












– By 2025, the plan is to bolster the local trading
environment to China’s paramount level.
In other words, Hainan’s economic environment will be raised to
a level on par with Beijing, Shanghai, Guangzhou and other major Chinese business hubs that are reliably known to their counterparts from abroad.
– By 2035, the Free Trade Port will become
"the new benchmark of China's open economy"
Free and convenient cross-border capital, data and transportation flows will be ensured. Notably, such advanced free trade zones as Singapore, Dubai and Hong Kong will be used as working models.
– By 2050, the creation of “a predictable,
transparent business environment”
based on equity and equality of domestic and external investments, state and private financing and the participation of both local and foreign market players will be complete.
General Secretary Xi Jinping announces the Central Committee
of the Communist Party of China’s decision to approve the plan for constructing a pilot free trade zone on Hainan.
The containers are transported by sea / Hainan Airlines
Window of Global Trade. Lv Zhen / Hainan Photo Agency
The “Master Plan for the Construction of the Hainan Free Trade Port”
is released.
An environment for free
and convenient trade and investments will be created.
Free and convenient cross-border capital flow, secure and orderly data exchange and uninterrupted traffic flow transportation flow will be ensured.
a free trade port in accordance with the highest international standards will be built.
PORT OF MAXIMUM
tRADE FREEDOM
OPPORTUNITIES
4
6
1
+
+
Hong Kong
Dubai
18°
HAINAN
Singapore
Notably, the introduction of preferential customs tariff measures will take place at the very first stage of the project, that is, in the near future. Thus, by 2025, the goods produced in Hainan will be exempt from import customs duties (that is, assuming that their added value would exceed 30%). Moreover, vehicles for transportation and tourism purposes (yachts included) will also be granted duty free access to the island, and the same rule will apply to domestic imports as well. By 2025, additional tariff cuts will have been introduced.
These are the Chinese government’s planned stages for attracting foreign investors to Hainan. Many centuries ago, the island was one of the key transit points of the Great Silk Road. Nowadays, it is destined to turn into one of the key hubs of the modern “One Belt – One Road” trade route that is being actively promoted by the Chinese authorities. The pilot free trade zone as conceived by Beijing will make Hainan more attractive for foreign investors, eventually turning it into a booming world-class economic powerhouse by 2050.
Beijing focuses a great amount of attention on another set of figures, which also underpins its new business strategy. This is the so-called “6 + 1 + 4 list”. The explanation of its meaning will follow shortly below, but first of all let us stress once again that this sort of numerology as far Chinese traditions and practice go should be taken quite seriously. Now that we’ve covered this short instructive preface, let us see, what “6 + 1 + 4” actually means.
6
1
4
“Six” stands here for six main principles underlying the port’s policy of openness, namely, the provision of freedom of trade, investment, transportation, financial flows, labor mobility and secure data exchange. According to the Master Plan, business will be exempt from import duties whereas service trade personnel will be granted unlimited access to the market.
“One” means the creation of a unified, integral and modern system based on the inherent characteristics of Hainan Island. It is implied that port’s development will not work to the detriment of the tourism industry but, on the contrary,
it will attract more tourists and investors from abroad.
An improved service sector as well as the development
of high-tech industries such as aerospace, deep-sea exploration, mining technology, and so forth will enhance this process.
“Four” stands for four social and political mechanisms underlying the functioning of the Free Port of Hainan.
It is all about the rule of law, a system of efficient public administration and liberal taxation, as well as preventing and controlling all sorts of risks, including those related to health and the environment.
Hainan is building the world’s largest free trade port. Back on April 13, 2018, while speaking
at a meeting dedicated to the 30th anniversary
of the opening of a special economic zone
in Hainan, President of the People’s Republic
of China Xi Jinping announced a program
for the creation of a pilot free trade zone
on the island. The Party Central Committee supported the plan for constructing a free trade port in accordance with China’s standards
and voted for its phased implementation.
However, general statements are not enough for business, since
it needs something more explicit. Two years ago, Chinese
and foreign corporate bigwigs lauded Chairman Xi’s idea, albeit keeping in mind that such declarations seldom go beyond what’s written on paper. But as it turns out now, when Chinese officials decide to do something, rest assured, they will do it in the best possible way.
On June 1, 2020, the long-awaited and carefully charted details followed. The Central Committee of the Communist Party of China and the State Council issued the “Master Plan for the Construction of the Hainan Free Trade Port”. Chinese authorities place great importance upon this project, the latter being under Xi Jinping’s personal supervision. All the regions and departments are also extremely interested in the faithful implementation of this program. In other words, they are indeed building something in Hainan. But what exactly is being built there?
Yangpu Port. Wang Jun / Hainan Photo Agency
Even if we take away all the Chinese-style figures of speech like
“in order to ensure the compliance with the highest standards
of the global economic practices” from the Master Plan, there is
a lot more in it than just words. Though the planned construction schedule covers the time period until 2050, it is already clear what kind of preferences will be offered to businesses very soon.
And once again, as far Chinese traditions go, numbers are playing a key role. These are the part of the first set:
The urban landmark - Haikou Century Bridge. Chen Zefeng / Hainan Daily
2018
2020
2025
2035
2050
2018
2020
2025
2035
2050
Surfing in the Riyuewan Bay in Wanning.
