Hainan aims to build a free trade pilot zone by 2020

Experts from a major economic think tank say the construction of the Hainan free trade zone will further boost China's reform and opening up.

In October 2018, China rolled out a plan for establishing Hainan as a pilot free trade zone, the 12th of its kind and the largest among its peers.

The plan is to build a high-standard free trade zone by 2020 in the southern Chinese island province.

According to experts from the China Center for International Economic Exchanges, Hainan's ambition to set up a free trade port will face several hurdles, such as relatively weak economic foundation, an unsophisticated industrial structure and an immature market.

Aerial photo taken on March 15, 2018 shows coastal scenery of Boao Town in south China's Hainan Province. [Photo:Xinhua]

The center's chief researcher Zhang Yansheng suggests the island should learn how to seize opportunities amid challenges.

"We should work with first-class universities and talents, as well as top-tier innovative enterprises not only from China, but also from the rest of the world. Domestically speaking, Hainan should position itself as a competitor of Shanghai and Hong Kong, to develop modern services, tourism, health care, environmental protection and high-tech industries."

Generally speaking, free trade ports usually feature free flow of goods, capital, personnel and service. They are also endowed with a competitive tax mechanism and an efficient legal system.

Because of this, Li Jinbo from the center's industrial planning department says Hainan should be a pioneer in key areas, such as institutional arrangements and governance structure.

"In terms of people flow, foreigners should get the visa upon their arrivals if they come to Hainan for travel or business; detailed regulations should also be in place to facilitate them if they work or live there. In terms of capital, we should establish the mechanism for enterprises' bankruptcy liquidation and restructuring as well as exit strategy. What's more, we should take a lead in deepening the reform of judicial system in the field of intellectual property rights."

Li Feng, an industrial planning researcher, suggested that Hainan Free Trade Port should establish an investment system focusing on high-quality development and a financial system focusing on cross-border finance.

"We should implement the highest standard of market access, and abolish the access restrictions for foreign investment in industries such as finance, environmental protection, transportation, and shipping. At the same time, we should simplify the business registration procedures, and establish a sound financial supervision and risk prevention mechanism."

As part of the free trade zone development plan, Hainan will also try to become China's gateway to the Pacific Ocean and Indian Ocean, and a trailblazer in ecological civilization and international tourism.