CHINESEPresidentXiJinping,alsogeneralsecretaryoftheCentralCommitteeoftheCommunistPartyofChina(CPC),deliveredaspeechatagatheringonApril13,2018celebratingthe30thanniversaryofthefoundingofHainanProvinceandHainanSpecialEconomicZoneinSouthChina鈥檚HainanProvince.HeannouncedthattheCPCCentralCommitteedecidedtosupportHainanindevelopingtheislandintoapilotfreetradezone,andgraduallyexploringandsteadilypromotingtheestablishmentofafreetradeportwithChinesecharacteristics.AimingtoimprovetheoveralllevelofHainan鈥檚opening-up,thedecisionhasgreatpracticalandfar-reachinghistoricalsignificance.Thereportofthe19thCPCNationalCongressemphasizedthatChinawillgrantmorepowerstopilotfreetradezonestoconductreform,andexploretheopeningoffreetradeports.Whetheritistheconstructionofpilotfreetradezonesortheexplorationoffreetradeports,variousregionsareenthusiasticinparticipatingintheprogram.ThereasonthatHainanwaschosentobuildbothazoneandportforfreetradewaslargelybasedonitsexistenceasaspecialeconomiczone.
ABrandNewHainan
Overthepast30yearssincetheestablishmentofHainanSpecialEconomicZone,theprovincehasevolvedfromaremoteislandintoamodernspecialeconomiczone,whichhasseenitsGDPincreaseby77.9times,percapitaGDPincreaseby52.4times,andlocalgeneralpublicbudgetrevenueincreaseby227.7times.Inaddition,HainanhasthebestecologicalenvironmentinChina.Atthesametime,becauseofitsrelativelyindependentgeographicalconditions,itcanplaytheroleofanationalexperimentalfieldforreformandopeningup.HumanresourceismostimportantforHainan鈥檚development.Thisdoesn鈥檛meanagatheringoflaborfactorsinthetraditionalsense,butaconcentrationofhumanresourcesandhighlyskilledworkers.ThosetalentsareexpectedtoformanewimpetusforHainan鈥檚economicdevelopment.
ItcanbeforeseenthatafterHainanbecomesafreetradeport,withGuangdong-HongKong-MacaoGreaterBayAreatotheeast,BeibuGulfEconomicZonetothewest,andtheChineseinlandtothenorth,theislandwillhavemoredevelopmentopportunities.IfHainanisbuiltintoafreetradezone,theisland,coveringanareaof35,000squarekilometers,willbecomethelargestfreetradeportintheworld,greatlyexceedingHongKongandSingapore(about1,000squarekilometersrespectively)andDubai(lessthan4,000squarekilometers).Ingeneral,Hainanhasprominentadvantagesinmarineecologicalindustryandotherindustriessuchasgreentech,health,seniorcare,tourism,andconventions&exhibitions.ToestablishafreetradeportinHainanwillbemoreconducivetoactivatingtheseadvantagesofHainanandbringtheminlinewithinternationalstandards.Theefficiencyandqualityofserviceswillbefurtherenhanced.
Hainanhascleargoalsinbuildingapilotfreetradezoneandexploringtheestablishmentofafreetradeport.InaccordancewiththeguidelinesonsupportingHainantodeepenreformandopening-upissuedbytheCPCCentralCommitteeandtheStateCouncil,effortswillbemadetodevelopHainanintoapilotzonefordeepeningoverallreformandopening-up,apilotzoneforecologicallysustainabledevelopment,aninternationaltourismandconsumptioncenter,andamajornationalstrategiclogisticszone.However,toachievetheabovegoalsisnoteasy:theremustbehugeinvestmentsbeforeconstructioncanstart,anditisnecessarytofigureoutwhatshouldandshouldnotbedone.
DosandDon鈥檛s
TheconstructionofapilotfreetradezoneandexplorationofafreetradeportneedstobecombinedwithHainan鈥檚economicdevelopmentfeatures.Forecologicallysustainabledevelopment,Hainanshouldfocusoncreatingsuitableindustriessuchasecotourism,eco-agriculture,marineindustry,seniorcareindustry,businessservices,finance,conventionandexhibitionindustry,biopharmaceuticalindustry,andinformationindustry.Itisnotsuitabletodevelopindustriesthatarelikelytoexertsignificantpressureontheecologicalenvironment,suchasre-exports,roughmachining,andheavychemicalindustries.Atthisstage,Hainan鈥檚economylargelyreliesontheserviceindustry.In2017,Hainan鈥檚serviceindustrycontributed79.5percenttoitseconomicgrowth.
The11pilotfreetradezonespreviouslyapprovedbytheStateCouncilonlycoverabout120squarekilometersrespectively,andthelimitedarearestrictsthedevelopmentofecotourismandeco-agriculture;however,itisnotaprobleminHainan.ManyindustriesinHainanwillhaveenoughspacetogrow.Itisnotdifficulttoseethattheabove-mentionedindustrylayoutcanhelpHainanbetterdisplayitsstrengthsandavoidweaknessesinthecourseofeconomicdevelopment.The12thTouroftheHainanInternationalRoadCyclingRacein2017.Asforhowtomakebestuseoftheadvantagesandbypassthedisadvantages,Chinamustcombinetop-leveldesignwithadvancingcautiously.SomeoftheplansincludeguidingHainantoacceleratethereformofurban-ruralintegrativedevelopment,talentcultivation,fiscalandfinancialsystems,incomedistributionsystems,andstate-ownedenterprises;supportingHainaninestablishingtradingvenuesofenergyproducts,shipping,bulkcommodity,propertyrights,equity,andcarbonemissions;activelydevelopinganewgenerationofinformationtechnologyanddigitaleconomy,soastopromotethedeepintegrationoftheInternet,InternetofThings,bigdata,satellitenavigation,andartificialintelligencewiththerealeconomy;supportingHainaninlayingoutanumberofmajorscientificresearchinfrastructureandplatforms,andestablishingademonstrationzoneforinternationaloffshoreinnovationandentrepreneurship;acceleratingtheinnovationanddevelopmentofservicetrade,toformanindustrialstructurebasedonaservice-orientedeconomy;implementingamoreopenandconvenientpolicyforoffshoreduty-freeshopping,andpromotingthedevelopmentoftourism;establishingamanagementsystemthatwillbetterattractforeignhigh-techtalents,andsoon.
