Combining the world’s largest FTP with the Belt and Road

By John Lee / HICN / Updated: 11:27,07-May-2021

On April 13, 2018, President Xi Jinping attended the Hainan Special Economic Zone’s 30th anniversary celebration, where he gave an important speech announcing that the Central Committee supported the significant step of comprehensively deepening reform and opening in Hainan. On June 1, 2020, the Master Plan for the Development of the Hainan Free Trade Port was officially published and implemented. Time flies, and in a flash, three years have passed since President Xi’s original declaration. During that time, the whole world experienced the historic Covid-19 pandemic, which had a major effect on politics, the economy, and culture across the globe. Over the past three years, Hainan has made an all-out effort in courageously pioneering the special administrative region project, steadily advancing the successful launch of the Free Trade Port.

In his important 4.13 speech, President Xi emphasized that “Hainan must take full advantage of the opportunity afforded by the development of the Free Trade Port, strengthening multilevel, multifaceted, pragmatic cooperation with the countries and areas located along the Belt and Road Initiative, creating a cultural, agricultural, and tourism exchange platform on the 21st Century Maritime Silk Road, and take even more concrete steps along that Road here in the strategic hub of Hainan”.

A coastal economic belt similar to that of the US west coast

“China - Myanmar Economic Corridor” to jointly form a South Asian west coast economic belt together with the Hainan Free Trade Port

The China-Myanmar Economic Corridor project has the important Belt and Road hub of Myanmar providing access to the sea from southwestern China - and along with Hainan, the world’s largest Free Trade Port and China’s largest ocean province, they jointly form the region's economic southwest coast, a coastal economic development region comparable to the west coast of the USA.

From now on, these two geographical locations will carry out cultural exchanges, providing mutual economic aid, complimenting each other’s strengths, and develop in concert, progressively introducing the benefits of Hainan’s 30 years of special economic zone development experience & success into every part of Myanmar’s society, while at the some time introducing Myanmar’s school of business thought and planning into all walks of Hainan life, charting bilateral, multifaceted communication & exchange between China and Myanmar in the area of global investment.

Kyaukpyu, located in northwest Myanmar, and its special economic zone, as well as Yangon in the south, are both important seaports for the China-Myanmar Economic Corridor and major hubs on the Belt and Road Initiative. President Xi’s significant directive to Hainan to “take full advantage of the opportunity afforded by the development of the Free Trade Port, strengthening multilevel, multifaceted, pragmatic cooperation with the countries and areas located along the Belt and Road Initiative” gives clear direction to the trade, investment, and cultural exchanges between Hainan and Myanmar. Hainan must take advantage of the benefits offered by the central government’s most open policy, integrating China’s highest-level strategy, actively promoting and implementing cooperation, passing more concrete policy measures, and accelerating the development of the Hainan Free Trade Port.

Developing innovative financial systems with the help of the FTP

Turning Hainan into an investment “incubator” for Myanmar and the whole world

Midwestern Myanmar, which boasts the country's the largest land area, highest population, and largest amount of resources, northeast Myanmar’s Kyaukpyu region, with its excellent natural harbor, and southern Myanmar’s open Yangon New City, have all been part of the China-Myanmar open economic development project for over 10 years. In addition to the Kyaukpyu special economic zone and Yangon New City, the construction of major infrastructure projects including the China-Myanmar oil and gas pipeline, highway, and high speed rail are estimated to involve 70 billion USD in investment, laying an excellent foundation for future China-Myanmar economic development. So what do China’s investments in Myanmar have to do with Hainan? Hainan is now the world’s largest free trade port, and must make a major breakthrough in terms of innovation, not only attracting capital investment and talent from developed nations for Hainan’s continued development, but also attracting top talent from Belt and Road nations to Hainan in order to reach the province’s goals of bringing in talent from every part of the world. Hainan setting up an innovative financial system in Myanmar, the closest point on the Belt and Road Initiative, will offer an excellent cooperation example for the future of the Belt and Road Initiative.

Just as Hainan is now able to boldly explore the use of new international medicines and new types of medical equipment currently hitting the market with great success, the province will also boldly step forward to explore China-Myanmar finance, gaining experience which can then be extended throughout the Belt and Road region. At the same time, it will attract funding from around the globe, including Chinese mainland investors who had been considering investing capital in Myanmar but viewed this as a foreign investment, and causing them to first invest in the Hainan Free Trade Port. As Hainan’s climate is similar to Myanmar’s, the province will attract top management talent from Myanmar to come to Hainan for short to medium term business ventures, deepening China-Myanmar personnel and cultural exchange as business cultures blend, laying a foundation of goodwill, talent, and cultural connections in Myanmar for the Belt and Road Initiative, advancing project implementation and safeguarding international investments.

A Myanmar Investment News report showed that although over the past ten years, Myanmar’s investment policies and environment have been extremely inhospitable to foreign investment, global investors still have had great interest in this “last investment frontier”, and have continued to pour capital into every field, especially focusing on acquiring land resources. However, most of these investments were hidden, illegal investments and therefore completely lacking in legal protection.

From now on, the Hainan Free Trade Port will work to attract this share of investment through financial innovation, while at the same time also attracting Myanmar’s trade and commerce talent to become entrepreneurs in Hainan, bringing global investment and Myanmar talent into this major Chinese domestic and international economic hub. With Hainan acting as an investment incubator, and with the support of the Chinese mainland market, risks for investors from China, Myanmar, and around the world will be significantly lowered, allowing them to enjoy returns on their Belt and Road investments brought about by Myanmar’s advancement, and, even more importantly, benefiting the implementation of the Belt and Road Initiative in the important hub of Myanmar and safeguarding later overseas investments. Meanwhile, the Hainan Free Trade Port will also be able to explore this new approach to attracting more diversified investments.

John Lee, who has been living outside of Myanmar for 14 years, was the Vice-Secretary of the Myanmar China Chamber of Commerce for six years and is highly familiar with the business environment and people of every strata of Myanmar society. He also has wide-ranging connections with business-people from many countries. He personally experienced the entire Belt and Road Initiative implementation and advancement process in Myanmar, and also holds a complete understanding of the democratic transformation occurring there and the rapid fluctuations in the investment situation brought about by the country’s immature business culture. He founded the Myanmar Investment News, the only in-depth Burmese, English, and Chinese language magazine covering Myanmar’s trade and investment news in order to create a complete Myanmar trade investment exchange platform offering investors from around the world a multilingual and multicultural exchange service.

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