Hainan’s Transitional Milestone: An Exclusive Interview with Governor Liu Xiaoming

Hainan Province, known for its stunning landscapes and burgeoning economy, is on the brink of a pivotal milestone with the imminent establishment of an independent customs regime. This significant development is not merely a bureaucratic adjustment but part of a broader strategy that underlines Hainan’s commitment to embracing globalization and fostering international trade. In a recent exclusive interview with CGTN, Governor Liu Xiaoming shed light on this ambitious transition, emphasizing its importance in positioning Hainan as a leading player on the global economic stage.

A Historic Initiative

The unfolding changes at Hainan’s Free Trade Port (FTP) reflect years of planning and a vision laid out in the province’s development blueprint. Recognized as a key goal in the provincial government’s activity report for seven consecutive years, the move towards an independent customs regime signifies a deep-rooted commitment by the Chinese government, particularly underscored by President Xi Jinping's support. The president has highlighted the necessity for a smooth, coordinated transition, ensuring both efficiency and compliance with regulatory frameworks.

As Governor Liu confirmed during the interview, preparations for this transition are advancing steadily, aiming for completion by the year’s end. This strategic approach counters misconceptions about isolation, adopting a model that encourages an “open first line, controlled second line, and free circulation within.” This framework not only facilitates international trade but also ensures necessary regulatory oversight between Hainan and mainland China.

Creating an Inviting Business Environment

Beyond the customs shifts, Hainan is actively working to enhance its overall business environment, seen as a crucial driver for successful integration into the global market. The province aims to cultivate a market-oriented, law-based, and globally connected entrepreneurial landscape. Initiatives to streamline government services have positioned Hainan as a pioneer nationally, implementing a unified platform for business services that encompasses strategic matchmaking, credit enhancement, and regulatory support. Notably, foreign enterprises registered in Hainan enjoy equitable access to these services.

In response to apprehensions from foreign investors regarding their operations within the province, Governor Liu emphasized enhancing internet access and easing payment processes. Measures have been rolled out to simplify financial transactions, thereby improving everyday operations for international businesses and individuals alike.

Strategic Industries Driving Growth

Hainan is centering its efforts on four pivotal sectors: tourism, modern services, high-tech industries, and tropical agriculture. The contribution of these fields to Hainan’s economy surged from 52.4% in 2018 to an impressive 67% in 2023. Additionally, the province has laid out five strategic directions for growth, encompassing agriculture, marine industries, aviation, environmental sustainability, and the digital economy.

Of particular significance is the development of the marine sector; with approximately two million square kilometers of ocean under its jurisdiction, Hainan is harnessing its maritime resources as a cornerstone of its future economy. Nearly 1,000 companies and research institutions are already engaged in deep-sea technology and marine industries, with the maritime economy contributing over a third to the province's GDP and experiencing double-digit growth. Future developments will target areas such as deep-sea energy, advanced equipment manufacturing, marine aquaculture, biomedical applications, and maritime tourism, aiming to create a “new Hainan on the sea” over the next decade.

Commitment to Ecological Sustainability

In conjunction with economic endeavors, preserving environmental sustainability is a key priority for Hainan. The province is acknowledged as having the best ecological environment in China. A prime illustration of Hainan’s ecological initiatives is the Po’ao demonstration zone, characterized by nearly zero carbon emissions. Through energy-efficient building retrofits, a shift from fossil fuels to renewable resources, and agro-photovoltaic systems, carbon emissions on Tung-Yu Island, where the Boao Forum for Asia is held annually, have been reduced by approximately 96.2%. The German Energy Agency has recognized this area as China’s first regional demonstration zone with an almost negligible carbon footprint.

With the impending launch of the independent customs regime, continual improvements to the business environment, strategic industrial developments, and firm ecological commitments, Hainan is poised to emerge as a global leader in trade, innovation, and sustainability. The future of the Free Trade Port promises dynamic growth and increased international engagement, ensuring its progress aligns with national and global economic ambitions.

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