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Hainan FTP set to emerge as a strong investment destination

Xinhua | Updated: 2021-04-22 09:41
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A vehicle enters the Hainan Free Trade Port's Lingshui Li'an International Education Innovation Pilot Zone in Lingshui, Hainan province, on April 5. [Photo/Xinhua]

HAIKOU-Construction of the Free Trade Port in Hainan got a new impetus after companies signed agreements for 104 projects in the region recently.

The projects, 22 of which are foreign-funded, involve 65.72 billion yuan ($10.06 billion) in total investments and cover tourism, modern services and high-tech industries.

The deals, signed in Haikou, Hainan's capital, also reflect the increasing appeal of the island province amid China's ongoing opening up to investors.

Previously, the FTP had seen the signing of 741 projects with an investment of 519.6 billion yuan in multiple areas including intelligent manufacturing, international shipping, education, medical care and aerospace.

China proposed setting up a free trade zone in Hainan in 2018 and began construction of the Hainan FTP last year. Over the past three years, a number of foreign companies have settled in Hainan, including Harrow School from Britain, US electric automaker Tesla and tourism company TUI Group.

Cambodia Angkor Air inked a deal on Tuesday to operate 10 planes in Haikou and establish a base there.

David Zhan, board director of the company, said they hoped to benefit from the Seventh Freedom of the Air and fly from Haikou to major cities in Northeast Asia, Russia and ASEAN.

The Hainan FTP last year began to trial the Seventh Freedom of the Air, which allows foreign carriers to operate flights between two foreign countries without the need to touch down in the airline's home country.

Investment magnet

Defying the economic headwinds brought by the pandemic, Hainan FTP has forged ahead with a steady inflow of investment.

Authorities said that last year Hainan launched 538 projects involving investment of 172.5 billion yuan.

"The construction of these projects is of great significance to develop Hainan's modern industries, narrow the gap in infrastructure and public services and boost confidence in FTP construction," said Qi Hongchao, an official with the Hainan Development and Reform Commission.

Meanwhile, the province unveiled 11 key industrial parks in June last year, where favorable FTP policies have been implemented to attract investment projects. Statistics showed that over 20,000 new enterprises were registered in these industrial parks last year.

Hainan FTP has become a strong magnet for foreign investment as Hainan accelerates opening up against the backdrop of the global economic slowdown and shrinking foreign direct investment due to the pandemic, said Peng Wei, deputy director of Hainan's Department of Commerce.

In 2020, 1,005 overseas-funded enterprises set up operations in Hainan, up 197.3 percent from the previous year, according to the department.

The booming duty-free shopping sector is another FTP attraction for global brands wishing to explore China's huge market.

The first China International Consumer Products Expo, scheduled for Haikou in May, has attracted more than 1,100 international brands, including L'Oreal, Shiseido and Tesla.

After 2025, the entire island could become duty-free and become a mecca for duty-free shopping and tourism, said Han Shengjian, director of the Hainan Bureau of International Economic Development, adding that "these international brands are preparing for future opportunities in Hainan FTP".

Starting July 1, 2020, Hainan increased its annual tax-free shopping quota from 30,000 yuan to 100,000 yuan per person. The categories of duty-free goods have been expanded from 38 to 45, with electronic products such as mobile phones and laptops added to the duty-free list.

Five more shops opened in Sanya and Haikou in December and January, bringing the total number of duty-free shops in Hainan to nine.

"With the expo, Hainan will become the largest luxury consumption center in China and even the world," said Chi Fulin, president of the Hainan-based China Institute for Reform and Development.

China recently issued a guideline to support easing market access in Hainan in its latest effort to speed up Hainan FTP construction.

The guideline detailed measures to innovate market access in the pharmaceutical and health sectors, optimize financial market entries and the development environment and promote wider entries in the fields of culture and education.

Hainan has great potential in the development of the modern service industry, especially in finance, medicine and healthcare, education and luxury consumption, said Chi, adding that Hainan FTP will play a more important role in China's reform and opening-up and carry out both international and domestic circulation.

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