Hainan Free Trade Port

  China News Weekly Reporter/Jiang Xuan

  Issued in the 952th issue of "China News Weekly"

  On June 1, the day the "Overall Plan for the Construction of Hainan Free Trade Port" (hereinafter referred to as the "Overall Plan") was announced, a ship registration system in the Hainan Free Trade Port Policy was implemented simultaneously. The Hainan Maritime Safety Administration issued a "Certificate of Nationality for Ships" to a pulp carrier under COSCO Shipping, and "COSCO Shipping Prosperity" became the first cargo ship registered with "China's Yangpu Port" as the home port.

  In the "Overall Plan", a number of policy advances and stress tests, including the construction of the "China Yangpu Port" international registry port, all fell into the Yangpu Economic Development Zone in Hainan's established park. "In addition to the generally applicable policies across the island, there are 7 separate mentions of Yangpu, mainly 1 free trade policy and 4 shipping policies." Chi Xueyong, deputy director of the Yangpu Working Committee Office, was interviewed by China News Weekly It was revealed that in order to promote the implementation of the gold-bearing policy, Yangpu is cooperating with provincial departments and bureaus to connect with relevant national ministries and commissions.

  Key parks as engines

  In terms of the division of labor in the construction of the free trade port, the key parks are model areas and test areas for the construction of the free trade port, and jointly carry the task of policy "early arrangement". Chi Xueyong counted several Yangpu Free Trade Port policies that are being implemented, including the registration of the "China Yangpu Port" registry port, the addition of bonded fuel oil for ships on the same ship for domestic and foreign trade, export tax rebates for ships built in international transportation, and The tax rebate policy at the port of departure, the first to implement the “first-line” liberalization and “second-line” controlled import and export management systems in the Yangpu Bonded Port Area, etc.

  Focusing on the three leading industries of tourism, modern service industry and high-tech industry, the parks in Hainan have differentiated positioning, each focusing on incubating key industries. Judging from the 11 key parks simultaneously listed on the Hainan Free Trade Port on June 3, Yangpu focuses on the development of the oil and gas industry, the development of the headquarters economy in the Jiangdong New Area of ​​Haikou, the development of medical tourism in Boao Lecheng, and the development of international aerospace in Wenchang.

  Comparing the experience of more successful free ports in Singapore and Hong Kong, Hainan Free Trade Port differs in its industrial content and development priorities. The construction of Hainan Free Trade Port does not focus on re-export trade and processing and manufacturing, but is dominated by tourism, modern services and high-tech industries. This is both a breakthrough and an unprecedented challenge.

  "Hainan's choice has its inevitability." Wang Xinkui, director of the Shanghai WTO Affairs Advisory Center, analyzed in an interview with China News Weekly. On the one hand, the current global value chain revolution, which is based on hierarchical production and task trade, has stalled Trends, Hainan's own basic conditions such as labor, land, and natural environment, do not allow the development of large-scale export processing trade; on the other hand, China will gradually form a new development that takes the domestic major cycle as the main body and promotes the domestic and international dual cycles. Pattern, the construction of Hainan Free Trade Port must also consider how to rely on the domestic market.

  Xu Hongcai, deputy director of the Economic Policy Committee of the China Association for Policy Research, observed Hainan’s breakthrough in industrial upgrading, but he was concerned that “some traditional investment promotion methods do not have advantages in Hainan at present, making it difficult to form attractive, Come to a good project. For example, traditional parks are widely distributed throughout the country. How clear is Hainan’s advantage? Especially when the external environment becomes more complicated, it is more difficult to attract park investment."

  Select the correct breakthrough and promote legislation

  According to the latest data in 2019, after excluding real estate, Hainan has established 12 key industries including Internet, tourism, low-carbon manufacturing, medical health, tropical characteristic and efficient agriculture, modern financial services, convention and exhibition, oil and gas industries, etc. The contribution rate has reached 65%.

  After the publication of the "Overall Plan", Hainan directly upgraded to a free trade port on the basis of the whole island as a free trade zone, which brought better opportunities for Hainan to enhance international openness and industry display. Zero tariffs, low tax rates, customs clearance operations, freedom of trade, freedom of movement of people and other policy arrangements, the supervision model adheres to the "first-line liberalization, second-line control", compared to the free trade zone that has been widely carried out nationwide, The Hainan Free Trade Port puts more emphasis on freedom within the island, and is closer to the essence of the Free Trade Port inside and outside the customs.

  "At this stage, the core focus is on two policies, one is the exemption of tariffs and surcharges on imported products, and the corresponding rules of origin; the other is the "double low tax rate", that is, Hainan’s treatment of qualified enterprises and individuals, The upper limit of the income tax rate is set at 15%." Wang Xinkui explained the institutional arrangements first made by Hainan at this stage from two aspects.

  The selection of key industries and breakthroughs is related to whether Hainan can establish a comparative advantage on the new starting point of benchmarking international free trade standards. "No real estate processing factory" "not allowed to smuggle through goods trade" "not engaged in pornographic gambling", Liu Cigui, secretary of the Hainan Provincial Party Committee, has identified several red lines for Hainan to build a modern industrial system. Since 1980, the central government has clearly decided to "relax policies and invigorate the economy" on Hainan Island. Since then, it has gone through "quasi-special zone", "special zone" and then built an international tourist island. The development of Hainan has experienced several ups and downs. There are also historical lessons mentioned by Liu Cigui.

  According to the arrangements in the "Overall Plan", the policy around the free trade port is a complete, scientific and efficient system, which includes the management system, laws and regulations. Before completing the long-term project of building a policy and institutional framework for the construction of the Hainan Free Trade Port, various institutional innovations in Hainan need to "mature one and promote one." In the long run, breakthroughs in the legislation of free trade ports are crucial. While the "Overall Plan" has attracted various industries to rush to Hainan, all parties look forward to the introduction of more specific and longer-term stable policy implementation rules.

  Wang Xinkui analyzed the opportunity of independent legislation in the free trade port and said, "According to the provisions of the current constitution, there is no independent legislative power in the place. The free trade pilot zone is a national chess game, and the experience explored can be copied and promoted. There is no such requirement for construction, and Hainan must have major innovations in system reforms, and it must pass legislation to give greater reform autonomy."

  In fact, regardless of the exploration of free trade zones and free trade ports, this kind of "first-ahead dilemma" is faced, and it is necessary to break through the existing laws, regulations and institutional mechanisms that restrict high-level opening.

  On April 26 this year, the 17th meeting of the Standing Committee of the 13th National People's Congress reviewed the draft decision and proposed to authorize the State Council to temporarily adjust the implementation of relevant laws in the Hainan Free Trade Zone, which will involve cruise ship management, land acquisition, and seed import and export. Delegating the relevant authority to the Hainan Free Trade Zone is regarded as the icebreaking road for free trade port legislation.

  Chi Fulin, president of China Hainan Reform and Development Research Institute, also recently called for Hainan to be authorized as soon as possible to formulate relevant regulations for free trade ports and to speed up the introduction of the Hainan Free Trade Port Law. "This is to fully learn from the advanced management methods, management methods and institutional arrangements of international free trade ports."

  China News Weekly No. 22, 2020

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