention and control institutions at all levels and optimize the allocation of laboratory testing resources.
The team building for public health talents is also necessary since it can improve the capabilities for monitoring and early warning, inspection and testing, on-site epidemiological investigation, emergency response and medical treatment. A three-level biosafety protection laboratory and an institute of infectious disease control should be established in place, to strengthen the capability of comprehensive testing and rapid screening, and optimize the reserve and production capacity guarantee system for important health emergency materials.
With improved and optimized treatment system for major epidemics and a medical service network for infectious diseases, the infrastructure and medical conditions of infectious disease medical centers and infectious disease hospitals can be improved with the help of provincial and municipal infectious disease medical centers based on general or specialized hospitals. Focus on strengthening the construction of medical service capacity for infectious diseases at the grass-roots level, and improve the diagnosis and treatment capacity of infectious diseases in county-level general hospitals.
Build a grid-based intensive medical group to promote the down streaming of resources and the integration of medical care and prevention. Improve the standardized construction of basic medical and health institutions, and strengthen the capacity for the diagnosis and treatment of common diseases, public health services, and health management.
With strengthened international health and quarantine cooperation and international epidemic information collection and analysis and improved support for the health and quarantine technical facilities in the port, we can have a first-class international travel health care center.
Moreover, it is a must to strictly implement the health declaration system for entry-exit personnel, enhance the health quarantine of vehicles, personnel, goods and articles coming from the high-risk countries or regions, strengthen the joint defense and control and the port quarantine and prevention line.
For infectious diseases around the globe, we should strengthen monitoring, promote the early warning of the risk of infectious diseases abroad, and strictly prevent the cross-border spread of major infectious diseases, in addition to a joint prevention and control mechanism for overseas epidemics and pests, which will be coordinated by the customs and other departments. The risk warning and fast-response supervision capabilities regarding the quality and safety of import and export commodities should be improved, especially the supervision of high-risk sensitive import and export commodities.
39. Ecological risk prevention and control. Strictly implement the management system of entry and exit environmental safety access administration system, and prohibit the import of foreign garbage. The construction of facilities for the disposal of medical waste and other hazardous wastes should be pushed and the emergency preparedness and response capacity for emergencies involving the ecological environment improved. A sound environmental credit evaluation system is also essential.
III. Phased Step-by-Step Arrangement
(I) Key tasks to be completed before 2025.
Subject to effective supervision, the opening up will be carried forward in an ordered way with focus on trade and investment liberalization and facilitation, to promote the convenient and effective flow of various elements, since independent customs operations throughout Hainan Island can be initiated in due time based on early achievements.
1. Strengthen the establishment of Special Customs Supervision Zones.
An import and export management system featuring “free flow through the first line and efficient control at the second line” will be first adopted in Yangpu Bonded Port Area and other qualified Customs Supervision Zones. More special customs supervision zones will be set up based on the need for the construction of Hainan FTP.
2. Implement zero-tariff policy on certain imported goods.
Except for goods prohibited from tariff exemption or import by laws and regulations, the zero-tariff negative list management will apply to production equipment imported by enterprises for own use; the zero-tariff positive list management will apply to ships, aircrafts, other means of transport and yachts imported to the island for transportation and tourism; the zero-tariff positive list management will also apply to raw and auxiliary materials imported for production within Hainan, or for production and processing (or in the process of trade in service) in a mode where final products would be exported to overseas markets; positive list management will apply to imported goods consumed by residents of Hainan without charging tariff.
Goods and items under zero-tariff list management will be exempt from import duties, import value-added tax and consumption tax. The lists will be dynamically adjusted by relevant departments according to practical demand and supervision requirements of Hainan. The quota for offshore duty-free shopping will be raised to RMB 100,000 per person per year, and the categories for duty-free goods will be expanded.
