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Hainan charts plans to further attract businesses

By MA ZHIPING in Haikou | China Daily | Updated: 2021-08-25 09:04
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Shoppers browse cosmetics at a duty-free store in Haikou, Hainan province, in April. [Photo/Xinhua]

The Hainan Free Trade Port will grant market access to firms based on a prior commitment, according to the local provincial authorities. The move is set to reduce business barriers and further boost market vitality.

A newly drafted regulation on the administration of the Hainan FTP market access based on commitment said that, apart from areas relating to national security, social stability, ecological and environmental security and major public interests where the State implements access management, licenses and approvals will be canceled for business areas related to health, life and property safety and meet the basic needs of economic and social management-fields that practice mandatory standard management.

Commercial entities can begin investing and launching business activities after promising to meet relevant requirements and submitting relevant materials for filing, according to the regulation, which is currently soliciting public opinions. A supervisory system will be established to supervise and prevent possible risks from businesses that base their market entry on commitments.

Market access of foreign investment can also be referred to the new rule.

Local officials said granting market access based on commitment was an important measure to facilitate free investment put forward by the overall plan for the construction of the Hainan Free Trade Port, released by the central authorities on June 1, 2020. According to the master plan, China will build the entire Hainan Island-about 32 times the size of Hong Kong-into a globally influential and high-level free trade port by the middle of the century.

"The market economy is a kind of trust economy. The goodwill assumption that commitment means access will greatly stimulate market vitality," said Kuang Xianming, director of the economic research center at the Haikou-based China Institute for Reform and Development, a leading think tank on the nation's reform and opening-up.

Kuang said the new regulation is an important institutional innovation to improve the business environment, but effectively supervising market entities to avoid relevant risks will be a new issue of concern and a test of the government's abilities.

China has rolled out a slew of measures to facilitate the free flow of key production factors and further relax market access in the past three years in the Hainan FTP, showing the country's drive to further open up to the outside world.

Fueled by preferential government policies, the actual use of foreign investment in Hainan totaled about $3 billion last year, doubling from $1.5 billion in 2019.From January to June, 979 foreign funded companies were established in Hainan, an increase of about 385 percent over a year earlier. The actual use of foreign investment during the period surged by 623.6 percent year-on-year to reach $950 million, according to the provincial department of commerce.

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