Hainan Free Trade Port to enjoy excellent development opportunities

By Tan Choon Hok / HICN / Updated: 17:27,17-March-2021

2020 was a very challenging year, as well as a year that pushed people to make great efforts. In 2020, the Chinese people displayed great solidarity and persistence in fighting the Covid-19 pandemic as well as a strong motivation to push forward. A great victory was won against the pandemic, the economy grew against all odds, the overall fight against poverty has been won, and expectations for the next hundred years are bright.

During this most difficult year, China has made the greatest achievement. This is the pride of the Chinese people. Yet at the moment of greatest pride, another great undertaking for the next one hundred years has been laid before them, and awaits the continued efforts of the entire population. Onward!

Remote Hainan, while perhaps not the most dazzling part of China, has been making great efforts in recent years in a new developmental concept, and now the development of the Free Trade Port is in full swing. A new journey lies ahead. The winds are favorable, and the voyage has begun!

Overseas Chinese continue to provide great strength and a reliable international talent pool for the development of the Hainan Free Trade Port

Of China’s 31 provinces, cities, and autonomous regions, Hainan is the smallest in terms of land area. In 2020, Hainan’s economic GDP was 553.239 billion yuan. In comparison with other provinces such as Guangdong and Jiangsu with large economies, Hainan still has a huge growth potential. In 2020, Hainan’s total imports and exports were valued at 93.3 billion yuan, including 27.64 billion yuan in exports and 65.66 billion in imports, with an import/export adverse trade balance of 38.02 billion yuan. Hong Kong, Japan, and Singapore head the list in terms of import and export, and when Singapore is excluded, the entire ASEAN region only ranks number seven, showing that bilateral trade between Hainan and other ASEAN countries still retains great potential to rise. Hainan faces the Philippines, Indonesia, Brunei, Malaysia, Singapore, Thailand, and Vietnam across the sea, and thus enjoys great cooperation advantages with Southeast Asia. Hainan has the largest sea area of any Chinese province, with immense ocean resources, giving it a robust development potential.

Homesickness plagues the Chinese people, and Hainan is well known as a hometown of vast numbers of overseas Chinese, many of whom have settled in the Philippines, Malaysia, Singapore, and Indonesia. Since the start of Reform and Opening, the Chinese government’s policies guaranteeing the rights of overseas investors have attracted a great deal of overseas investment capital. The Free Trade Port represents Hainan’s best current development opportunity, and overseas Hainanese living in all four corners of the world are important investment promotion targets. Hainan can make use of these overseas Chinese business connections to bring even more international investment to the island.

Overseas Chinese understand the cultures and unique communities of their various countries, and are capable of forming a bridge, helping Chinese people and those from their home countries get to know and understand each other better. At the beginning of the Opening and Reform period, overseas Chinese made clear contributions to China’s economic development, and this year as the development of Hainan’s Free Trade Port kicks off, overseas Chinese continue to provide great strength and a reliable international talent pool.

The development of the Hainan Free Trade Port requires the local people of Hainan to have both confidence and ability in connecting to the international market

The development of the Hainan Free Trade Port brings an all-new open format FTP to the globe, and strengthening connections with the outside world offers the best choice for Hainan to expand business opportunities and improve self -confidence. Business opportunities benefit not only businessmen, but also allow international traders to view Hainan as a place with an abundance of natural resources, opportunities, and future development potential. I am confident that as Hainan begins to lay out the development of the Free Trade Port, ample plans have already been made, not only in the area of international mechanisms, but also in preparing the local people to cater to the international market. Natural resources are the hardware, and Hainan certainly faces no lack of unique development resources stemming from the island’s natural situation. The software aspect is training the local people of Hainan to have confidence and ability to interact with international businesses, residents, and travelers.

Hainan is located in a tropical region, with a climate and scenery similar to other SE Asian countries. It may not have many advantages in the Southeast Asian tourism market, but the year-round warm weather and plentiful rain offer clear advantages over other Chinese provinces. In the north, the cold snow falls, while in Hainan bright blue skies, sandy beaches, and shady palms offer the perfect vacation getaway spot for sun-loving northerners. In 2020, due to the influence of the Covid-19 pandemic, Hainan received 64,550,900 visits, a year-on-year decline of 22.3%. There were 64,326,800 visits from domestic travelers, and 224,000 overnight visits from international travelers, which included 176,000 non-Chinese visitors, 27,200 from Hong Kong, 4,700 from Macao, and 16,200 from Taiwan, while total tourism revenues were 87.286 billion yuan. These numbers show that China’s internal consumers provide the greatest support for Hainan’s tourism industry. Of course, China is now emphasizing both domestic and international consumer power, and so with domestic consumers providing the backbone, Hainan can happily welcome international travelers as a bonus.