Chen Zefeng / Hainan Photo Agency
HAINAN
AS A TOURIST PARadise
Sea view. Hainan Photo Agency
Water Scooter. Lv Zhen / Hainan Photo Agency
Dadonghai Holiday Resort. Wu Wei / Hainan Daily
Haikou Integrated Free Trade Zone. Chen Zefeng / Hainan Photo Agency
Shopping in Sanya Duty-free Shopping Mall. Wu Wei / Hainan Daily
Atlantis Hotel, Sanya. Wu Wei / Hainan Daily
motion
Haikou Meilan International Airport.
Li Tianping / Hainan Daily
Hainan hit the jackpot with its geographical location. The island lies 18 degrees north of the Earth’s equatorial plane. Hainan’s latitude
has been dubbed the “Golden One” in the tourism industry. Most experts agree that the climate
in this corner of planet Earth ideally favors
99 out of 100 vacationers. With its soothing
sea waves, pristine sand beaches, the gentle
breeze and warm, comfortable air almost all year round – what more could anyone ask for?
Infrastructure, for sure.
Because of the infrastructure issue, many potential holidaymakers have to narrow down their choices. However, this is not the case with Hainan, as the island boasts first-rate infrastructure. The Chinese authorities have worked on a program which presupposes that 2025 will see Hainan transform into a major center of global tourism with a vibrant cultural life, duty free trade and unlimited resources for both passive and active recreation. Given the island’s current status of a world class resort, it is hard to imagine what it will look like in 2025. Now, let us have a closer look at the vacation opportunities that this island paradise has to offer.
Aerial view of maple leaves on the Wuzhishan Mountain. Chen Zefeng / Hainan Photo Agency
HOW TO GET THERE
The island is accessible by plane only. Taking a ferry could be an option for really extreme enthusiasts, but it is too boring, time consuming, let alone it totally devalues the idea of visa-free entry (which will be explained below). By comparison, air service works perfectly. The island boasts of three international airports, namely, Haikou, Sanya and Boao, and you can almost reach out and touch the sea from these airports. Their capacity is more than impressive, and even so, a new terminal with an additional runway is currently being completed in Haikou that will allow the airportto receive twice as many passengers.
HOW TO ENTER HAINAN
Hainan is the only territory in China that is eligible for visa-free entry. Chinese officials are very strict about the incoming flow
of foreigners, but these restrictions are not applicable to Hainan, given that it is an international tourist Mecca. One still needs a visa (albeit a formal one) here, but it can be issued at the Haikou
and Sanya airports upon arrival.
What do you need
bring with you?
round-trip [return] airline tickets
a hotel bill and transfer invoice
an insurance policy
visa fee (about $70 per person)
your passport
two photos (cheap on-site photography services are available in case you haven’t brought them with you)
a filled-out form (on-site assistance
is available)
One can avoid even this small inconvenience when arriving
in a tourist group, since group members qualify for a full visa-free entry to Hainan. Simply put, an individual just needs to buy a tour package in a travel agency which will do all the rest. Visa-free tourism is available to the residents of 59 countries including Russia..
There are only a couple of things to keep in mind in this respect. Firstly, we’ll have to wait for COVID-19 to disappear, since it has severely restricted global travel and mobility. Secondly, these arrangements work only in Hainan. You will still have to apply for a regular tourist visa in order to take a flight to continental China and travel elsewhere around the country. This is not too big of a problem though. But once you get to Hainan, you probably won’t be in the mood for travelling elsewhere. Rather, you’d want to stay there permanently.
Hainan has visa-free access
for 30 days for citizens
of the following countries:
The ultra-large glass curtain of “Forgotten Space” Aquarium in Atlantis Hotel, Sanya attracts many tourists to visit and enjoy the underwater world. Li Xueshi / Sanya Daily
Hotel Cluster in Haitang Bay, Sanya. Wu Wei / Hainan Daily
Atlantis Hotel, Sanya
WHERE TO STAY
The plan for turning Hainan into an international tourist hub has been in place since 2010. And it is working indeed: the annual number of visitors to the island is equal to half of Russia’s population.
A well-developed infrastructure (including a huge number
of exceptional hotels and classy cafes) contributes greatly to that end. In 2019 alone, the Hainan Province's hospitality and catering revenue accounted for 63.9% of the tourism sector’s earnings.
Hainan is an island that enjoys a great landscape and a wide diversity of hotels. Most hotels are, of course, located on the coast. Staying at Haikou, Qionghai, Boao, Wanning, Shimeiwan, Lingshui, Qingshuiwan, Sanya, Haitangwan, Ledong, Changjiang will definitely mean relishing the views of the warm South China Sea straight from your apartment. True underwater world fans will appreciate the amazing resort complex: panoramic windows in some of the rooms look directly into a huge aquarium, so that anyone can gaze at marine life around the clock.
If you want peace and quiet, combined with greener landscapes, resort complexes in Wuzhishan and Qixianling are at your service. Here you can enjoy tropical forest walks and bathing in thermal springs. You will have to go back to Sanya or Haikou for more active entertainment (such as going out to bars and discos) though.
In any case, great service awaits you wherever you stay.
Do not be afraid to be misunderstood: the staff speaks English, and sometimes even Russian at all the resorts.
Cliff Sea-watching swing in the Yanoda Tropical Rainforest Scenic Area. Cao Chuanjia / Hainan Daily
Yanoda Tropical Rainforest Scenic Area. Wu Hao
Sandbeach. Hainan Photo Agency
Пляж для отдыха. Ван Цзюнь. Фото редакция провинции Хайнань.
