Since China announced support for building the whole of Hainan island into a pilot free trade zone a year ago, the province has been continuing its efforts to accomplish the goal.

Due to its positioning on the high ground of China's opening-up, the Hainan Free Trade Pilot Area has shown its characteristics ever since it was set up. Unlike the other 11 free trade pilot zones, each of which covers only 120 square kilometers, Hainan Free Trade Zone (FTZ) spans the whole island of 354,000 square kilometers. Moreover, Hainan stands on the shoulder of the 11 free trade pilot zones. A big part of its development originates from the replicable and applicable experiences of its predecessors.

Hainan has made great efforts to create a one-stop service for companies to facilitate international trade and is giving the green light only to environmentally friendly projects such as in healthcare, culture, tourism, eco-green and high-tech industries. Projects which will put pressure on the environment will not be considered as Hainan aims to build up an eco-island with modern technology and high-end industries.

The island is located at the southernmost end of China and will be an important window to the Pacific and Indian Oceans.

In the past year, Hainan has made a good start in creating a more friendly and efficient business environment via plenty of institutional reforms and opening-up to the outside world. Progress has been made in establishing a well-linked administrative mechanism, attracting domestic and foreign investment, introducing headquarter economy projects and talent resources.

Hainan's service economy has also achieved a lot of positive results. The service industry led to economic growth in the whole province in 2018. The scale of service industry market is expanding. In 2018, the total revenue of Hainan's service industry reached 1.23 trillion yuan (around 180 billion U.S. dollars), an increase of 229.5 billion yuan (around 34.23 billion U.S.dollars), or 23 percent over 2016.

However, there are some challenges in the construction of Hainan free trade zone and free trade port. First, the foundation of both the manufacturing and service industries in the area is weak. Hainan's development was initiated very late at a low starting point with poor market maturity, a weak infrastructure system and a low degree of international exchange. It won't be easy to build up a free trade zone and port with an open, ecological and service-oriented industrial system in line with advanced international standards during such a tight time.

Besides, Hainan's construction of a free trade zone and port is facing severe competition from both domestic and overseas areas. The other 11 FTZs and Guangdong-Hongkong-Macao Greater Bay Area are not willing to be left behind in the competition with Hainan.

There will be a lot of massive projects taking place in Hainan which will need a lot of funds and capital. Lack of experts, talent and human resources will restrain the progress of Hainan free trade zone and port construction.

Despite these challenges, Hainan faces significant historic opportunities and should embrace new responsibilities.