Inaddition,Hainancandevelopmoderntourism,buildingitselfintoanationalpark,whichwillbeanideallocationfordevelopingthehealthcareindustryandtherehabilitationindustrytogeneratemoreprofits.Intermsofagriculture,theentireislandhasatropicalagriculture,solarge-scalecultivationandoffseasonvegetablecultivationcanbedeveloped.TheHainangovernmentmustpaymoreattentiontothedevelopmentofhigh-endmanufacturingandmodernserviceindustries.ThisrequiresHainantoemphasizethecomprehensivedevelopmentofhumanresources,andfullyinspirevitalityandcreativityofthepeople,sotocreateahigher-level,openeconomy.
Besides,Hainan鈥檚constructionofafreetradepilotzoneandthegradualexplorationoftheconstructionofafreetradeportwillneedtoovercomesomeproblems.AtthebeginningoftheestablishmentofHainanSpecialEconomicZone,italsoexperiencedthepropertybubble.Inthefuture,theconstructionofpilotfreetradezoneandportwillsurelybringmoredevelopmentopportunitiestotherealestateindustryinHainan.However,thedevelopmentopportunitiesintherealestateindustrydonotequaltoanewroundofrealestatespeculation.Hainan鈥檚realestatedevelopmentshouldbecombinedwiththedevelopmentofthetourismandseniorcareindustries.Inaddition,Hainanisaplacewithasuperiorecologicalenvironment.Itseconomicdevelopmentmustbebasedontheprotectionoftheenvironment.Inthissense,someindustrieswithhighenergyconsumptionandhighpollutionshouldbestrictlyregulatedorevenbanned.Althoughsomefieldsdonotfallwithinthescopeofnegativelists,theregioncanalsoraisebarrierstoentrybyimplementingmorestringentenvironmentalprotectionlawsandregulations.
GeneratingNewDividends
Ofcourse,therelationshipbetweenHainan鈥檚dosanddon鈥檛sinbuildingthepilotfreetradezoneandexploringtheestablishmentofthefreetradeportisnotabsolutelyimmutable.Forexample,thedevelopmentofthefinancialindustryinHainanshouldproceedstepbystep.Atthestageofconstructionofthepilotzoneforfreetrade,theconstructionofvarioustypesoftradingvenuesshouldbebasedonthescopeoftherealeconomy,andshouldnotberushedtocarryoutoffshoretradeandoffshorefinancialservices.Withthecompletionofafreetradeport,thedevelopmentofoffshoretradeandoffshorefinancialserviceswillbecomenecessary.Intermsofoffshoretradeandoffshorefinance,freetradeportshavemoreadvantagesthanfreetradezones.TheHainangovernmentshouldfirmlygrasptheopportunities,includingimprovinginfrastructure,settingfootontourism,providingvisa-freeentryandlandingvisa,andboostingoffshoreduty-freeshopping.Thegeneralre-exporttrade,whichinvolvessimpleprocessing,as-sembly,andmanufacturing,isnotsuitableinHainan,becausethecostforecologicalrestorationwillbetoohigh.Chinawantstheislandtoseekecologicallysustainabledevelopment,takingadvantageofitsgeographicalfeaturestodeveloptourismconsumption,eco-agriculture,andhealthcareandseniorcareindustries.
ComparedwithHongKongandSingapore,Hainanhasauniqueadvantage.Asportcities,HongKongandSingaporecanonlyplaytheirroleasashippingcenter,financialcenter,andtradecentertodeveloptransittrade.Hainancoversanareaof35,000squarekilometers.Thislargeareaenablesittoexploredevelopmentthatotherfreeportsandfreetradeareashavefailedtoexplore.
Theconstructionofthepilotfreetradezone,andtheexplorationofthefreetradeportcanbedescribedasagoldenopportunityforthedevelopmentofHainan.Tograspsuchahistoricalopportunitynotonlyrequirescouragebutalsowisdom.TheguidelinesonsupportingHainantodeepenreformandopening-upemphasizethebalancebetweendelegatingpowerandstrengtheningregulation,sotobettercarryoutopening-upandreducetheprobabilityoffailure.Hainan鈥檚comprehensivedeepeningofreformandopening-uphasmanyhighlights,includingtheconstructionofamoderneconomicsystem,theconstructionofaninternationaltourismisland,thepromotionofecologicallysustainabledevelopment,andtheimprovementofthetalentdevelopmentsystem.Ifcloselyintegratedwiththesehighlights,constructionofthefreetradezoneandexplorationofthefreetradeportinHainanwillbemoreeasilycarriedout.
Atpresent,somepeopleareworriedthatChina鈥檚attitudetowardopening-upwillbeshaken.ChinahasmadeitsattitudecleartotheworldbyestablishingHainanasapilotfreetradezone.ThismeansthatChina鈥檚doortotheworldwillnotbeclosedbutcontinuetoopenwider.Asafreetradezoneandspecialeconomiczone,thenewdevelopmentofHainanwillgeneratemoredividendsinthefuture.
BAIMINGisdeputydirectoroftheDepartmentofInternationalMarketResearchattheChineseAcademyofInternationalTradeandEconomicCooperationundertheMinistryofCommerce.