President Xi Jinping has announced that the southern island province of Hainan will become host to China’s first “international free trade port”, as part of efforts to further drive economic reform and opening.
At a meeting to commemorate the 30th anniversary of the establishment of Hainan province and the Hainan Special Economic Zone, Xi said that the entire island will be transformed into a free trade zone, with plans for the construction its own free trade port.
“Here I solemnly announce that the Communist Party of China Central Committee has decided to support Hainan in developing the whole island into a pilot free trade zone, and gradually exploring and steadily promoting the establishment of a free trade port with Chinese characteristics,” said Xi according to Xinhua.
Xi also flagged support for the establishment of exchanges in Hainan for international energy and shipping commodities.
As part of efforts to transform Hainan into a pilot free trade zone, the province will have greater autonomy to pursue reform policies, and implement high-level policies to liberalise and facilitate trade and investment.
The province will engage in the “step by step and stage by stage” development of policies and institutional systems for the creation of a free trade port, which will serve to enhance cooperation with countries participating in the Belt and Road initiative.
Key sectors for Hainan’s future development will include medical treatment, education, sport, telecommunications, tourism, modern services and the hi-tech sector.
Xi said that Hainan province should focus on the development of these sectors, instead of serving as a trade and manufacturing intermediary.
CCTV points out that while China is host to a large number of free trade zones, it currently has no free trade ports, in the sense of a port where overseas goods, capital as well as sea and air vessels are permitted to enter and leave freely.
Observers say that a free trade port is considered the most open form of free trade pilot zone, facilitating the development of regional trade hubs.
Bai Ming (白明), vice head of the Ministry of Commerce International Market Research Institute, said that exploring the development of a free trade port on the foundations of a pilot free trade zone will further drive a new round of high-level opening, especially with respect to the financial and services sectors.
In March 2017 the State Council proposed the establishment of a free trade port within Shanghai’s Yanshan Duty Free Port Zone (上海的洋山保税港区) or the Shanghai Pudong Airport Duty Free Zone (上海浦东机场综合保税区).
Xi Jinping flagged further commitment to opening and reform at the recent Boao Forum for Asia, while central bank governor Yi Gang outlined a slew of new measures to further drive the opening of the financial sector, chief amongst the removal of caps on the foreign ownership of domestic financial institutions.