Hainan free-trade-zone is concrete step to further facilitate global trade and investment, and concentrated efforts are needed to make this vision a reality, said Wei Jianguo, a former vice-minister of commerce and one of the country’s top experts in international trade.
The plan heralds a new stage of the reform and opening up of the Chinese economy because the island boasts the potential to compete with other international ports such as Hong Kong and Singapore, other experts said.
Under the central authorities’ plans announced on 14 April, the country’s tropical resort island would be turned into a pilot international free-trade zone and a free-trade port by 2025.
The project is expected to result in increased investment and growth in many areas, including agriculture, entertainment, nance, sports and tourism.
The country also intends to experiment with new businesses such as horse racing and sports lotteries on the island, hoping to turn it into a top international tourism destination and consumption centre.
The new measures will also support the development of international cruise operations, and will loosen yacht regulation and allow foreign investors to set up show business agencies in Hainan.
Experts said there is much to expect from Hainan because a free-trade port represents the highest level of opening by international standards and would mean that most goods and services are subject to very low or even zero tariffs.
Mr Wei told China Daily: “Not only can the plan provide guidance to promote the development of China’s inland provinces and coastal areas, but also offer a model for the development of Southeast Asian regions that are mainly agricultural and port-based economies.
“This endeavour underlines China’s resolve to strengthen globalisation and safeguard multilateralism. It lays a foundation for the country to effectively oppose rising trade protectionism, speed up the flow of global trade and facilitate international investment.”
To support Hainan’s development, more policies are likely to be implemented in the future, Mr Wei said.
“That may include not only wider opening-up policies but also broader reform measures in fields such as law formulation, investment guidelines, financial systems and visa policy.”
A detailed offcial paper said the central authorities would invite foreign firms and multinational companies to set up international and regional headquarters in Hainan.
The free-trade zone will serve as a new window for China to contribute more in solidifying regional economic integration and injecting vitality to the world economy, Mr Wei said.
“It’s a Chinese proposal that is applicable to global development. Economies around the world are encouraged to seek enhanced co-operation in developing Hainan. In this way the island can become a new engine to fuel global economic growth,” he added
Xu Hongcai, an economist with the China Centre for International Economic Exchanges, said the plans will boost the island’s international status and turn it into an economic centre that can attract international capital and talent.
More policies and improved institutional systems are needed to make the grand vision a reality, analysts said.
National Business Daily quoted Xia Feng, deputy director of the China Institute for Reform and Development, as saying: “The development of islands like Hainan is more dependent on opening-up policies than inland areas. A slew of comprehensive measures is needed to ensure the free flow of resources such as capital and skills.”
Chi Fulin, president of the China Institute for Reform and Development, said Hainan’s assets include its large area and abundant local resources that no other existing free-trade zones on the Chinese mainland can compete with: “Compared with Hong Kong and Singapore, Hainan will utilise its own resources to develop. I think it will have a late-mover advantage with faster development.”
Mr Xu, of the China Centre for International Economic Exchanges, said the development of Hainan has strategic importance for the country’s overall development, and the new plan embodies policy innovation that is necessary for the next round of reform and opening up.
“It is an updated version of the country’s reform and opening up, and some of the measures are far bolder than previous policies.”
Xie Xiangxiang, an associate professor at the School of Tourism of Hainan University, said that turning the entire island into a free-trade zone is a powerful starting point for Hainan to become a leading international tourism and consumption centre.
The biggest challenge facing the island is a lack of talent, so the province needs to improve its education and training, Prof Xie said.
This article was originally produced and published by China Daily. View the original article at chinadaily.com.cn