Up next: Transformation, via largest free trade port
There was a time when even a mere mention of Hainan, the island off China’s southern coast, would evoke mental images of Hainan Airlines, giant tropical-themed hotel compounds, coconut milk and migrants from China’s northeast region. Not any more.
The change has been sudden. In my mind, I can already visualize the island’s planned free trade zone, which will be the world’s largest, becoming a staggering symbol of China’s new economic direction.
The country is welcoming businesses from all around the world to invest in Hainan and actively participate in development-related ventures, and in industries or sectors like information technology, agriculture, scientific research, innovation, tourism, marine economy, ecology, education and upgrade of human resources.
The island will be strengthened so it could compete with neighboring Taiwan province, the Hong Kong Special Administrative Region and even Singapore in Southeast Asia.
The proposed free trade port will help China contribute toward deepening regional economic integration and injecting vitality into the world economy.
A free trade port refers to an entire port area in a country’s territory that is considered to be outside the country’s customs boundaries. Businesses therefore enjoy the freedom to store, exhibit, disassemble, refit and process their goods in these areas.
For example, about 60 percent of the goods made in the European Union countries are transported to other regions through the Rotterdam free trade port. Logistics has become a pillar industry in the economic development of the Netherlands.
Singapore, with its business and regulatory environment resembling that of a free trade zone, has succeeded in attracting 4,200 global companies that set up their regional headquarters there.
The island-nation has also become a natural choice for them to manage and coordinate their operations across the Asia-Pacific regional markets.
Once the planned free trade port materializes, Hainan island will become the world’s largest free trade port destination by land size. Hainan has more than 1,800 kilometers of coastline and 35,400 square kilometers of land, almost 50 times that of Singapore (more than 710 sq km of territory) and almost 9 times that of Dubai (more than 3,980 sq km of land).
Hainan island will likely see development of more port, shipping and maritime research facilities, which should allow it to operate more cruise vessels, bulk, container and oil shipping services to Southeast Asia, Europe and Africa, as well as assist the island’s fastgrowing tourism and ocean development sectors.
Even though Hainan has a weak foundation in infrastructure such as transportation networks, healthcare and education systems in comparison with Taiwan province or Singapore, its development standards will be set based on experiences gained from other major cities such as Shanghai, Shenzhen and Xiamen, supported by favorable government policies.
Its impeccable record in clean environment and Nature’s bounty is a big plus. So, infrastructure investment is expected to soar in Hainan.
Long-term benefits of built-up infrastructure are obvious. Even the sheer infrastructure construction process itself will likely stoke Hainan’s economic growth.
To reach long-term goals, Hainan will seek breakthroughs like systemic reform of its economic structure, social organization, administration and ecological advancement, all of which will help improve its services sector.
To prevent income gaps between different areas, the government will likely seek to develop the island as a whole. It will endeavor to integrate innovation into city planning, and pay special attention to areas like municipal management, resource pricing, ecological protection and service industry development.