Hainan Leads Reform and Opening-Up with FTP

FOR Hainan Province in south China， 2024is a crucial year for promoting independentcustoms operations throughout the wholeisland. It is also the sixth year into the islandprovince’s gradual exploration into FTP constructionwith Chinese characteristics.

Accelerating Construction

Six years after its inception， the constructionof the Hainan Free Trade Port has unleashed newvitality for high-level opening-up. Feng Fei， secretaryof the Hainan Provincial Committee of the CommunistParty of China （CPC）， said building the FTPwith Chinese characteristics is a major reform andopening-up measure personally planned and promotedby President Xi Jinping. It is also the outcomeof the CPC Central Committee’s strategic decision，in-depth research， and scientific planning.

Since the 18th National Congress of the CPC in2012， Xi has visited Hainan three times， reiteratingChina’s determination to expand high-level institutionalopening-up of the Hainan FTP.

The CPC Central Committee has decided to supportHainan in building the whole island into a pilotfree trade zone， gradually exploring and steadilypromoting the establishment of a free trade portwith Chinese characteristics， Xi said at a gatheringcelebrating the 30th anniversary of the founding ofHainan Province and the Hainan Special EconomicZone on April 13， 2018.

During his inspection tour of the province in"2022， Xi called for accelerating the developmentof Hainan into an FTP with global influence. Hesaid Hainan will become a paradigm of reform andopening-up in the new era.

According to Liu Xiaoming， governor of Hainan，a primary policy system for the FTP featuring facilitationfor trade and investment and cross-borderfree flow of capital， personnel， goods and services aswell as the orderly flow of data in a secure mannerhas taken shape， shoring up Hainan’s high-qualitydevelopment.

Hainan saw its GDP grow by 9.2 percent in 2023，and its value-added industrial output climbed 18.5percent. The per capita disposable income of urbanand rural residents increased by 6.3 percent and 8.3percent， respectively. Trade in goods and servicessoared by 15.3 percent and 29.6 percent， respectively.The zero-tariff policy has resulted in a cumulativeimport value of RMB 20.2 billion， with the value oftax reduction and exemption amounting to RMB3.81 billion. The tariff-free policy for value-addedmanufactured goods for domestic sales has been extendedto key industrial parks across the island. Asa result， businesses benefiting from the policy havesold such product valued at RMB 4.71 billion. Theisland province also applies the preferential policyof reducing both corporate and individual incometax to 15 percent in a wider range of areas.

A New Testing Ground

This year marks the 10th anniversary of theopening of the Yangpu Bridge， which connects theYangpu Economic Development Zone and DanzhouCity.

The Yangpu Economic Development Zone inHainan， one of China’s first national developmentzones open to foreign business， was founded in1992. Today， it is the testing ground for the constructionof the Hainan FTP and a new window forHainan’s high-level opening-up. At the end of 2021，Hainan made overall arrangements for integrateddevelopment of Danzhou and Yangpu， aiming toexpand FTP policies wider.

China’s first digital bonded zone was establishedin Danzhou and Yangpu in February， making itpossible for data exchange via a dedicated internationalInternet line in the zone. While ensuring data"safety， the digital bonded zone also provides valueaddedservices for data generated abroad， such asthe collection， storage， processing， governance， andtransaction of such data as a production factor.

According to the master plan for the constructionof Hainan FTP， island-wide independent customsoperations will be launched by the end of 2025. Forthat， an import taxable commodity catalogue， a listof prohibited and restricted items and sectors， andcustoms supervision measures are being formulated.The main work on 31 construction projects has beenbasically completed， and 22 of the 27 pressure testtasks have been carried out.

According to Guan Jirong， executive vice directorof the Office of the Hainan FTP Working Committee，independent customs operations is of greatimportance for Hainan’s high-quality development.Once it is achieved， more imported goods will enterHainan with zero tariff， and a larger number oftalent from overseas will work in Hainan. In addition，cross-border wealth management in the islandprovince will be more convenient.

Forging New Quality Productive Forces

Hainan is located at 18 degrees north latitude，making the island an ideal tourist destination. Tourismcan be an important focus of efforts in boostinghigh-quality development of the Hainan FTP. Today，tourism is part of Hainan’s modern industrial system.Since the province extended visa-free entry tovisitors from 59 countries， tourists are flocking in.

According to Liu Xiaoming， Hainan is developingmodern industries with local characteristics. The"province envisions a distinctive modern industrialsystem made up of tourism， modern services， hightechindustry， high-efficiency tropical agriculture，seed breeding， deep-sea science and technologyindustry， and commercial aerospace industry. It isalso promoting high-end shopping， and attractingpeople to come to Hainan for its premium medicalservices and education.

The Sanya Yazhou Bay Science and TechnologyCity is a major base for cultivating new qualityproductive forces. It boasts the Yazhou Bay SeedLaboratory for seed breeding research， 21 seedindustry research institutions and more than 2，800innovative seed enterprises. The laboratory andother seed-related organizations produce improvedseeds with greater yield and better resistance toextreme weathers. Since the founding of the People’sRepublic of China in 1949， 70 percent of more thanthe 7，000 new crop varieties in the country havebeen bred in Hainan.

The Boao Lecheng International Medical TourismPilot Zone in Hainan is China’s only special medicalzone， integrating medical services， medical researchand pharmaceutical production. The pilot zonealso seeks to explore new approaches to reformingChina’s approval system for medical products aswell as the clinical use of global innovative productsin China.

According to Xie Jing， vice governor of HainanProvince and director general of the Hainan ProvincialDepartment of Science and Technology， the zoneintroduces innovative drugs and medical instrument"in sync with their availability in the rest of the world，and has become a “hope city” for patients with rare ordifficult diseases who are looking for new drugs， newinstruments and new treatments.

The bougainvillea is an iconic flower of Hainan，representing enthusiasm， perseverance， and enterprise.Most homes have a plant or two and it growsin profusion in public places. Besides the riot of colors，the flower also has high commercial and medicalpotential. To tap that， the Bougainvillea ScienceExpo Park opened in the city of Sanya in Hainan inMarch. A base for conserving the germplasm of theflower and its commercial application， the park isan important part of China’s tropical agriculturalscience center in Hainan.

The Longping Biotechnology （Hainan） Co. Ltd. isa biological breeding enterprise developing hybridcrops in Sanya. The company has pioneered researchand development. Today， it owns more than80 invention patents.

Hainan Province pledged in its 2024 reporton the work of the provincial government thatgreat efforts will be made to spearhead reformand opening-up with the construction of the FTP.Connecting the domestic market with the internationalmarket， Hainan is embracing unlimitedopportunities for development.