WHAT TO DO
In the summer of 2020, when the pandemic had just receded in China, more than a million people visited Hainan’s resorts spending millions of dollars there. And that’s not to mention foreigners who could not get to the island for obvious reasons.
Hainan has been dubbed the “Seychelles of the East” or “the Hawaii of the East” for a reason. Here vacationers will find all that they can dream of: year-round sunshine, warm sands and a gentle sea. If you get bored with popular beach amusements, but don’t want to go too far from the coast, you are always free to take up something more vigorous like diving, surfing, kiting, snorkeling or fishing at sea. Surfing enthusiasts are recommended to opt for Riye Bay, whereas divers should definitely head to Wuzhizhou Island.
It is easy to rent a canoe, or a water bike, or take a parasailing flight over the sea on any beach in Hainan. If it’s too much for you, beach volleyball or football is always available.
Here, it is not all about beaches though. One can also take an exciting trip into the heart of the tropical forest, visit ancient settlements and delve into exploring the local customs and traditions.
Qizhoulie Island. Hainan Photo Agency
Aerial view of Hainan. Wang Jun / Hainan Photo Agency
Excursion tours are available everywhere in Hainan and differ greatly from those offered at other famous resorts. For instance, there is a crater of an extinct volcano not far from popular hotels. A lookout point is situated just 30 kilometers from the island’s capital of Haikou. You will have to climb to it up the stairs carved out of solid lava, but it is worth it, since two more volcanoes
(both of them active) can be seen from the top. Examples
of ancient Chinese architecture (everything from ancient temples to mausoleums built by famous imperial dynasties) await you in the city of Haikou itself. The world’s largest 108-meter-high statue of Guanyin (the Goddess of Mercy) can be found in the vicinity
of the Nanshan Temple.
Those, who are not interested in history and the past, can explore the Hainan Binglanggu Li & Miao Cultural Heritage Park and the Monkey island, founded in 1960-s. There is also a cableway for keen sightseers in the National Reserve. Boat trips and seafood restaurants are also available. Fresh and delicious octopus and squid are on the long list of the island’s advantages as well.
What’s more, the highest mountain in Hainan - Wuzhi (or “Five Finger Mountain”) – is one of the most memorable sightseeing destinations around. The path to the peak stretches across tea and rice plantations, mountain waterfalls and green areas. If you are not ready for a lengthy hike, however, then you’ll be better off enjoying the landscapes in the Yanoda Tropical Rainforest Park where you can find a sweeping range of tropical plant biodiversity. Oxygen saturation is guaranteed.
Kite surfing in Boao scenic area. Hainan Photo Agency
Diving. Lv Zhen / Hainan Photo Agency
Seaside crimson clouds. Lv Zhen / Hainan Photo Agency
Hainan gibbons, which are national first-class protected animals of China
Terraced land on the Wuzhishan Mountain. Hainan Daily
Travelling around the island is pleasant and comfortable. In 2015, the Hainan ring high-speed railway that runs along the island’s coasts kicked into operation. Those who prefer travelling around Hainan by car are free to choose between three scenic drives covering the eastern, western and middle parts of the island respectively. An important nuance here is that all the highways are toll-free here, which is a rarity
in mainland China and most countries of the world.
WHAT ABOUT CULTURE
Not only do the Chinese authorities seek to guarantee Hainan’s status as one of the top tourist hubs, but they also intend to turn
it into an international cultural exchange center. Therefore,
the island regularly hosts large-scale exhibitions, concerts
and other events. For instance, the Hainan International Film Festival stands on par with China’s three other film festivals held
in Beijing, Shanghai and Changchun respectively. This is quite understandable: unlike the capitals, the island offers the opportunity to enjoy film festivals while lounging around, enjoying the gentle breeze and sipping coconut milk in the company of movie stars like
Jackie Chan.
Jachie Chan on the Red Carpet of the Closing Ceremony of the First Hainan International Film Festival. Hainan International Film Festival Organizing Committee
The Closing Ceremony of the Third Hainan International Film Festival Wu Wei / Hainan Daily
Film representation at the seashore / Hainan International Film Festival official website
Film representation at the seashore / Hainan International Film Festival official website
ISY Music Festival
Fashion show at the international culture week focusing on brocade and embroidery works. Song Guoqiang / Hainan Daily
WHAT TO EAT
In short, everything. A trip to Hainan is a great opportunity to get acquainted with genuine Chinese cuisine, not the imitation that one stumbles on in every single European capital. Of course, first and foremost it is the freshest seafood from the region’s ecologically pristine waters, but also there is much more. Thanks to the local climate, a wild variety of fruits ranging from guava and lychee to mango and jackfruit is available here all the year round. An endless menu of incredible traditional Chinese cuisine is yet another option. Hainan chicken with coconut sauce, as well as duck, meat, vegetables… Here’s a tip: if you are not a spicy food lover, let the waiters know that you’re not one, and the chef will not put pepper into your meals. Just say: “Bula”.
