The fifth anniversary of the construction of the Hainan Free Trade Port: a new highland for China's opening up to the outside world

Haikou, 4 Apr (ZXS) -- Topic: The fifth anniversary of the construction of the Hainan Free Trade Port: A new highland for China's opening up to the outside world

China News Agency reporter Wang Ziqian

In April 2018, China announced its support for the construction of a pilot free trade zone on the entire island of Hainan, and supported Hainan's gradual exploration and steady advancement of the construction of a free trade port with Chinese characteristics. Hainan's comprehensive deepening of reform and opening up has begun. Over the past five years, the construction of Hainan Free Trade Port has changed from "smooth start" to "vigorous development" to "obvious progress" and then to "vigorous rise", focusing on building a new highland of China's new round of high-level opening up.

"The key core policies of the free trade port have begun to show results." According to Ni Qiang, Vice Governor of Hainan Province, more than 180 policy documents of Hainan Free Trade Port with "zero tariff, low tax rate, simplified tax system" and "trade and investment liberalization and facilitation" as the core have come into effect, and the "two 15%" income tax preferential policies and three "zero tariff" lists have been implemented in an orderly manner.

By the end of 2022, Hainan had imported a total of 149.6 billion yuan (RMB, the same below) of "zero tariff" goods, with tax relief of 26.5 billion yuan, processing value-added domestic sales value of 28.5 billion yuan, and duty-free 2 million yuan. In the past five years, the scale of trade in goods and services has increased by 5.1 times and 8.1 times respectively, and 2,4798 foreign-invested enterprises have been established, and the actual use of foreign capital has exceeded the total of the previous 30 years. As of February 2023, the growth rate of Hainan's business entities ranked first in China for 2 consecutive months.

Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges, noted that the construction of the Hainan Free Trade Port has made significant progress around key tasks, and a new model of high-quality development has been explored in the process of opening up. Hainan's four leading industries – tourism, modern services, high-tech industries, and high-efficiency agriculture with tropical characteristics account for 70% of Hainan's GDP. The three major overseas consumption of high-end shopping, medical care and education have returned significantly, of which the duty-free sales of outlying islands have exceeded 1300 billion yuan in five years.

Optimizing the business environment is the support for high-level opening-up. With the promulgation and implementation of the Hainan Free Trade Port Law of the People's Republic of China, Hainan has promulgated and implemented more than 40 regulations and important policies related to the business environment. Hainan established China's first business environment construction department to coordinate and promote business environment and government services.

Sang Baichuan, dean of the Institute of International Economics of the University of International Business and Economics, believes that a good business environment and a highly developed, free and convenient open economic system and system will promote the connection between the Hainan Free Trade Port and the external market.

"It depends on both the growth rate and the total amount." Zhang Yong, deputy director of Shanghai Finance and Development Laboratory and chief expert and president of the Silk Road Research Institute (Haikou), reminded that the Hainan Free Trade Port has made remarkable progress in the introduction of foreign investment, offshore island duty-free, and the implementation of the home port policy, but the development potential in the fields of trade in goods and services still needs to be further explored, and the accuracy and coverage of the implementation of policies such as "zero tariff" and "two 15%" should be further improved.

In the construction of Hainan Free Trade Port, customs sealing is an important node. Hainan has fully launched preparations for the island-wide customs closure operation in accordance with the schedule of "having the hardware conditions by the end of 2023, completing all preparations for the customs closure by the end of 2024, and realizing the island-wide customs closure operation by the end of 2025".

"After the closure of the whole island, Hainan's export-oriented economy will achieve further development." Huang Yin, EY South China Managing Partner, told China News Agency that by aligning with international high-standard economic and trade rules such as the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Digital Economy Partnership Agreement (DEPA), Hainan will fully learn from international experience in laws and regulations, fiscal and taxation systems, business environment and social governance, and continue to activate market vitality.

Compared with five years ago, the global political and economic situation has undergone profound changes, and uncertainty has become prominent. How can Hainan further promote the development of a higher-level and higher-level open economy?

Zhang Yong believes that the Hainan Free Trade Port should actively adapt to changes in the external environment, and explore the realization of maximum freedom and convenience under the policy framework of "zero tariff, low tax rate and simplified tax system" and under the physical framework of "island-wide customs closure operation".

Xu Jianpeng, deputy director of the Office of the Hainan Provincial Committee of the Communist Party of China for Comprehensive Deepening Reform (Free Trade Port Work Committee Office), said that the key policies of the free trade port will change after the island-wide customs closure. For example, in the field of trade liberalization and facilitation, the "zero tariff" list policy arranged earlier will be replaced by the list of goods and articles prohibited and restricted from import and export by the Hainan Free Trade Port, and the list of imported commodities taxed, and the goods and items not included in the restricted list will be freely imported and exported, and all imported goods outside the tariff list will be exempted from import tariffs. With the implementation of the negative list system for cross-border trade in services, all types of cross-border trade in services will be more free and convenient. (End)