China has released a master plan for the Hainan free port that aims to build the southern island province into a globally influential duty-free trading center by the middle of the century.
A trade port system focusing on trade and investment liberalization and facilitation will be “basically established” in Hainan by 2025 and become “more mature” by 2035, according to the plan jointly issued by the Central Committee of the Communist Party of China and the State Council.
The decision to develop the entire island of Hainan into a pilot free trade port was announced by Chinese President Xi Jinping during a visit to the island in April 2018. Recently, President Xi has underlined the importance of high quality and high standards of the construction in the Hainan free trade port, while prioritizing the innovation of institutional integration in the process of building the port.
The president said institutional integration will be prioritized to free people’s minds to make bold innovations and ensure sustainable progress. He urged the local government of Hainan to act boldly and proactively to accomplish the goal of laying a solid foundation for the construction of the Hainan free trade port, while the central government should support Hainan’s daring reforms and innovation, pushing for new achievements in the construction of the port.
The plan aims to facilitate free trade, investment and cross-border capital flows in Hainan and says designated imported goods will be exempted from tariffs on the whole island.
It lists plenty of work emphasis in periods stretching to 2035. Among dozens of policies in the plan, the following are the ones seen as taking lead in the free trade port:
Innovative management on import-export
The plan says Hainan will establish more special custom supervision regions to help the island implement more flexible import-export management.
The island will be built as a convenient and efficient “single window” while dealing with imports and exports with overseas countries.
Hainan will pull out a list of goods and articles prohibited and restricted from import and export by the port, while the goods and articles outside the list shall enter and exit freely .
Additionally, a catalog of imported taxable commodities will also be formulated, but goods outside the catalog will be exempted from import duties when entering the free trade port.
Reduce limitations on cross-border services trade
In the key areas, Hainan will take the lead in regulating domestic rules that affect the freedom and convenience of the services trade.
The port will formulate and issue negative lists of the cross-border services trade to treat overseas service providers with national treatment, and remove various barriers existing in services trade modes such as cross-border delivery, overseas consumption and movement of natural persons, and grant national treatment to overseas service providers.
Meanwhile, the plan stressed the need to carry out system innovations in the areas of intellectual property transfer, utilization, and taxation policies, and standardize the exploration of intellectual property securitization, by building the Hainan International Intellectual Property Exchange.
Widen the opening-up of the finance sector
The plan says Hainan is to take the lead in implementing the policy of expanding the opening of the financial industry, by supporting the construction of international energy, shipping, property rights, equity, and other trading venues and speeding up the development of settlement centers.
In addition, Hainan will support qualified overseas securities fund and futures institutions to set up wholly-owned or joint venture financial institutions on the island.
It will also support financial institutions that innovate financial products and improve service quality and efficiency, based on the development needs of key provincial industries such as tourism, modern services, and high-tech industries.
Moreover, in an effort to boost foreign investment, China will implement a minimal approval process on investment by making special lists for relaxing barriers to market access for the Hainan free trade port and negative lists for foreign investment market access.
The supervision system will be based on credit supervision and compatible with negative lists management.