Hainan Free Trade Port a global launchpad

What do these stories add up to? A modern industrial system that is no longer a blueprint but a living reality. From Dec 18 to April 30, Hainan added 128,000 new enterprises, including 1,016 foreign-invested ones, a 35.5 percent year-on-year increase. Customs-registered foreign trade firms surpassed 100,000 for the first time, while offshore duty-free sales reached 18.43 billion yuan, up 23.2 percent.

In the first five months, Hainan's four leading industries — tourism, modern services, high-tech manufacturing and tropical high-efficiency agriculture — generated about 230.5 billion yuan in value, accounting for roughly 70 percent of the island's GDP.

High-tech enterprises now number 1,552, contributing 17.3 percent of GDP, with advanced manufacturing clusters in biomedicine, petrochemical new materials and premium food processing gaining momentum.

Tourism remains a powerhouse: 54.21 million domestic and international visits in the first five months, up 11.8 percent, generating 120.37 billion yuan, a 14.3 percent increase.

Yang Shanhua, deputy director of Hainan's Development and Reform Commission, said the island-wide special customs operations have accelerated the building of a modern industrial system.

Zhao Jinping, vice-president of the China Association of Trade in Services, said Hainan Free Trade Port can serve as a stress test for China's high-level opening-up, against the backdrop of escalating global geopolitical uncertainties and rising trade protectionism.

"As its institutional and policy frameworks continue to improve, Hainan will evolve into a crucial hub enabling enterprises to tap into new investment and trade opportunities across the bloc of Regional Comprehensive Economic Partnership, the largest free trade agreement in the world," Zhao said.

Tu Xinquan, director of the China Institute for WTO Studies at Beijing's UIBE, said: "As a frontier and test bed for China's reform and opening-up, Hainan can act as a core hub connecting the Chinese mainland with other members of RCEP, much like Singapore and the Hong Kong Special Administrative Region have facilitated exchanges between the Chinese mainland and Western countries."

Pamela Mar, managing director of the Digital Standards Initiative of the International Chamber of Commerce based in Singapore, said Hainan can play an "excellent" role in demonstrating what seamless cross-border trade looks like.

"It means that Hainan's systems for cross-border trade and compliance will be able to interconnect with many other trading partners, and enterprises in Hainan will be able to treat trade seamlessly using globally interoperable trade standards for data and documents," Mar said.

Peter Burnett, chief executive of the China-Britain Business Council — who has visited Hainan several times — said: "Hainan is not just a free-trade zone — it's a free-trade port, the only one in China. That means the whole island is included, with very low tax rates and zero-tariff policies. I expect to see investment, growth and prosperity in Hainan."

Sean Stein, president of the US-China Business Council, offered a concrete example of how Hainan's policies are changing investment decisions. "Previously, a major US company that refurbishes used products from Southeast Asia and Japan could not do so in China due to regulations. Now, after the kickoff of island-wide special customs operations, the company is setting up a base in Hainan to renovate and re-export the products globally," Stein said. "That's a big, encouraging change."

Guo Da, executive president of the Hainan Institute for Free Trade Port Studies, said high-level free trade ports such as Hainan can play a bigger role as RCEP cooperation deepens. Currently, about 40 percent of Hainan's foreign trade flows to RCEP member economies, he noted.

Driven by unified RCEP rules and Hainan's free-trade port policies, trade between Hainan and RCEP members has grown at an annual average rate of over 20 percent in recent years, he said.

Chi Fulin, president of the China Institute for Reform and Development, said: "China's vast market has become the largest source of certainty for RCEP's development.

"The next five years are crucial for China to build a strong domestic market. The efforts to accelerate China's tariff reduction commitments under the RCEP framework, especially on intermediate goods, and to further open up services trade will provide enormous new growth engines for RCEP cooperation."

Chi also highlighted the strategic role of the Hainan Free Trade Port. "As a major gateway, Hainan is well-positioned to pioneer breakthroughs in finance and data flows, and serve as a vital platform linking the Chinese market with ASEAN, thus better safeguarding regional industrial and supply chain stability."

Nicholas Kwan, deputy head of the chief executive's policy unit of the Hong Kong SAR, said: "Hong Kong has long aspired to join the RCEP and looks forward to cooperating with Hainan to achieve a 'one plus one greater than two' effect.

"Hong Kong can be a great partner for Hainan. For instance, in the commercial space sector, Hong Kong's financial and service strengths can be effectively aligned with Hainan's Wenchang commercial space launch site to facilitate cooperation."

Kim Do-hoon, former president of the Korea Institute for Industrial Economics and Trade, said that to give full play to Hainan's potential, more efforts are needed to cultivate local industries such as transport, and attract more big companies to invest in the island.

Zhu Jianmin, chairman of Oxiranchem Group, said: "The Hainan FTP's tax policies, unique geographic location and logistics advantages have enabled us to source raw materials globally and target ASEAN markets effectively."

Six months in, Hainan has passed its first major test. The world is watching — and increasingly, the world is participating.

Contact the writers at masi@chinadaily.com.cn