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Hainan utilizes free trade to expand BRI

By CHEN BOWEN in Haikou | China Daily | Updated: 2023-10-12 09:14
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Shoppers browse cosmetics at a duty-free luxury store in Haikou, Hainan province. [Photo by Su Bikun/For China Daily]

Foreign investment continues to climb on island, with more projects planned

The government of the island province of Hainan in South China has pledged to reinforce its role as a strategic trade hub and take advantage of the opportunities of the Belt and Road Initiative, which this year celebrates its 10th anniversary.

A major factor in Hainan's development has been it turning itself into a free trade port in order to attract foreign investment.

From January to August, the number of newly established BRI member foreign-invested enterprises in Hainan increased by 24.1 percent year-on-year.

Foreign investment access and preferential tax policies are what foreign investors care about, said Bater, vice-governor of Hainan.

Hainan has the lowest number of items on its foreign investment negative list in China, with 27. It also has the lowest tax. In terms of corporate income tax, companies in industries encouraged by Hainan, including tourism, modern service and high-tech, enjoy a preferential corporate income tax rate of 15 percent. High-end talent pays income tax no higher than 15 percent of their gross income.

Enterprises in Hainan also benefit from a preferential policy of the exemption of enterprise income tax on new overseas direct investment.

"With the policy, Hainan supports enterprises to increase overseas investment in Singapore, Indonesia, Malaysia, Vietnam, Cambodia and other Belt and Road partners, covering manufacturing, agriculture, education and other industries, to effectively enhance the links between domestic and international markets and resources," said Bater.

Hainan's investment in countries involved in the BRI continues to increase. From January to August, Hainan added 49 overseas investment projects in those countries. The total foreign trade volume between Hainan and countries involved in the BRI reached 94.4 billion yuan ($12.9 billion), up 62.8 percent year-on-year. In the first eight months of this year, the figure was nearly 71.2 billion yuan, an annual increase of 23.3 percent.

In recent years, countries involved in the BRI accounted for about 80 percent of the total number of Hainan provincial leaders' visits, which deepens bilateral exchanges and cooperation in various fields, said Bater.

Hainan has also made full use of the international exchange platform to deepen exchanges and cooperation with countries involved in the BRI. Hainan has held the Boao Forum for Asia, the China International Consumer Expo and the Hainan Island International Film Festival to build platforms for cooperative research, dialogue and exchange, and information sharing.

"Over the past decade, Hainan has stepped up exchanges and cooperation with countries involved in the BRI in fields including economy, culture and education, and carried out a series of people-to-people projects," said Bater.

The coconut planting demonstration park project signed between Hainan and Pohnpei, the Federated States of Micronesia was included in the outcome list of the second Belt and Road Forum for International Cooperation in 2019.

Since the implementation of the "China Hainan Cambodia Bright Operation" free ophthalmology clinic in July 2016, a total of 3,371 patients have been screened and 701 surgeries have been successfully performed.

Bater said Hainan will strengthen cooperation with Belt and Road partners in various fields, especially Southeast Asian countries. It will strive to build itself into "two headquarters bases" — to build a headquarters base for Chinese enterprises to go international and a headquarters base for foreign enterprises to enter China, an international shipping hub for the New Western Land-Sea Corridor, and a regional international aviation hub for the Pacific Ocean and the Indian Ocean.

Hainan is promoting the China-ASEAN (Hainan) cruise tourism connectivity demonstration project, and strives to open more tourism boutique routes connecting ASEAN countries and regions in the future, he said.

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