China to build Hainan Island into pilot FTZ

World
Europe

The Chinese government has rolled out a plan to build the country's southern island province of Hainan into a pilot free trade zone. The plan came six months after Chinese President Xi Jinping announced the move at the 30th founding anniversary of the province and its special economic zone.

The general plan was issued by the State Council, and outlines policies to boost development and grant more autonomy to Hainan. It is an important practical step in turning President Xi's announcement into a reality.

According to Vice Minister of Chinese Ministry of Commerce Wang Shouwen, the Hainan Free Trade Zone will push forward trial reforms, which includes accelerating the establishment of new institutions of the open economy, promoting the innovative development of the service sector and speeding up efforts to transform government functions.

Authorities say the move demonstrates China's determination to further open up and promote multilateralism. A series of proactive strategies seek to turn Hainan into a key gateway to the Pacific and Indian Oceans. Actions are also set to attract foreign trade and investment, with emphasis on tourism, service and high-tech sectors.

Vice Provincial Governor of Hainan Shen Danyang said the province aimed to foster a law-based, international, and convenient business environment as well as a fair, open, unified, and efficient market environment. That will be done via policy innovation and implementation. An action plan is already being developed.

The plan has made exceptions to certain restrictions to opened a way for foreign construction projects and talents.

But with 11 free trade zones already in place across China, how this tropical island will eclipse its equivalents is an important issue.

A significant breakthrough is that comprehensive reforms will be carried out throughout the whole island. Wang pointed out that Hainan will utilize its own advantages to push forward trial programs in sectors like health care, culture and tourism, as well as green development, while also referencing experience from existing FTZs. It will also work on the establishment of major risk control mechanisms.

Meanwhile, the local government says it will draw upon successful experiences from overseas as well. That could further strengthen comparisons that have put Hainan in the ranks of Hawaii and Dubai.

China has set a goal to turn Hainan Province into an open and standardized free trade zone by 2020, which is also a sign of greater and future ambitions – to establish China's first free trade port on the island.