3. Reduce restrictions on cross-border trade in service.
Initiatives should be taken to standardize domestic rules and regulations that affect the facilitation of trade in service in key areas. The negative list of cross-border trade in service in Hainan FTP should be issued and national treatment should be granted to overseas service providers. Furthermore, it is important to establish the Hainan International Intellectual Property Exchange, foster institutional innovation in the transfer, utilization and taxation of intellectual property; and carry out law-based exploration for the securitization of intellectual property.
4. Implement “the most-simplified-approval” investment system.
The special list for relaxing market access and the negative list for foreign investment access in Hainan FTP should be introduced. Define the geographic range for business operations of foreign-invested enterprises in specific service sectors that are opened up at early stage.
Meanwhile, we should establish and improve the national security review and environmental standards for industrial access, social credit system among other mechanisms to promote the most-simplified-approval system in all respects. Deepen the reform on streamlining business license approval from the business license. A sound process supervision system based on credit supervision and compatible with the negative list management should be set up.
5. Promote pilot reform on cross-border securities investment and financing policy.
We should support domestic enterprises registered in Hainan FTP to issue stocks abroad according to their domestic and overseas financing schemes and priority will be given to support enterprises in financing through issuing bonds overseas.
The Development and Reform Department of Hainan Province will be in charge of the registration management of foreign debt issued by domestic enterprises. Pilot programs on cross-border asset management businesses will be explored to further facilitate foreign exchange operations for cross-border securities investment and financing. A pilot program will also be developed for enterprises in Hainan FTP to register foreign exchange directly at banks when they go public abroad.
6. Accelerate the opening up of financial sector to both domestic and overseas markets.
We will promote financial institutions in Hainan in developing and building up the capability of serving the opening up process, and supporting Hainan FTP to take initiatives to implement opening policies in the financial sector. Support will be offered to qualified overseas institutions dealing with securities, funds, and futures businesses to set up wholly or jointly owned financial institutions in Hainan FTP and to financial institutions to develop new financial products and improve quality and efficiency of services in Hainan based on development needs of key industries such as tourism, modern service, and high-tech industry, etc. Meanwhile, the development of relevant over-the-counter derivative businesses will be promoted to address needs for the construction of Hainan FTP. Hainan will be supported in building property rights trading venues on the basis of optimizing and upgrading existing trading venues, and non-residents will be allowed to participate in trading and fund settlement according to relevant regulations.
Besides, the established trading venues in Hainan FTP are supported to roll out rules and institutional systems aligned with international practices in terms of membership, trading, taxation, clearance, settlement, protection of investor rights, and anti-money laundering and establish property insurance, life insurance, reinsurance, mutual insurance and self-insurance institutions and companies in Hainan FTP within the legal framework.
7. Enhance financial sector’s capability of serving the real economy.
The issuance of corporate credit bonds, project revenue notes and special bonds for housing lease, etc. will be supported. Pilot projects on the securitization of high quality tourism assets with stable cash flow will be pushed. We will support financial institutions to carry out premium financing, warehouse receipt loans, receivables pledge, intellectual property pledge and other businesses in the field of trade in service provided that the laws and regulations are obeyed and risks are effectively prevented; support marine-related high-tech enterprises to take advantage of equities and intellectual properties rights, and promote the regulated and controllable development of shipping, logistics and supply chain-related financial products. Initiatives should be taken to apply research achievements in the fields of artificial intelligence, big data and cloud computing in Hainan FTP in a law-abiding and orderly way. We should explore and develop commercial medical insurance services connected to international commercial insurance payment systems and support financial institutions of the insurance sector in developing cross-border medical insurance products in collaboration with overseas institutions.
8. Apply a more convenient visa-free entry policy. More visa-free application channels should be made available to foreigners including self-declaration and invitation and reception by local entities, apart from invitation and reception by travel agencies. The restrictions on foreigners to apply for visa-free entry will be relaxed and foreigners will be allowed to apply for visa-free entry to Hainan for reasons including commercial trade, visit, family reunion, medical treatment, exhibition and sports event, etc. Apply the 15-day visa-free stay policy to foreign tourist groups traveling by cruise ships.
