State firms ramp up operations in Hainan FTP

Consumers check out cosmetics at a duty-free store in Sanya, Hainan province, in July. [Photo by Sha Xiaofeng/For China Daily]

Facility to strengthen cooperation with countries in the Southeast Asian region

Centrally administrated State-owned enterprises from transportation, tourism, energy, smart city and infrastructure sectors have notably enlarged their presence in the Hainan Free Trade Port (FTP) to seek fresh momentum and move closer to Southeast Asian markets, said the country's top State assets regulator.

Their moves come after China released a master plan for the Hainan FTP last month, aiming to build the whole of Hainan Island into a globally influential high-level free trade port by the middle of the century.

The Hainan provincial government had established strategic partnerships with 24 central SOEs including China Merchants Group and China COSCO Shipping Corp by the end of June. It saw over 40 central SOEs and their subsidiaries build regional headquarters and business units across the province with 47 billion yuan ($6.72 billion) of registered capital, said the State-Owned Assets Supervision and Administration Commission of the State Council.

Many domestic and foreign companies have announced new investment plans in the Hainan FTP in recent months as they believe the country's preferential policy package to build the area into a globally influential and high-quality free trade port will drive demand from businesses they run, said Zheng Donghua, deputy director of the SASAC's research center in Beijing.

Supported by many favorable policies, the Hainan FTP can be an ideal place to optimize the layout and structure of the State-owned economy to make it more competitive, innovative, controllable, influential and more capable of dealing with risks, said Wei Xiaoquan, a researcher specializing in regional economic development at the University of International Business and Economics in Beijing.

The Hainan provincial government unveiled this month that central SOEs have brought a number of major investment projects worth more than 10 billion yuan in value into the Hainan FTP, including China Tourism Group's Haikou international tax-free city project and the second-phase nuclear power project of the Changjiang program jointly developed by China National Nuclear Corp and China Huaneng Group Co Ltd.

Hainan Oil Refinery and Chemical Co Ltd, the Hainan refinery unit of China Petrochemical Corp－the country's largest oil refiner by production volume－plans to produce up to 1,000 KTA(kilotons annually) of ethylene in a refining renovation and extension project. The province is seen serving as a new growth engine for ethylene in both the nation and the global economy.

The upgrade is expected to boost economic growth in the downstream sector by more than 100 billion yuan, the group said in a statement.

Because the operations of central SOEs require a large number of upstream and downstream support industries, they helped Hainan attract $846 million in foreign direct investment in 2019. They attracted $270 million in global capital in the first five months of the year, said SASAC.

Xu Lirong, chairman of China COSCO Shipping, the nation's largest shipping firm by fleet size, said the overall plan to develop the Hainan FTP will boost industrial chains in the Asia-Pacific region and boost trade with member economies of the Association of Southeast Asian Nations, as well as economies involved in the 21st Century Maritime Silk Road.

Eager to further promote exchanges in tourism, culture, investment and trade between the two countries, the Kingdom of Cambodia opened a consulate general in Haikou in October, making Cambodia the first country to operate a consulate general in China's tropical Hainan province.

Li Yufei, deputy head of the office of deepening overall reform at the Communist Party of China Hainan Provincial Committee, said:"As part of the next step, the Hainan FTP will strengthen cooperation with countries and regions in the Indian Ocean and the Pacific Ocean to apply institutional innovation from a global perspective in order to further boost trade and investment activities."

With more uncertainty facing the global economy, Tang Wenhong, a director-general at the Ministry of Commerce, said all these policy measures and investment projects will help China maintain stability in six key areas－employment, financial operations, foreign trade, foreign investment, domestic investment and expectations.

They will also be practical to enhance protection in other areas－jobs, basic living needs, business operations, food and energy security and stable industrial and supply chains, Tang added.