Independent customs operations of Hainan Free Trade Port: Advancing toward higher-level opening up

Editor's note: The article, written by Zhang Deyong, a research fellow at the National Academy of Economic Strategy, Chinese Academy of Social Sciences, reflects the author's opinions and not necessarily the views of CGTN. 

According to the official plan, this year marks the launch of the independent customs operations of the Hainan Free Trade Port (FTP). This signifies a new step in China's pursuit of higher-level opening up in the new era, sending a clear signal to the world of its commitment to sharing new development opportunities. It also serves as a key platform for Hainan to leverage its local strengths to build itself into a new frontier for opening up.

Opening up is a defining feature of Chinese modernization. over the past years, China's economic development has been achieved under the conditions of opening up to the outside world. Today, ensuring the steady and long-term progress of the Chinese economy requires an even greater degree of openness. At present, China's opening up is shifting from a focus on the flow of goods and factors to a dual emphasis on institutional opening up centered on rules, regulations, management, and standards as well as the flow of goods and factors. 

Meanwhile, steadily expanding institutional opening up has become a core focus in building a new system for a higher-standard open economy. The evolution of the Hainan FTP, from initial groundwork and preparation to this year's launch of independent customs operations and the upcoming full-scale development, epitomizes China's expanding breadth and depth of opening up. By building the Hainan FTP into a major gateway in the new era of China's opening up, Hainan will align proactively with high-standard international economic and trade rules, further improve a market-oriented, law-based, and internationalized business environment, and explore new models for a high-standard open economy. At the same time, the province will comprehensively deepen the reform through higher-level opening up. In doing so, it plays a constructive role as a testing ground.

The world today is undergoing profound changes unseen in a century, with a marked rise in unilateralism and protectionism and growing headwinds against economic globalization. Tariff wars and trade conflicts have hindered the multilateral trade and investment system, dampening the momentum of global economic growth. As the world's second-largest economy, China contributes around 30 percent to global economic growth annually on average and serves as the strongest engine of global development. It is not only a beneficiary of globalization but also a key contributor. 

By advancing toward a higher-level opening up, China will not only share with the world more opportunities brought about by the country's vast market but also inject distinctive Chinese momentum into global economic stability. Institutional, independent, and unilateral opening up are key features of the Hainan FTP. They represent the highest forms of China's opening up and provide a new window for observing its effectiveness. The launch of the independent customs operations is a crucial phase in the construction of the Hainan FTP. It presents tremendous development opportunities for Hainan and underscores China's efforts in supporting and advancing economic globalization through higher-level opening up. It also reflects China's resolve and concrete actions in welcoming countries aboard its fast track to development. The move conveys a strong message to global investors about the consistency, stability, and predictability of China's fundamental national policy of opening up.

Hainan is the largest special economic zone in China. Giving full play to its local advantages and aligning closely with its strategic positioning assigned by the state, Hainan is intensifying integrated institutional innovation with a focus on liberalization and facilitation of trade and investment, backed by the free, orderly, secure, and convenient cross-border flow of various production factors and a modern industrial system and underpinned by special institutional tax arrangements, an efficient social governance system, and a sound legal framework. 

The construction of the Hainan FTP will help establish the island as a "bridgehead" for international enterprises entering the Chinese market and as a crucial hub connecting the global and Chinese markets. It will also help foster replicable and scalable "Hainan experiences". The launch of independent customs operations marks a major milestone and a pivotal juncture in building the Hainan FTP and shaping it into a vital portal for opening up. With this step, the construction of the PHainan FTP will enter the fast lane, enabling Hainan to serve as a pioneering demonstration zone for China's advancement toward higher-level opening up.