9. Apply a more open shipping policy.
We should establish Yangpu-Port-of-China as the port of registry, streamline the inspection process, gradually release restrictions on the statutory survey of ships, set up the Hainan FTP international ship registration center, and creatively establish convenient and efficient ship registration procedures. Besides removal of the restriction on foreign shareholding proportion for ship registration body, domestically built ships registered in Yangpu-Port-of-China and engaged in international shipping are entitled to export rate rebates as in the situation of export to the extent of effective supervision and risk control. Domestic ships with both domestic and foreign trade goods on board which transit at Yangpu Port are allowed to refuel with bonded oil required for the voyage, or tax rebate could be claimed if the ships refuel with locally produced fuel oil for the voyage. For container cargoes that meet relevant conditions and transit at Yangpu Port for final departure from China, a trial policy of tax rebate at port of departure will apply. The integrated development of shipping and port in Qiongzhou Strait should be sped up.
10. Practice more open policies on air transport.
On the basis of reciprocity, we should promote the realization of the third and fourth freedom rights for the carriers of both parties to and from Hainan in bilateral air transportation agreements, and expand air freedom arrangement including the fifth freedom right necessary for building the Hainan FTP in accordance with China’s air transportation policies; support Hainan in trial implementation of the seventh air freedom.
Airlines from relevant countries and regions will be permitted to carry passengers or freight via Hainan to a third country or region. Combined transportation service should be provided to international transfer passengers and their luggage. Support will be provided to airline companies with Hainan as their core base to expand international flight routes. Both inbound and outbound flights to refuel with bonded aviation oil are allowed.
11. Facilitate cross-border data flow.
We should launch pilot projects on security management of cross-border data transfers to explore and develop a convenient and secure cross-border data transfer mechanism within the framework of national security management system for cross-border data transfers.
12. Deepen industrial opening-up.
In addition to support for the development of headquarters economy, we should hold the China International Consumer Goods Expo. The import and sale of foreign exhibits during national level exhibitions will be entitled to tax exemption policy which will be formulated by relevant departments. Support Hainan in introducing high quality foreign medical resources from abroad.
Draw from the trial experience of regional medical centers to explore and support the building of regional medical centers in Hainan. High-level universities and vocational colleges specialized in science, engineering, agriculture and medical science are permitted to run international schools independently in Hainan FTP. Chinese top-level universities are encouraged to set up jointly-run schools as independent legal entities in Hainan with world-renowned foreign colleges. The Hainan national blockchain technology and industrial innovation and development base should be built.
13. Optimize tax policy arrangements.
From the date of issue of the Plan, enterprises registered in Hainan FTP that have a practical operational record are entitled to a reduced corporate tax rate of 15%. For tourism, modern service and high-tech industries, enterprises established in Hainan FTP are entitled to corporate tax exemption for income from newly increased overseas direct investment before year 2025.
Capital expenditures that meet certain requirements are allowed to be fully deducted from the taxable income or to be depreciated and amortized at an accelerated speed in the current accounting period. High-end talents and highly-demanded talents employed in Hainan FTP are entitled to the personal income tax rate of 15%. The list management will apply to high-end talents and highly-demanded talents who enjoy the mentioned preferential tax rate, and Hainan province will consult with the Department of Finance and the State Taxation Administration to roll out specific administrative measures.
14. Strengthen central financial support.
The central government will provide comprehensive financial support to make reasonable compensation for the shrinkage of Hainan's local fiscal revenue. Encourage Hainan to issue local government bonds within the limits approved by the State Council to support facility construction of the FTP. The amount of special bonds issued by local governments of Hainan will be steadily increased to support major infrastructure projects subject to effective risk control.
Hainan FTP should be encouraged to issue local government bonds to eligible global investors. Hainan will make overall arrangement of central funds and own financial resources to establish the Construction Investment Fund for Hainan FTP which will operate under government guidelines and market rules.
15. Be fully authorized by law.
Polices and measures in the arrangements that require adjustment of existing laws and regulations should be implemented after the authorization by the National People's Congress and its Standing Committee or the State Council. Working procedures for streamlining and adjusting existing laws or regulations should be studied and put into effect as soon as possible.
