China envisions Hong Kong 2.0

Hainan province could become a new hot spot for businesses, jet-setters

HAIKOU, China — Low taxes. Duty-free shopping. Sandy beaches. The Communist Party evenwants to put people on yachts.

China wants to turn Hainan province, an island the size of Maryland located in the South China Sea, into a free-trade port and international commercial hub. The island, with 9.5 million full-time residents, is offering new incentives to transform the snowbird haven into a destination for global companies, jet-setting financiers andsophisticated shoppers alike.

China already has a place like that: Hong Kong, with 7.5million people.

But the future of the former British colony has been thrown into doubt. After last year’s prodemocracy protests, the Chinese government has broughtHongKong to heel with a national security law and a crackdown on dissenters.

It is not clear whether the events have permanently damaged the longtime bastion of economic liberty.

Transforming Hainan would give China a financial and corporate Plan B.

Still, copyingHongKong will not be easy. Much of Hong Kong’s success comes fromits laissez-faire regulation, independent judicial system, unfettered movementofmoneyacross its borders and the free exchange of information — liberties all lacking in the mainland.

Beijing has shown little inclination to relax its control in a way that would

KEITHBRADSHER/THE NEWYORK TIMES Hainan province has introduced measures to help it compete with Hong Kong.