Aerial photo taken on May 26, 2021 shows the Yangpu international container port at Yangpu economic development zone in South China's Hainan province. (Photo/Xinhua)
Tropical island rides FTP advantages for better consumption, trade-in services
With China creating more room for local governments to cultivate new growth points and attract global capital, major cities in the country's southern province of Hainan are rushing to build international and regional hubs for consumption, trade-in services and emerging industries, said experts and business leaders.
They said many opportunities arose from the province's efforts to achieve the goal of island-wide independent Customs operations by the end of 2025 and to firmly grasp the focus of integrated institutional innovation, as well as the central government's policy support that was unveiled last year, to introduce its first negative list on cross-border trade-in services for the Hainan Free Trade Port.
China released a master plan in June 2020 to build the island of Hainan into a globally influential and high-level free trade port by the middle of the century.
"With the ongoing development of the Hainan FTP, the Hainan market will continue to unleash vigorous growth momentum. This has attracted our interest and encouraged us to invest more in this fast-growing market," said Yann Bozec, president for the Asia-Pacific of Tapestry, which owns a number of US fashion brands, including Coach and Kate Spade.
In addition to opening its travel retail headquarters for China in Haikou, Hainan's provincial capital, in April, the US group plans to open more stores in major cities across Hainan in the second half of 2022.
Serving as a key platform to promote high-level opening-up, and smooth domestic and international circulation, the second China International Consumer Products Expo will be held in Haikou from July 26 to 30, according to the Hainan International Business Council.
Supported by a friendly and fast-growing business environment, Hainan saw total foreign investment inflows surge by 80.58 percent on a yearly basis to $1.44 billion in the first five months of this year. Many global companies chose to settle their services, innovation and manufacturing facilities in Haikou and Sanya, data from Hainan's provincial department of commerce showed.
In the meantime, foreign investment flow into the modern services industry amounted to $1.3 billion in Hainan FTP, accounting for 90 percent of the total utilized foreign investment in the port. Among them, leasing and business services, scientific research and technology services and financial services ranked as the top three businesses.
During the past two years, over 150 policies and measures, including the nation's first negative list for services trade and the zero-tariff policy for some imported goods, have taken effect in Hainan, promoting trade and investment facilitation.
Zhang Jianping, head of the center for regional economic cooperation at the Chinese Academy of International Trade and Economic Cooperation, said Hainan's transformation into a free trade port will open new doors for trade between China and other signatory economies of the Regional Comprehensive Economic Partnership, especially member economies of the Association of Southeast Asian Nations.
Located at China's southernmost tip, the Hainan FTP is well placed to consolidate ties with ASEAN, he said, adding ASEAN businesses will be incentivized to invest in Hainan, especially in service businesses, benefiting from the easing of restrictions and tax breaks.
Shi Zongwei, director-general of Haikou Customs District, a local unit of the General Administration of Customs, said travel between Thailand, Malaysia and Singapore used to be a popular route for outbound Chinese tourists. Hainan, an international tourism island and duty-free hub, certainly can be a part of the itinerary in the coming years.
To be better prepared, Hainan FTP launched the first airport project for independent Customs operations on May 31.
Construction work, with an estimated investment of 420 million yuan ($63 million), has begun in the Haikou Meilan International Airport, involving the upgrade of the terminals, scanning equipment and information supervision system. Similar projects for the other two airports on the island－Sanya Phoenix International Airport and Qionghai Bo'ao Airport－have been launched by the end of June, according to the Hainan provincial government.