Data shows Hainan on track to become consumer-fueled free trade port: white paper
A national push to build a free trade port (FTP) with Chinese characteristics in the tropical island of Hainan has made remarkable progress over the past year, with increased facilitation of trade, investment, flows cross-border capital, among other areas, according to an official FTP construction white paper released Friday.
As part of efforts to build on the strategic momentum, the island province has rebalanced its economy from reliance on the real estate sector towards consumption, according to the white paper released at the second China International Consumer Products Expo (CICPE) in Haikou, capital of Hainan province in southern China.
The white paper, the second of its kind, was compiled by the FTP working committee of Hainan province.
A number of key policies have been implemented since a master plan for the construction of the Hainan FTP was unveiled by the State Council, the country’s cabinet, in June 2020. Among the policies were imports of production equipment for personal use eligible for zero tariffs which are subject to negative list management, transport vehicles and yachts being exempt from tariffs which fall under a positive list, and yet another positive list for the management of raw and auxiliary materials benefiting from zero rights.
By May, imports under the categories of these zero tariff policies had already reached 9.89 billion yuan ($1.47 billion), according to the white paper which described the progress of CTF between June 2021 and this May.
In a sign of streamlining regulatory procedures for international trade, customs clearance for imports through Hainan Port stood at 35:15 a.m. in May, 21.28 hours less than the national average. Customs clearance of exported goods was also shortened from 0.74 hours to an average of 0.57 hours.
Last year, the island’s merchandise imports and exports totaled 147.68 billion yuan, an increase of 57.7% over the previous year, or 36.3 percentage points higher than the national average.
In the first five months of the year, the island’s merchandise trade rose 61.4 percent year on year to 74.57 billion yuan.
The island has also made progress in improving the protection of intellectual property rights and fair competition. In 2021, the province granted 13,632 patents, an increase of 58.9% over the previous year. Fair competition rules in the Hainan FTP were approved at the end of September 2021 and entered into force on January 1, according to which the first fair competition committee was established in the domestic market.
Such incentives apparently bode well for companies seeking growth opportunities in the wake of FTP.
In May, newly established market entities in the province stood at 1.09 million, according to the white paper, and its actual use of foreign investment soared 80.6 percent year-on-year to 1.44. billion in the first five months.
Friday’s paper also sketched FTP’s progress in financial openness, globalization of various clearinghouses in the province, cross-border capital flows, transport connectivity, people flows and secure data flows. .
Hainan occupies a unique geographical position, connecting the South China Sea trade passage and serving as a strategic hub in the Belt and Road Initiative (BRI). The construction of the Hainan CTF helps foster regional cooperation within the framework of the BRI as well as push the liberalization of trade and investment in China and further open the domestic market to the outside world, said Jennifer Ye, head of Mainland China consumer markets at PwC, Global Times. outside the CICPE.
The island province is poised to facilitate access to the service sector for foreign investment, as it aims to be mainly focused on tourism, modern services and high-tech industries, Ye said, expecting that these sectors seize new development opportunities and therefore channel advanced technologies. , high-quality experiences and talents in Hainan.
Having bid farewell to a long-term dependence on the real estate sector, the economy of the island province has now based its quality development on four major industries – tourism, modern services, high technology and high-yield tropical agriculture, the white says the paper.
Last year, tourism revenue increased by 31% compared to 2019 before COVID-19, the document revealed, noting that consumption has become the main driver of local economic growth.
The island’s duty-free stores recorded 60.17 billion yuan in total sales, including taxes paid, in 2021, up 84% year-on-year, according to a separate white paper on the travel retail market. in Hainan published jointly by KPMG and the Moodie Davitt report. at the consumer show on Tuesday.
“Hainan stands out among global travel retail destinations with a series of innovative institutional measures improving the business environment,” the document said.
The Moodie Davitt Report, a London-based business intelligence service, estimated that “Hainan is on track to become the world’s largest duty-free market over the next five years.”