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 plan for 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 Hainan Province.
“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,” said 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, the province became the first among Chinese regions to successfully implement a number of innovative ideas; the island recently announced the removal of duties on a wide range of industrial products, Hainan authorities began to pursue an active policy of attracting qualified foreign personnel to strategically important industries and took unprecedented steps to increase the inflow of foreign capital.
According to official data, thanks to changes in the past year, the number of market entities on Hainan increased by 30.86%, exceeding 310,000 commercial organizations.
According to the local administration, the province has also made great strides in implementing a program to eliminate risks that could potentially stall sustainable economic development.
Space and deep sea exploration
Hainan has made significant progress in the development of aerospace technology. July 23rd 2020, the Tianwen-1 research probe was launched to Mars from the Wenchang cosmodrome using the Changzheng-5 carrier rocket, and four months later on November 23rd Chang’e-5, which delivered lunar soil samples to Earth, was sent to the moon.
Major advances have also been achieved 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.
Other areas of research in which the province has shown notable success over recent years include the breeding of varietal seeds and the promotion of plant breeding projects.
Authorities are actively working to create innovation clusters on the island and encouraging the opening of branches of leading foreign universities and educational institutions.
Hainan is actively encouraging innovative companies, both big corporations and small firms to settle on the island. 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 bright future 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.
In February 2021, the Chinese State Council issued the “Special Administrative Measures for Foreign Investment Access of Hainan Free Trade Port (Negative List) which has 27 items, compared with the 33 items of the 2020 version of the national and pilot free trade zone foreign investment access negative lists.
The island pursues a targeted policy to remove trade barriers, simplify business registration and taxation procedures. As a result, 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 the business climate, revitalize markets and internationalize the province’s legal framework.
The local administration has focused on 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, the Hainan Free Trade Port Intellectual Property Court was established.
Only Beijing, Shanghai and Guangzhou have similar courts.
Boosting consumption
One of the main tasks in the development of Hainan’s Free Trade Port is the formation of an international consumption development zone on the island.
In 2011, the Chinese government launched a pilot program to develop Hainan’s duty free industry. Over the past 10 years, the number of shopping facilities has increased to nine: four are located in Sanya on the southern coast, the same in Haikou (the provincial capital) and one in the small town of Bo’ao (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, the modern service sector and industries with the use of advanced technologies have played a particularly important role.
In April 2018, Chinese President Xi Jinping announced the launch of Hainan’s project to build a pilot free trade zone. According to the 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 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.
Related article: Tesla, EDF, Kovosch, Hungarian Savings and Commercial Bank and General Electric have arrived in Hainan free trade port
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