We will authorize Hainan to formulate the FTP's regulations on business registration and deregistration, bankruptcy, fair competition, expropriation and requisition. It is also urgent to roll out Hainan FTP Law.
16. Strengthen guarantee for the utilization of land and sea.
Within the red line of ecological protection and subject to compliance with key indexes such as permanent basic farmland area, cultivated and forest land area, total scale of construction land, Hainan is authorized to approve the layout adjustment of cultivated land, permanent basic farmland, forestland and construction land, and incorporate the approvals in the spatial planning process at provincial, city and county levels to the extent that the quality of land will not be undermined.
We should actively foster the integrated and coordinated development of urban, rural and reclamation areas, promote new models for construction land in small towns, and push forward the capitalization of agricultural reclamation land. A intensive development and conservation system for land resources, evaluation criteria and policy system for revitalizing and disposal of existing construction land stock should be adopted. Leverage on and advocate the experience from the three pilot rural land reforms in Wenchang County and support the entire Hainan Island to undertake in-depth rural land reforms. Guarantee to meet the sea utilization demand for national key projects according to the law.
17. Prepare for the initiation of independent customs operations throughout Hainan Island.
We should formulate and make available the catalogue for import taxation, list of restricted items for import, list of prohibited items for import, list of restricted items for export, list of prohibited items for export, administrative measures for means of transport, standardized paperwork for customs clearance with mainland customs, operating procedure for customs clearance with mainland customs and operating procedure for export clearance. More ports and facilities necessary for independent customs operations throughout Hainan Island will be opened and built.
18. Launch independent customs operations throughout Hainan Island in due time.
We will conduct overall assessments in due time on the preparatory work for the initiation of independent customs operations for Hainan Island to identify and block any safety loophole before year 2025.
Launch independent customs operations only after all preparations are done. The Yangpu Bonded Port Area, Haikou Comprehensive Bonded Zone along with other special customs supervision areas will no longer be reserved. Relevant supervision plans will be rolled out by related departments respectively. Under independent customs operations throughout Hainan Island, the current value-added tax, consumption tax, vehicle purchase tax, urban maintenance, construction tax, education surcharges among other taxes and charges will be streamlined according to the law and related work for charging and collecting sales tax in retail sale of goods and services will be started.
(II) Key tasks to be completed before 2035.
Opening-up policies and relevant systems should be further optimized and improved and the liberalization and facilitation of trade, investment, cross-border capital flow, passenger flow, and transportation and the safe as well as the orderly cross-border data flow should be comprehensively realized to promote the construction of a high-level FTP.
1. Facilitate free trade.
Further innovation will be made to customs’ supervision system to formulate non-tariff measures for trade in align with the overall national security concept and the trade management system for free access safe and convenient in goods, thus facilitating free entry and exit of overseas goods in Hainan FTP. We should develop and improve relevant rules on cross-border payment business and create satisfactory payment service market environment, improve the efficiency of cross-border payment service, and promote the facilitation of free cross-border trade in service according to the law.
2. Facilitate free investment.
We will comprehensively open up investment market access other than the fields involving national security, social stability, red line of ecological protection and major public interest. Areas where there are mandatory standards should have investment system consisting of “standard system + commitment system”. Market entities may carry out investment and operation after making commitments on complying with relevant requirements.
3. Facilitate free flow of cross-border capital.
Certain qualified non-financial enterprises will be allowed to incur foreign debts based on actual financing needs, thus realizing the total availability of exchange of foreign debts of non-financial enterprises in Hainan FTP.
4. Facilitate free entry and exit of personnel.
The restrictions on free entry and exit of personnel will be further relaxed. We will apply more relaxed temporary entry and exit policies and more convenient work visa policies for business people and move forward to improve the residence system.
