Coming soon: Hainan Free Trade Port

Hainan - south and west of Hong Kong. © Google Maps

At the Macau Yacht Show Conference, in December last year, we heard that the Chinese government was going to be paying a lot more attention to Hainan in the near future. The occasion was the Asia-Pacific Yacht Industry High-Level Forum 2019, and the speaker was Hu Xiao-Ming, Vice President of Sanya Yacht Association, promoting Hainan as a new yachting destination, and mentioning that a number of ports were now open to private leisure boating as of June 2019. Further details were not forthcoming. Hu extolled the virtues of Hainan’s unique environmental attributes, and anticipated that they would be a big draw for boat owners. Hainan, he said, and specifically Sanya, is ready to welcome yachts.

It is often tricky in this part of the world to distinguish fluff from fibre, so it is with interest that we report the release on 01 June 2020 of a Master Plan from “Chinese authorities”, aimed at boosting the building of a Hainan Free Trade Port and the development of the whole of Hainan Island as a Free Trade Zone. “A great wave of investment opportunities are on the way,” says Ruslan Tulenov, Supervisor at Hainan Provincial Bureau of International Economic Development. The Overall Plan for the Construction of Hainan Free Trade Port (“the Masterplan”), will make Hainan the largest special economic zone in China.

According to the plan jointly issued by the Central Committee of the Communist Party of China (CPC) and the State Council, “a free trade port system focusing on trade and investment liberalisation and facilitation will be established in Hainan by 2025 and become more mature by 2035.” The province is destined to become a “globally-influential high-level free trade port by the middle of the century.”

There are a great many conditionals. For example, “foreign investment should be allowed in any field not on the prohibition list. For fields with mandatory standards, a filing system should be established, and market players should be allowed to start investment and business activities once they promise to meet relevant requirements and submit relevant materials for record,” and there’s lots more.

Trying to locate the nitty-gritty is hard. The plan is keen to promote “the development of the Hainan Boao Lecheng International Medical Tourism Pilot Zone, and build cultural tourism industrial parks and cruise tourism pilot areas.” Hainan becomes a Duty Free Zone for “fields like consumer goods, cruises and yachts,” and “Hainan will encourage international cruise lines to set up international settlement and operation centres, support yacht companies to set up regional headquarters, and encourage yacht companies to establish research and development (R&D), production, sales, service and maintenance bases in the island.” Cruise ships and yachts are going to be exempt from import duties, import VAT and Consumption Tax, and yacht leasing [charter?] is to be permitted.

First with a hand in the air in Hong Kong is Ferretti Group Asia Pacific, who have signed a strategic Memorandum of Understanding (MOU) with the Sanya Central Business District (SCBD) in support of the continued development of the marine industry in the region. The SCBD is one of the 12 pilot projects in the proposed Hainan Free Trade Zone and Free Trade Ports. Sanya has become one of the few major tropical cities in China where pleasure boating has been considered one of the most attractive leisure activities, and has the potential to be a critical location in the development of yachting in the region. It currently receives more pleasure boats delivered to China than any other Chinese city, and continues to keep the highest growth rate in terms of number of pleasure boats, especially imported yachts. Hopefully, crews in this year’s RHKYC Hong Kong to Hainan Race (starts 23 October) can look forward to breezing through Customs & Immigration upon arrival in Sanya!

There’s lots more, involving everything from low-carbon manufacturing to high-efficiency agriculture, and of course IT and communications.

You can read the whole story here: https://www.moodiedavittreport.com/hainan-free-trade-port-construction-to-bring-wave-of-investment-opportunities/.

There’s also a summary from China Briefing: https://www.china-briefing.com/news/hainan-ftz-masterplan-released-establish-chinas-biggest-free-trade-port-2035/