China’s Hainan tries to put aside past failures as it forges ahead with new free-trade port plan

Hainan’s offshore duty-free sales have surged over the past year and companies are rushing to set up shop on the island

But earlier plans to transform the island’s economy failed to meet expectations, leaving some locals taking a wait-and-see approach

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Beijing plans to turn Hainan, a popular holiday destination sometimes referred to as China’s Hawaii, into the nation’s largest free-trade zone. Illustration: Lau Ka-kuen

Published: 7:15am, 5 May 2021Updated: 4:59pm, 5 May 2021

On a muggy workday afternoon in April, dozens of businessmen streamed into a government service centre in Hainan’s Jiangdong New Area, an urban zone about 20km east of downtown Haikou, the island’s capital.

Clutching business licenses, they besieged staff with questions about how to establish operations in the industrial estate. Though the area is pockmarked with abandoned construction sites – some strewn with concrete fragments and steel rebar jutting into the air – rapid development is on the horizon.

Thirty years ago, the land beneath their feet was slated to be a horse racing track, but today it is central to Beijing’s plan to turn the tropical island into a free-trade port that could one day rival Singapore or Hong Kong.

“Changes are taking place. There are more and more companies coming to register in Hainan recently,” said Wang Jing, chairman of a construction supervision company in Haikou. “Hainan has wanted to take off in development so many times in the past, but the final results were not very good.”

President Xi Jinping announced in 2018 that the island, a popular holiday destination sometimes referred to as China’s Hawaii, would be made into the nation’s largest free-trade zone. But it was not until June last year that more details were unveiled.

The 35,000 sq km island would be turned into a “free-trade port” and duty-free shopping mecca by lowering taxes, relaxing visa requirements and loosening restrictions on capital flows and data by 2035, the government said.