The internationally renowned Boao Forum for Asia is Hainan’s most attractive calling card. With the Forum and Hainan’s international conference facilities and experience, it will be quite natural for the island to become a hotspot for international meetings and events. Historically, a large number of famous personages have visited Hainan, including the Northern Song Poet Su Dongpo, also known as Su Shi, the ancient Hainan-born official and Song calligrapher Cai Xiang, Hai Rui, and many more, each adding another layer to the deep local culture and adding to the island’s historic cultural resources. Hainan’s culture is a mixture of China’s Central Plains, southern, Fujian, Guangdong, and Southeast Asian cultures, creating a unique island culture that exists nowhere else on earth, and adding even more richness to the province’s tourism resources.

The development of the Hainan Free Trade Port will create a new, important hub on both land and sea international trade routes

These days, the ancient Silk Road is once again blossoming in dazzling splendor, and the China-Europe route is its brightest highlight, bringing Chinese products together in one great, thick column. The development of this new channel for international land and sea trade follows in the wake of the established trade between China and Europe, revitalizing the economic development of China’s western provinces and providing not only import and export capabilities, but also an unending flow of products traveling along these two paths across the land and sea.

Hainan forms a part of the new international land and sea trade routes, and after the Hainan Free Trade Port is developed, it will become an important hub on these trade routes. In the early days, Hainan products had to take a roundabout route to enter western China, traveling from Shanghai along the Yangtze River into Chongqing. This took a very long time, and shipping costs were sky high. Now, they can be shipped directly from the Yangpu Port to Qinzhou in Guangxi, then be transported by train to Chongqing, greatly reducing the shipping distance, time, and cost, and making the products much more competitive on the market! Plus, products from western China can take the reverse route, and from Yangpu Port they can be shipped directly to Singapore. This route is also open to goods from China’s other coastal ports, which can be transferred through Yangpu to all parts of Southeast Asia via this new channel.

Opening up western China has tremendous market potential. Guangxi is the gateway to the ASEAN countries, and the rapid opening and development of Qinzhou Port is a key to future growth. Hainan’s Yangpu Port is currently rather small, and throughput is low. If it is rapidly expanded and improved, increasing container shipping routes and overall competitiveness, it will be of great benefit to the Free Trade Port. This door giving access to both the Pacific and Indian Oceans, and, in time, all oceans of the world, will be a great source of revenue.

The Hainan Free Trade Port, located in the center of the Regional Comprehensive Economic Partnership area and serving as a point of connection, offers great future development opportunities

For a very long time, Malaysia has been an important trading partner for China in the ASEAN region, but it is clear that there is still ample room for bilateral trade growth with Hainan. As China continues to open up, beautiful Hainan is developing a Free Trade Port, and conditions are ripe on both sides to get a large slice of the economic pie as new opportunities arise.

In November of 2015, Malaysia and China signed "the China-Malaysia Port Alliance" agreement, which was one of the results of the Belt and Road Initiative and aims to strengthen bilateral port transit logistics industry cooperation opportunities, and ultimately to promote bilateral cross-border trade. Currently, there are 21 Bilateral Alliance ports.

According to media reports, the COSCO shipping group plans to focus on Qinzhou and Yangpu Ports, increasing and optimizing routes to Southeast and Southern Asia, as well as opening up routes transiting through Singapore to major worldwide shipping routes covering Australia, New Zealand, Europe, Africa, the Persian Gulf, the Red Sea, and other areas. At the same time, a network covering Northeast Asia, North, Central, and South America is taking shape with Qinzhou serving as the gateway and Yangpu as the international hub of these new international routes. If Malaysia’s Kuantan and Klang Ports are also brought into the Alliance, each of the four ports will bring their own advantages and serve as compliments to each other, strengthening the overall Alliance in the area of reducing shipping costs and adding unique specializations.

Hainan’s neighbor Guangxi’s economy is growing like wildfire, and the large world-class ports in the Greater Bay Area of Guangdong, Hong Kong, and Macau are located close at hand. The overall structure of this sector means that when one side provides impetus, all sides benefit from the resulting growth. Hainan has the ability to develop through internal coordination, showing its status as a Free Trade Port and working to bring in more manpower, technology, and capital, thus expanding development opportunities and its free, open structure.

Through over eight years of negotiation, China, Japan, South Korea, Australia, New Zealand, and the 10 ASEAN countries formally signed the Regional Comprehensive Economic Partnership agreement, indicating that the world’s highest population, largest trade scale Free Trade Port with the world’s highest development potential has officially begun its journey. Trade barriers have been lowered, regulations and statutes have been simplified and made more convenient, promoting trade between all member countries, improving market access for goods and services, and attracting more and more foreign invested companies to the region. The world’s largest Free Trade Port agreement will incentivize production capability in all member countries, boosting intra-regional trade development. Hainan lies the closest geographically to the ASEAN countries of all Chinese provinces, standing at the center of the Regional Comprehensive Economic Partnership area and serving as a point of connection. With Hainan’s geographic location advantages and Overseas Chinese network, it is well positioned to enjoy an even larger slice of the region’s economic pie.

Hainan faces the sea, like a bright Chinese eye gazing out over the vast Pacific Ocean. Standing on the land looking out over the sea, Hainan looks from the east to the west, viewing the world. Looking ever farther, and growing ever larger, this is the future of Hainan!

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