Seafood. Lv Zhen / Hainan Photo Agency
Fried Rice with Pineapple Cubes. Hainan Photo Agency
Ching Bo Leung (a cold dessert, widespread in the south of China). Hainan Photo Agency
Worm-shaped Rice Strips Mixed with Shredded Ginger, Shredded Coconut, Brown Sugar and Powdered Herba Paederiae Leaves. Lv Zhen / Hainan Photo Agency
Danzhou Cake Steamed with Rice Milk (Hainan special snack). Lv Zhen / Hainan Photo Agency
Breakfast at the Hualuxe Haikou Seaview hotel
Tropical fruits. Hainan Photo Agency
HOW TO SPEND YOUR MONEY
No doubt, spend it on tourist attractions at the coast, delicious food and admission tickets to beautiful nature parks. But this is, again, by far not the complete list of options. Thanks to efforts by the Chinese authorities, Hainan has become the country’s main duty-free zone. The tax will be deducted from the price of all the goods you wanted to buy in China. There are four duty-free shops on the island, two of them right at the Haikou and Sanya airports, the latter being comparable in size with the largest duty-free shops in the world. Who could possibly leave here empty-handed? In June 2020, Chinese authorities raised the duty-free shopping quota from 30,000 yuan to 100,000 yuan (about $15,000). There are 45 groups of duty-free goods available here, including alcohol and cigarettes.
The system works just like everywhere else in the world. What should you buy? Anything that catches your eye from table figurines of pot-bellied sages to precious tea and brand-new smartphones. There is only one thing to be careful about: the volume of duty-free alcohol is limited to one and a half liters.
Sanya International Duty-free Shopping Mall. Lv Zhen / Hainan Photo Agency
Inside the International duty-free center in Sanya / Hainan Daily
Duty-free stores at Riyue Plaza, Haikou. Liu Yang / Nan Guo Daily
HAINAN
AS A 100% GREEN ZONE
ENVIRONMENTAL
Clouded leopard (Neofelis nebulosa)
Hainan Blue Flycatcher (Cyornis hainanus)
Mangrove in Haikou. Chen Zefeng / Hainan Photo Agency
Tonggu Mountain, Wenchang County. Lv Zhen / Hainan Photo Agency
By 2025 – fulfilling the modernization and capacity development for environmental management in Hainan
By 2035 - transforming Hainan into China’s calling card, making it a model province with environmental quality and resource efficiency reaching world-class levels
Hainan is Mother Nature’s generous gift to China and its guests. It is not for nothing that the island
is called “the Hawaii of the East”. The climate
is ideal for comfortable recreation all year round here. The seawater temperature does not drop below +23°C even in the winter, and this is despite the fact that the Chinese themselves consider winter to be a “low season” for resort tourism.
This means that if you want to go to the seaside
in the winter, Hainan is a win-win option.
However, sea waves are not the only thing this Pearl of the Southeast Asia has to brag about. Though the island is not too large, it is worth staying here for at least two or three weeks. Otherwise, you might regret that you didn’t have enough time to enjoy the fantastic beauty of
the local parks, botanical gardens, lakes, waterfalls and other natural wonders.
The shrub radix dichroa growing on the Baihua Mountain, its root contains “Dichroin” which can
be made into antimalarial drug. Su Xiaojie / Hainan Daily.
HAINAN is...
China’s outpost for ecological safety and security
China’s only tropical
island province
603
5860
35400
square
kilometers
animal species
plant species
a land area
2321
2
million
square kilometers
a sea area
marine fish species
TROPICAL FORESTS
Hainan is famous for its tropical forests. No other Chinese
province can compete with it in terms of forest concentration
and conservation. The protection of national parks and rainforests is one of the 12 pilot projects that has been formulated by the local authorities to pursue sweeping reforms and to draw the world’s attention to Hainan. The pilot rainforest zone is located in the mountainous region in the very heartland of the island. It covers
an area of more than 4,400 square kilometers (about one-seventh of the island’s total land area). What’s more, 3,577 plant species grow there, including 432 protected ones. It provides a natural habitat for 627 species of animals, including such exotic ones
as the Hainan gibbon, the clouded leopard, the monitor lizard
and a rare species of python. Though occupying less than 0.046% of the country’s surface area, the Hainan Rainforest National Park
is inhabited by 20% of amphibians, 33% of reptiles, 38.6% of birds and 20% of animal species that can theoretically be found
across the vast territory of China.
Gibbons. Su Xiaojie. Hainan Daily.
Datian Eld’s Deer Nature Reserve, Dongfang City. Lv Zhen / Hainan Photo Agency
RICH IN MEDICAL RESOURCES
Notably, many of the plant and animal species found here are actively used in traditional Chinese medicine. Extractions, stems and leaves of about 4,000 plants are used as ingredients in more than 2,000 drugs and medications. Research shows that 137 native plant species are effective in combating cancer. Animals, and especially sea creatures (sea dragons, sea horses, oysters, turtles, sea cucumbers and the like) have proven to be of great medical value too. Chinese medicine uses about 50 such species.
PURE AIR
Thanks to the rainforests, Hainan can boast of its outstanding air quality. The atmosphere here is saturated with negative oxygen ions, and is famous for its healing aromas and low bacteria content. Taken together, these factors create an almost ideal environment for relaxation and rehabilitation. Coastal mangrove forests that are known far and wide beyond Hainan merit particular mention. They form a natural coastal protective belt, shielding beaches against waves and winds and filtering the sea water. Mangroves are also invaluable in terms of research and education. Not only are these forests of great ecological value, but of cultural significance as well. The 28-km long mangrove coastline ranks among the eight most beautiful coastlines in Hainan.
Traditional Chinese herbal medications
Yinggeling Nature Reserve, Baisha County. Lv Zhen / Hainan Photo Agency
It goes without saying that all these natural resources must be managed with care. The Chinese authorities are implementing a program aimed
at both turning Hainan into one of the country’s major economic outposts and fully preserving its unique environment. The development of a high-tech free trade port is being carried out by considering the needs of the environment and the efficiency of the use of resources. In particular, China is adhering to the commitments taken under the Copenhagen Accord by cutting carbon dioxide emissions.