5. Realize free and convenient transport.
A special ship registration censorship should be adopted. We will further relax airspace control and air route and traffic right restrictions. Domestic and overseas airlines are encouraged to increase transport capacity input and open more routes and flights. According to the bilateral air transport agreement, we should issue in priority the international route flight license to Hainan when reviewing the international route business license of foreign airlines.
6. Carry out safe and orderly cross-border data flow.
Innovation shall be made to the system design of safe cross-border data flow to explore more convenient measures for the assessment of personal information security exit. We should have institutional measures to connect inbound personal information and explore institutional arrangements for regional cross-border flows of international data, to facilitate data transmission. Initiative should be taken to participate in international rule making on cross-border data flow and establish standards and regulations for data right authentication, data transaction, data security and blockchain finance.
7. Deepen the reform of taxation system.
Enterprises registered in Hainan FTP and substantially running (except those operating in industries on the negative list) are entitled to a reduced corporate tax rate of 15%. As for individuals who have lived in Hainan FTP for 183 days full within the first tax year, the personal income tax on their comprehensive incomes and business incomes obtained within the range of Hainan FTP will be levied at progressive tax rates in excess of specific amount, which are classified into three grades: 3%, 10% and 15%. The administration authority of Hainan local taxation will be enlarged. Enterprise income tax and individual income tax will serve as shared incomes between the Central Government and the local government.
Sales tax and other domestic taxes will be vested with the local government. Hainan is authorized to independently reduce, exempt and postpone the imposition of tax beyond government funds of an eco-compensation nature and to independently collect administrative and institutional fees relating to enterprises. Administrative and institutional fees required by the Central Government will be charged according to the uniform regulations of the Central Government. The financial support policies from the Central Government will be adjusted with the changes of the tax system and be reinforced. Researches will be carried out further to improve the framework of subsidy policies to provide reference for China to formulate international rules on subsidy.
IV. Organization and Implementation
(I) Strengthen the Party’s overall leadership.
In addition to mastering Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, Party members and cadres must earnestly implement the decisions and deployment of the Party Central Committee and the State Council, strengthen consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment, increase confidence in the path, theory, system and culture of socialism of Chinese characteristics, resolutely upheld General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely upheld the Party Central Committee's authority and its centralized, unified leadership.
Moreover, we should establish and improve the whole Party’s leadership system and mechanism for the construction of Hainan FTP, give full play to the Party’s effect in overall leadership and coordination of all quarters concerned, and reinforce the Party’s leadership in all fields, aspects and processes of the construction of Hainan FTP.
With the Party’s political construction as the lead and improvement of organizing power as the key, we should comprehensively uplift the quality of Party building to provide strong political guarantee for the construction of Hainan FTP, strengthen the building of community-level Party organizations, guide all Party members to play their vanguard and exemplary roles, and turn community-level Party organizations into a strong bastion for promoting the building of a FTP in Hainan.
Improve the cadre assessment system that represents the new development ideas and correct concept of political achievements. Establish incentive mechanism and fault-tolerance and correction mechanism to encourage cadres who take a clear-cut stand to act responsibly and be practical without seeking personal gain. Core socialist values should be integrated into all aspects of economic and social development. Rectification and stressing of disciplines and reinforcement of discipline inspection and supervision shall be preserved to build a clean and upright political environment.
(II) Improve implementation mechanism.
Under the guidance of Hainan Leading Group for Comprehensively Deepening Reform and Opening Up, Hainan Province shall practically fulfill the entity responsibilities by enhancing organizational leadership and fully promoting all tasks on the construction of Hainan FTP. The Central Government and relevant state organs shall take the initiative to promote the construction of Hainan FTP according to the scheme, further refine relevant policies and measures, formulate and enact implementation schemes and ensure the immediate effect of policies. The Hainan Leading Group for Comprehensively Deepening Reform and Opening Up Office will be pushed to establish a working group on guiding Hainan to promote the construction of the FTP. The National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce, the People’s Bank of China, General Administration of Customs and other ministries shall respectively send cadres to station in Hainan for field guidance
Translated by the Foreign Affairs Office of Haikou Municipal Government
