Hainan eyes higher-quality development

By introducing 28 new measures recently to propel the high-quality growth of the Hainan Free Trade Port, especially by facilitating faster goods and services trade, the government has not only responded to the demand of the market players but also aims to achieve the higher-level and phased development goals by 2025.

That certain countries have, of late, resorted to protectionist measures has severely disrupted the global economic and trade order, increased the cost of resources and posed a challenge to economic globalization, thereby undermining the growth of the least-developed countries and developing economies. In addition, the COVID-19 pandemic has increased global uncertainties, further slowing the pace of global economic recovery.

The 28 new measures, jointly introduced by the Ministry of Commerce and other 19 central government departments, will not only provide strong policy support for the development of the Hainan Free Trade Port and promote the "dual circulation" development paradigm－which is centered on the domestic economy, with the domestic and foreign markets reinforcing one another－but also show China's determination to further liberalize international trade, help develop an open world economy and expedite globalization.

While 13 of the 28 measures focus on goods trade, the rest deal with services.

The new policy measures will promote international economic and trade rules to serve the development needs of the Hainan Free Trade Port, ensure the implementation of support policies, and help liberalize global trade. The policy measures will also help implement the Overall Plan for the Construction of Hainan Free Trade Port, which was introduced in June 2020, promote higher-level opening-up, and enhance the free and efficient flow of production factors.

The Yangpu bonded port in Hainan province will pilot a special customs supervision area where imports and exports of crude and refined oil will not be subjected to the general regulations governing enterprises' functions. Sugar imports, too, will be exempt from total tariff quota management. And while in some special areas, import licenses for mechanical and electrical goods will not be required, the development of second-hand car exports and new offshore international trade will be encouraged.

The policy measures have been designed to serve the needs of the Hainan Free Trade Port and will give full play to its competitive advantages in culture, digital trade, tourism and modern service sectors. Yet despite having a long coastline, Hainan does not enjoy the growth characteristics of the Hong Kong Special Administrative Region, or Singapore or other successful port cities, so it needs to develop in accordance with the province's current development conditions and needs.

As a matter of fact, taking advantage of its unique environmental and geographical advantages, Hainan is rapidly building a modern industrial system supported by tourism, modern service industries, emerging industries and tropical agriculture. Over the past three years, the number of high-tech enterprises in Hainan has increased by 273 percent, internet industry revenues have risen by 192 percent, and the supporting role of the high-tech industry has become increasingly obvious, according to data released by the Ministry of Commerce.

Hainan's digital service trade reached 6.73 billion yuan ($1.04 billion) in 2020, up 130 percent year-on-year, while the container throughput of Yangpu Port exceeded 1 million twenty-foot equivalent units (TEUs).

To create more room for Hainan's growth, the government has abolished the need for registration to import and export technology, and licenses for establishing auction firms. The government has also established a fast track for service trade and facilitated safety management cooperation between the Ministry of Commerce and Hainan province, and pledged to standardize domestic regulations in some key areas in a bid to boost free trade in the service sector.

Based on these promising developments, we can assume that the implementation of these measures will expedite the establishment of a policy and institutional system to achieve trade and investment liberalization by 2025.

In the long term, the Hainan Free Trade Port will continue to implement such policies to attract more foreign direct investment, increase trade with its overseas trading partners such as ASEAN member states, and build an advanced and modern service system to pursue higher-quality development.

The views don't necessarily reflect those of China Daily.

The author is a professor and director of the Institute of International Business at Beijing-based University of International Business and Economics.