As a result, Hainan ranks second in the world in terms of air quality. This is particularly important, given that the country has been prioritizing environmentalism for several years already. Maintaining the highest air quality level (still unattainable for mainland China) is a crucial task included into the list of strategic state programs for the development of the island. Hainan has been partitioned into conditional zones for that end. The western part of the island develops ecologically conscious manufacturing, while the eastern part focuses on tourism.
OBJECTIVES SET FORTH
BY THE HAINAN governmeNT:
18
98%
mcg/cubic meter
<
annual average fine particulate matter concentration
coastal water
quality index
95%
5%
<
sustainable waste management rate
soil erosion
98%
62%
>
annual percentage
of days with excellent air quality
of the island’s surface covered
with forests
As a result, 2020 saw Haikou, the capital of Hainan, being well ahead of other Chinese cities in terms of ait purity. Having analyzed the data collected from 168 cities, experts from the Ministry of Ecology and Environment concluded that the level of harmful substances in Haikou’s atmosphere was not rising at all, and even experienced a persistent decline. The key air pollution indicator, that is, the PM2.5 emission rate, remains at a very low level. Concentrations of sulfur dioxide and nitrogen oxides are constantly decreasing as well. At the same time, clean energy generating capacity in the province has exceeded 1.89 billion kWh, which represents almost 30% of the region’s total electricity supply.
MARINE ECOLOGY
Chinese officials have been paying great attention to sustaining the island’s marine environment. In September 2020, the authorities earmarked almost $50 million for this purpose. These funds will be spent on the maintenance and protection of the coastal strip and mangrove forests. Along with this, a system of personal environmental responsibility has been introduced on the island. This measure aims both at preventing environmental pollution, and replenishing and monitoring renewable marine resources. Officials at the township, municipal and district levels are personally responsible for monitoring the environmental situation and making sure that it won’t worsen.
Jianfengling Mountain. Chen Zefeng / Hainan Photo Agency
GREEN ISLAND
In that way, vast green areas are being created and sustained. Let us remember that, say, in the provincial capital of Haikou (that is a big city indeed) forest parks cover an area of 51 square kilometers (that is, 38% of its total territory). This is the result of continuous efforts to turn the island into a real environmental oasis. Since the late 1980s, when Hainan was granted its provincial status, the forest area experienced an over 50-percent expansion to 21,300 square kilometers. That means 62% of the island’s surface is covered with greenery. This accomplishment can be attributed not only to the Hainan authorities but also to its residents, as 70 million people have taken part in greening initiatives over the past 30 years, planting 300 million trees in the province.
Haikou won the prestigious Environmental Excellence Award. But even more importantly, the preservation and replenishment of rare animals and birds became possible thanks to these initiatives. And even so, they believe in Hainan that this was just the first step on the way to furthering the island’s environmental rehabilitation.
Wanquan River. Wang Jun / Hainan Photo Agency
DEVELOPMENT STAGES
2025
2035
2035
2025
In the summer of 2020, the provincial government created a conservation area to protect shallow-water ecosystems. Fishing was fully or partially prohibited along a coastal area covering about 1.5 million hectares, so that the ecological balance could be maintained. Tourists won’t see the difference, because the freshest seafood will continue to be delivered to restaurants from offshore fishing spots.
E-VEHICLES ONLY
Though not too convenient for restaurant owners, this move will make the green island more attractive in the eyes of its guests, the authorities believe. It’s the same with the extensive use of all-electric vehicles. It is extremely problematic to get license plates for a petrol-engine car in China nowadays, since such cars aren’t environmentally friendly and thus do not fit into the state-run air purification program. At the same time, electrically-powered cars are a whole different ballgame, and not a lot of time and effort is needed to register a license plate number for one. As a result, many hotels in Hainan inform their guests about transfers from the airport by electric vehicles only (the latter being conveniently mass-produced in China, by the way).
SEPARATE WASTE COLLECTION
Finally, there’s one issue of utmost relevance to all in China, that is, the problem of separate waste collection. The country is now campaigning for smart waste sorting. Waste is supposed to be divided into four categories: recyclable waste, harmful waste, food waste, and other waste. Since October 2020, failure to comply with these sorting rules may lead to fines. The infrastructure needed for waste processing is already in place in 91% of residential buildings. This will make it possible to sort 900 tonnes of secondary waste and recycle more than 300 tonnes of food waste per day. The so-called smart containers have already been installed in some residential quarters in Sanya. These AI-powered devices are capable of sorting waste without human intervention.
Chinese officials are constantly introducing innovative mechanisms to maintain a reasonable balance between economic development and environmental protection in Hainan. The issue of a specialized form of property rights and natural resource usage fees are currently being considered. New models of environmentally-friendly manufacturing, recycling programs, ecotourism and innovative means of producing ecologically clean agricultural goods are being implemented. Green loans are also in full swing: the support program for eco-friendly enterprises has received backing from the country’s central authorities. Saving energy, reducing fine particulate matter concentration, cutting carbon dioxide emissions – all these are the issues are of great importance in China. As for Hainan, it is definitely leading the battle against environmental pollution.
