Hainan free trade port: pioneering China’s open economy vision

HAINAN: Hainan, China’s largest economic special zone, is poised to emerge as the world’s premier free trade port hub by 2035, as part of the nation’s ambitious economic vision.

In April 2018, the Central Committee of the Communist Party of China charted a course to transform Hainan Island into a free trade pilot zone, laying the groundwork for a Chinese-style free trade port. Since then, significant strides have been made in implementing this transformative initiative.

At the heart of the Hainan free trade port are a series of preferential policies aimed at liberalizing and facilitating trade, investment, data flows, and tax regulations. These policies underscore China’s commitment to high-level openness and its confidence in promoting economic liberalization on the global stage.

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In terms of trade liberalization, the Hainan free trade port allows for the free entry and exit of foreign goods, while adopting a negative list system for cross-border service trade. Similarly, investment liberalization measures include relaxing market access restrictions, implementing a commitment system for market entry, and promoting a “minimum clearance” investment regime. Additionally, efforts are under way to innovate and improve investment policies, further facilitating enterprise establishment, operation, and deregistration processes.

Ensuring orderly and secure data flows is another key aspect of the Hainan Free Trade Port’s strategy. This involves expanding communication resources, initiating pilot projects for international Internet data exchange, and actively promoting the digital economy.

To enhance its competitiveness on the global stage, Hainan is also implementing tax policies designed to attract investment and talent. These include gradually implementing a “zero tariff” policy for imported goods, offering a competitive corporate income tax rate of 15%, and providing tax exemptions for high-level and in-demand talent working within the free trade port.

The construction of the Hainan Free Trade Port is a multi-phase endeavor. By 2025, the focus is on establishing the policy and institutional framework for trade liberalization and investment facilitation. By 2035, the aim is to have a more mature institutional framework and operational model in place, marking a significant milestone in China’s open economy journey.

Looking ahead, the vision for the Hainan Free Trade Port extends to the middle of the century, where it aims to become a high-level free trade port with strong international influence. Through its comprehensive policies and strategic initiatives, Hainan is set to play a leading role in shaping the future of global trade and economic cooperation.