A mega project to build China’s southernmost province of Hainan into a world-class free trade port was unveiled on Monday, giving the country’s Hawaii-like island an ambition to compete with other ports such as Hong Kong Special Administrative Region (HKSAR), Singapore and Dubai.
The 35,000 square kilometer tropical island with 9.5 million residents will embrace a package of policies covering tourism, duty-free purchasing, investment and medical services, according to a master plan that aims at boosting the region’s economy.
The plan calls for industries and products processed in Hainan to be exempt from a value added tax of over 30 percent. Island residents will be able to enjoy duty-free purchases and tourists will be allowed to purchase duty-free products valued at 100,000 yuan in Hainan per year. Businesses registered in Hainan Province and talent working in the area would be required to pay corporate and individual income taxes of no more than 15 percent.
“People will not be surprised if a new opening-up policy is issued during ‘great time,’” said Bai Ming, deputy director of the Academy of International Trade and Economic Cooperation in Ministry of Commerce, adding “But an opening-up policy will bear more meaning when facing a lot of challenges.”
Not only China but the whole world now is facing a serious economic pressure due to the COVID-19 pandemic, which has caused over 380,000 deaths around the globe. And the two-year-long U.S.-China trade tensions have made people worry about the decoupling of the global economy.
“Hong Kong, Singapore and Dubai have less resources for tourism than Hainan,” Bai noted, tourism is the island’s unique advantage compared to other free trade ports, in which the main attraction for tourists is shopping. “So the service sector is key for Hainan.”
Hainan is famous for its natural beauty. According to data, over 60 percent of Hainan’s land is covered with forest. Some 30 years ago, the figure stood at 31.7 percent, which is about the same as world’s forest rate in 2020.
“Hainan will be an international center for both tourism and consumer,” stressed Bai.