A volcanic vent in Haikou. Wang Jun
При этом уже на первом этапе, то есть в самое ближайшее время, будет осуществлен переход на льготные условия применения таможенных тарифов. Так, для продукции, которая перерабатывается на острове, к 2025 году импортные пошлины будут вообще отменены (при условии, что добавленная стоимость в итоге составит 30% и более). Кроме того, будут отменены ввозные пошлины для транспортных средств (включая даже яхты), импортируемых на остров для использования
в транспортных или туристических целях, а также на импорт, рассчитанный на потребление в пределах самого Хайнаня.
А к 2025 году обещают введение дополнительных тарифных льгот.
Все это – этапы плана правительства Китая по привлечению
на Хайнань зарубежных инвесторов. Много веков назад остров был одной из основных точек на маршруте Великого шелкового пути. В XXI веке он призван встать в ряд ключевых пунктов современного торгового маршрута «Один пояс – один путь», активно продвигаемого китайскими властями. Пилотная зона свободной торговли, по задумке Пекина, повысит привлекательность Хайнаня для иностранных инвесторов
и к 2050 году превратит остров в ведущий центр мировой экономики.
HAINAN AS A COMMERCIAL
AND INVESTMENT CENTER
Window of Global Trade. Lv Zhen / Hainan Photo Agency
PROSPERITY
In 2020, Hainan attracted 64.5 million
tourists bringing in earnings of 105 billion yuan.
This is the country’s best record during
the COVID-19 epidemic.
The Government of China envisages the further (and quite vigorous) development of the tourism, service and hi-tech sectors, as well as the continuous promotion and strengthening
of the basis for a real economy and the enhancement of industrial competitiveness.
In 2020, the overall income generated
by the services industry reached 334.1 billion yuan, thus increasing by 5.7% since 2019. Thus,
the sector’s contribution to the provincial
GDP growth was 95.8%. This industry employs
about 746,000 people.
Today’s Hainan is proving to be a center
of cutting-edge advanced manufacturing.
The island hosts 566 innovative technology enterprises, and in 2019 those enterprises generated an overall revenue of 26.21 billion yuan ($4 bln).
The actual foreign direct investment inflow
has reached $ 2 billion, that is, 2 times more
than in 2019. These dynamics have been maintained over the past three years, and that’s a record too.
Wharf. Zhou Xingqijia
Boao Sino-French Rehabilitation Medical Center in the Boao Lecheng International Medical Tourism Pilot Zone of the Hainan Free-trade Port. Yuan Chen / Hainan Daily
China (Hainan) International Tropical Agricultural Products Winter Trade Fair 2020
Hainan International E-Commerce Park. Chen Zefeng / Hainan Photo Agency
Foreign talents working in Haikou Fuxing City. Yuan Chen / Hainan Daily
While recognizing all of Hainan’s tourist and recreational attractiveness, the Chinese central authorities are doing their best to eliminate stereotypes. Hainan is not merely about the sun and the warm sea, foreign partners see it as an extremely interesting trade and investment cluster as well.
In 1988, Hainan was assigned special economic
zone status. Back then, Beijing had started implementing a total structural reform plan that eventually elevated it to the position of the world’s second economy.
The decision to further develop the free-trade zone in the province taken in 2019, gave a new impetus to this process. There has never been such a precedent throughout China’s entire history.
Nowadays, Hainan is a sort of a testing ground for new economic strategies and tactics. Firstly, this means that it is here where the most advanced technology and practices are being applied (and this fact deserves special attention, given the remarkable economic progress demonstrated by China in general). Secondly, Hainan offers a far more liberal business environment than that typical of mainland China, where foreign businessmen must cope with loads of impediments and all sorts of restrictions. In particular, the province offers unique policies for attracting foreign investment and encourages cooperation with foreign companies of all sizes. There are no such programs in the rest of China.
Haikou views
Now, a number of key clusters, which apply the new practices, already operate on the territory of the island:
Yangpu Economic Development Zone, which contains a port, oil refinery, petroleum commercial reserve base, power station, and the town of Yangpu.
Lingshui Li'an International Education Innovation Experimental Zone, that serves as a cooperation area between Chinese and foreign state universities, as well as a demonstration zone for innovations in eduction and staff training.
International aerospace city Wenchang with its leading aerospace higher education centers and R&D institutes. The International University of Aeronautics and Astronautics is also planned to launch in Wenchang.
Boao International Medical Tourism Pilot Zone. The zone is known for its wide range of clinics and hospitals specializing in traditional Chinese or Western medicine. The cluster solicits high-qualified specialists from China and other countries, as well as cooperates with foreign medical institutions. A foremost clinical center and an R&D base are also planned to launch here.
The “Master Plan for the Construction of the Hainan Free Trade Port” seeks to bring Hainan up to the level of Hong Kong and Singapore. The time frame for setting up commercial enterprises will be reduced to three working days. Zero customs tariffs, low tax rates, simple and transparent taxation, low prime costs, and low business management costs – all these - would turn Hainan into both tourist and economic paradise, the Chinese believe. The Government of China envisages the further (and quite vigorous) development of the tourism, service and hi-tech sectors, as well as the continuous promotion and strengthening of the basis for a real economy and the enhancement of industrial competitiveness.
The so-called policy of “six freedoms and conveniences” is being applied in order to implement this plan. So, what is it all about?
View of Haikou. Chen Zefeng / Hainan Photo Agency
IN TRADE AND COMMERCE
A special customs supervision area with a network of customs checkpoints is being arranged across the island. Since 2020, zero-tariff policies have gradually been introduced. There are three items in the list so far, namely, the import of vehicles and yachts for business use; the import of raw materials and auxiliary materials used by domestic manufacturers; and the import of goods consumed by the inhabitants of the island. The transition to the total tariff “zeroing” is scheduled for 2025, when businesses will have become fully exempt from paying customs duties, import state value-added tax and consumption tax.
IN INVESTING
There will be fewer barriers to market entry for foreign investment in the Hainan free trade port. Combined with strengthened property rights and better fairness in market competition, this is set to create an open, transparent and predictable investment environment. All the red tape will be simplified, while the system of permits and approvals is going to be abolished altogether. Enterprises registered in the Hainan free trade port and engaged in business of “substantial nature” shall enjoy a lower corporate income tax of 15% (as compared to the usual 25% in mainland China). With a customs checkpoint network in operation, this tax policy will apply to all other industries with only a few exceptions. As for foreign-invested enterprises in the areas of tourism, the modern service sector and the hi-tech industry, these spheres will be granted full tax-exempt status by 2025.
Binhai Avenue, Haikou. Lv Zhen / Hainan Photo Agency
IN PERSONNEL POLICY
Foreign research and development, agricultural and medical institutions, colleges and universities are allowed to organize their own teaching and open international schools in Hainan. The policy of visa-free entry is being applied to foreigners who are entitled to act as legitimate representatives of the organizations, state institutions and enterprises they belong to.
IN SHIPPING AND TRANSPORTATION
The construction of new international transportation hubs (including airports) is in progress.
IN CROSS-BORDER CAPITAL FLOW
AND SECURE DATA CHANGE
A pilot cross-border data exchange security program is underway. Additional telecommunication services are being offered. New online transaction processing services are under development.
As for cross-border funds, the Chinese authorities have chosen
a scheme that would facilitate financial flows towards the real economy. As of today, it is an objectively complicated matter, though. Therefore, the implementation of this paragraph of the plan is scheduled for the period of 2025-2035 (that is, once the free trade port becomes “fully mature”).
Key industries that could assist in lifting Hainan to the highest international standards in trade have already been identified.
Tourism is, of course, the first of those. Hainan is the only province in China with such unique nature and such a wonderful climate. Numerous holidaymakers from China and other countries visit the island yearly. In 2020, Hainan attracted 64.5 million tourists bringing in earnings of 105 billion yuan. This is the country’s best record during the COVID-19 epidemic.
The tourism industry has been expanding rapidly. Forecasts for Hainan’s future hold that the city will turn into an Asian-wide and global tourist center. To this end, the Hainan authorities will simplify market entry for foreign investors, in order to pave the way for more temporary exhibitions, festivals and direct investment into cultural and artistic institutions and events.
Moreover, a great number of new tourism-related investment opportunities will become available:
Shopping: The island will have a transparent and convenient duty-free shopping policy.
Health tourism: The development of relaxation centers, including those for the elderly.
Medical tourism: The establishment of the Boao Lecheng International Medical Tourism Pilot Zone in Hainan.
New opportunities in tourism: Developing Internet culture, digital content and other emerging means of cultural consumption.
Construction of a home port for cruise ships and a pilot cruise tourism zone.
Promoting yacht tourism: The plan envisages the construction
of a complex yacht-servicing terminal, as well as the introduction
of yacht rentals in Hainan.
Яхты в Санья. У Вэй / Хайнань Жибао.
The service industries also rank high on the government’s priority list. The Hainan Free Trade Port is going to play a leading role in their development, while stimulating employment in this sphere. In 2020, the overall income generated by the services industry reached 334.1 billion yuan, thus increasing by 5.7% since 2019. Thus, the sector’s contribution to the provincial GDP growth was 95.8%. This industry employs about 746,000 people.
The country’s government envisions that Haikou, Sanya and Yangpu will become key areas for the formation of an economic services center. In order to implement this strategy, Hainan is planning to:
ease the restrictions on foreign capital inflow, thus encouraging multinational companies to open their offices in Hainan;
build an international transportation hub to promote integrated port, industrial and city development;
enhance the level of service in the fields of science, technology, agriculture and medicine; and an international conference center
is slated to be built as part of this initiative;
set up a competitive maritime services system.
Investors should pay particular attention to the innovation
and technology sector. Today’s Hainan is proving to be a center
of cutting-edge advanced manufacturing. The island hosts 566 innovative technology enterprises, and in 2019 those enterprises generated an overall revenue of 26.21 billion yuan ($4 bln).
The government has plans for:
developing the information industry with an accent on the Internet of Things, artificial intelligence (AI), blockchain and e-commerce;
bolstering infrastructure for deep-sea and deep-space industries (in this respect, Hainan can already boast of the Wenchang Spacecraft Launch Site and a state-of-art deep-sea research laboratory
in Sanya);
enhancing production in the fields of ecology, environmental protection, biomedicine, renewable energy and smart vehicles;
establishing a state research center for tropical agriculture
and a year-round cultivation research and development base;
proceeding with the “Smart Hainan” innovative development program.
Tianwen 1 was launched in Wenchang County, Hainan in 2020. 2020. Chen Zefeng / Hainan Photo Agency
Hainan International Energy Exchange. Wang Jun / Hainan Photo Agency
Haikou Hi-tech Industrial Development Zone. Chen Zefeng / Hainan Photo Agency
Special Issue Picture of Free-trade Port - Tencent Software Park. Chen Zefeng / Hainan Photo Agency
Ecological Software Park, Chengmai County. Lv Zhen / Hainan Photo Agency
Cruise ships is yet another sunrise industry. Currently, there are two major cruise ports in Hainan - one in Sanya and the other in Haikou - not to mention the 638 yachts and 60 yacht clubs that are registered here. A massive expansion of the yachting industry is on the horizon: there are big plans for constructing cruise infrastructure; cooperating with the world’s leading cruise lines; developing new cruise routes; establishing free marine traffic links between Hainan, Hong Kong and Macau; developing tailored products for yachting tourism; expanding yacht rental offers and creating an international yacht trading center.
The 8th Round Hainan Regatta. Chen Zefeng / Hainan Photo Agency
Yachts of Sanya. Wu Wei / Hainan Daily
The 8th Round Hainan Regatta. Chen Zefeng / Hainan Photo Agency
In addition, there are other attractive investment prospects in such areas as educational programs, aviation, pharmacy and medical services. Telecommunication and Internet services, finance and cross-border trade are highlighted separately in the “Master Plan for the Construction of the Hainan Free Trade Port”, which also envisages rent-free premises, access to state venture capital funding and other benefits for tech startups.
This strategy has already begun to yield tangible results. In 2020, 1005 new enterprises were registered in Hainan (that is, 50% of the companies that entered the region in the last 10 years), whereas foreign investment grew by 197.3%. This is a historic high and a new milestone in the island’s history. The actual foreign direct investment inflow has reached $ 2 billion, that is, 2 times more than in 2019. These dynamics have been maintained over the past three years, and that’s a record too.
59 major projects, (12 of these funded by external partners) have been registered in the free trade port. Not all of the said projects are related to tourism and commerce, some belong to hi-tech field. With the total amount of investment having already reached $2 billion, it is hard to imagine what will it all look like in 2025, when the free trade port is set to reach its “designed capacity” in accordance with the forecast by the PRC Government. Given all that, the Chinese authorities can now rightfully declare success in simplifying the procedure for registering new enterprises and approving investment projects (including those with foreign participation).
Speaking of foreign capital, all the formalities of registering enterprises with foreign capital are already being completed in the “single window” mode. Notably, this is just one of the “products” offered by the foreign investment promotion and international corporate services program. In this connection, a special government agency, namely, the Hainan Provincial Bureau of International Economic Development, was established in 2019. This is a non-profit legal entity supervised by the Provincial Chamber of Commerce and purposed for attracting foreign business to the island, providing consulting services in the fields of exhibitions and investment, and organizing reciprocal movement from the Chinese side (for instance, assisting local organizations in opening regional and overseas offices in accordance with the needs of the international market).
Nightscape of Haikou. Zhan Daopeng
This strategy is being implemented under the banner of China’s ever-increasing openness towards the outside world. According to Liu Cigui, Secretary of Hainan Provincial Committee of the Communist Party of China, "pursuing a policy of reform and openness is a key priority for the development of the southern province". And then the plan outlining the very substance of the reforms is being bred.
IN THE AREA OF INVESTMENT, THE DOCUMENT PROVIDES FOR THE FOLLOWING:
– investor protection (notably, no difference is made here between foreign and Chinese ones);
– ensuring fair competition: it makes no difference to the authorities, whether a Chinese or a foreign agent is operating on the market, because everyone is subject to the same set of rules and requirements;
– combating financial crimes;
– the establishment of an open, transparent and predictable investment environment
Liberalization and minimizing restrictions are the main goal in ensuring freedom of trade. The document specifies the short list of goods and commodities subject to import and export restrictions, however, the import and export of everything outside this list is not limited.
Generally speaking, here in Hainan, the Chinese authorities are carrying out a large-scale project (that is, a truly massive one even by Chinese standards) to create an advanced trade and investment zone in Asia. On the one hand, foreign business in China often has to cope with certain difficulties and restrictions. On the other hand, the authorities in Beijing are well aware that there can be no further development of national economies in a world devoid of mutually beneficial preferences. It is Hainan that has been assigned the role of a magic island where the interests of Chinese and international businesses are most intimately intertwined. Besides, one should probably keep in mind the boundless sea and all those golden beaches. Working in Hainan is not only profitable, but also very pleasant, after all.
Hainan International Convention & Exhibition Center (a location for the First China International Consumer Products Expo)
При этом уже на первом этапе, то есть в самое ближайшее время, будет осуществлен переход на льготные условия применения таможенных тарифов. Так, для продукции, которая перерабатывается на острове, к 2025 году импортные пошлины будут вообще отменены (при условии, что добавленная стоимость в итоге составит 30% и более). Кроме того, будут отменены ввозные пошлины для транспортных средств (включая даже яхты), импортируемых на остров для использования
в транспортных или туристических целях, а также на импорт, рассчитанный на потребление в пределах самого Хайнаня.
А к 2025 году обещают введение дополнительных тарифных льгот.
Все это – этапы плана правительства Китая по привлечению
на Хайнань зарубежных инвесторов. Много веков назад остров был одной из основных точек на маршруте Великого шелкового пути. В XXI веке он призван встать в ряд ключевых пунктов современного торгового маршрута «Один пояс – один путь», активно продвигаемого китайскими властями. Пилотная зона свободной торговли, по задумке Пекина, повысит привлекательность Хайнаня для иностранных инвесторов
и к 2050 году превратит остров в ведущий центр мировой экономики.