Chinese President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, speaks with workers at the port of Yangpu International Container Terminal in South China's Hainan Province on April 12, 2022 during his inspection tour to the province. Photo: Xinhua

Four years after China's top leadership announced a resounding decision to build the entire southern island province of Hainan into a pilot free trade port (FTP), the first-of-its-kind in the country with Chinese characteristics, the island with enviable natural surroundings has produced desired results in notably institutional innovations and greener growth, according to the local government on the FTP's fourth anniversary on Wednesday.

Hainan FTP, exemplary of a top-design push for higher-level opening-up and institutional reforms, has been in the limelight, as an inspection tour across the province by President Xi Jinping in recent days flags the significance of the economy's increased focus on a coordinated approach to development and security, experts said.

During his inspection tour of Hainan from Sunday to Wednesday, Xi demanded deeper reform and opening-up across the board, continued innovation-driven development, coordination between COVID-19 response and economic and social development, as well as a balance between development and security, according to Xinhua.

Hainan will become a paradigm of reform and opening-up in the new era, Xi said.

During the trip to the Yangpu economic development zone in Danzhou on Tuesday, Xi visited an exhibition hall and a container terminal, where he learned about the development of the zone. Xi urged efforts to better serve the construction of the new land-sea transit routes for western China and the Belt and Road Initiative.

Describing the island, covering 35,400 square kilometers, as the country's biggest testing ground for addressing institutional weak links, experts are hoping for innovations initially trialed on the island to feed strength into the country's security and indigenousness-oriented economic policymaking. 

Photo taken on April 12, 2022 shows the Wuzhishan section of the Hainan Tropical Rainforest National Park in Wuzhishan, south China's Hainan Province. The Hainan Tropical Rainforest National Park, one of the first group of designated national parks in China, spans nine cities and counties in south China's Hainan Province, covering a total area of over 4,000 square km. It is home to the most concentrated and well-preserved tropical rainforests in China.(Photo: Xinhua)

FTP makes significant headway  

On Wednesday morning, Xi heard work reports from the provincial Party committee and the provincial government, acknowledged the progress made by Hainan and encouraged it to build the free trade port into a shining Chinese model in the world.

Xi said the integrated institutional innovation must be placed in a more prominent position. He called for ensuring the smooth launch of independent customs operation of the free trade port as scheduled.

At a media briefing hosted by the provincial government on Wednesday, a raft of impressive numbers was disclosed, shedding light on progress on the free trade port's reforms.

Over 150 policy announcements have been made for the free trade port, the province's office of deepening reform told the briefing. The push for "integrated institutional innovation" which tops the FTP's agenda has resulted in the setting up of the country's first provincial-level reform and institutional reform prize with 123 institutional innovation cases having been unveiled.

An action plan for the FTP's institutional innovations (2020-22) has thus far been 73.3 percent completed, the Hainan Daily reported on Monday.

A typical example of such innovations is an operation team of an international agricultural technology incubator in Yazhou Bay Science and Technology City in Sanya, local news site hinews.cn reported on Tuesday. With only nine people, the team has introduced and incubated 30 sci-tech firms over merely four months, per the report, citing the local improved business environment in the wake of the institutional innovation push.

Xi visited Sanya on Sunday, where he visited a seed laboratory to learn about seed industry innovation. "To ensure that China's seed resources are self-supporting and under better control, self-reliance must be achieved in seed technology," he said.

The FTP has over the years practiced the mentality that "lucid waters and lush mountains are invaluable assets," per the Wednesday briefing. New-energy vehicle ownership as a part of the province's total car ownership hit 7.2 percent, 4.6 percentage points higher than the national level. The province's clean energy capacity as a percentage of its total installments totaled 70 percent, 23 percentage points higher than the national reading. 

During his visit to a section of a tropical rainforest national park in the city of Wuzhishan on Monday, Xi stressed the importance of boosting national park development in Hainan Province.

The construction of Hainan free trade port is making steady progress in line with the central government's guidance, with a lot of work done in the island in such aspects as implementing zero-tariff policy, reinforcing industrial foundation and carrying out all-round reform and opening-up, said Song Ding, a research fellow at the Shenzhen-based China Development Institute.

Still, relevant work is in the preliminary stage of phasing in trade port policies and necessary institutional framework, Song told the Global Times on Wednesday, noting that Hainan - the world's largest free trade port in terms of coverage - cannot simply copy the experience of the Hong Kong Special Administrative Region, Singapore or Dubai.

Aside from exploring detailed policies to develop the island into a bridgehead connecting the Chinese mainland with the international community, Hainan needs to strengthen its own attraction for capital, technologies, talent and multinational companies to become an influential and high-level free trade port, Song said.

An official with the provincial finance department said at the same briefing on Wednesday that 11 favorable tax policies have been implemented to complement the FTP.

Local authorities in Hainan are working toward establishing an island-wide customs clearance mechanism, while gradually setting up a tax regime for promoting liberalization and facilitation of free trade and investment, the official said.

The island province has seen rapid growth in foreign trade in the past four years, with an expansion of nearly 75 percent. 　 

In 2021, the total value of Hainan's imports and exports was 147.7 billion yuan ($23.2 billion), up 57.7 percent year-on-year, 36.3 percentage points faster than the national growth of foreign trade, according to local customs. This compares with a reading of 84.9 billion yuan in 2018. 

Additionally, more efforts are needed to develop the island's modern services sector, including finance, shipping and technological innovation to build a solid foundation for the free trade port, according to Jiao Xinwang, director of the China Manufacturing Think Tank.

A customer selects fruits at a local market in Haikou, south China's Hainan Province, March 8, 2022. (Photo: Xinhua)

Far-reaching reforms 

With the numbers pointing to FTP progress, calls are rising for the island to spearhead the country's economic policymaking in the new stage of development. 

Efforts should be made to unswervingly safeguard national security, identify and guard against major risks, and coordinate reform, development and stability, Xi said during his trip ended Wednesday.

Work should be done to eliminate institutional barriers in all aspects and open up wider at a higher level, Xi said.

Xi's last visit to Hainan was four years ago. 

In April 2018 when a gathering was held to celebrate the 30th anniversary of the founding of Hainan Province and the Hainan Special Economic Zone, where the free trade port was announced, Xi highlighted the country's resolution of further opening-up and promoting economic globalization. 

Hainan will be transformed into an island-wide FTP in three stages in 2025, 2035 and 2050, which will play an important role in China's continued opening-up and expansion of foreign trade.

Hainan plays the role of a testing ground for China's opening-up and helps ensure economic security, as the international economic context has undergone tremendous changes following the China-US trade conflict and COVID-19 outbreak, Jiao told the Global Times on Wednesday.

"The free trade port serves as a platform for China to flexibly deal with external uncertainties in expanding opening-up," he said, noting that the island could also play a crucial role in ensuring oil and gas security.

In a sign of the free trade port's two-pronged focus on development and security, a risk officer mechanism has been created, with 15 risk prevention-tailored work groups headed by relevant provincial officials, per the Wednesday press conference. 

The island of Hainan is of special importance to China in terms of territory and ocean safety, especially against the backdrop of some countries provoking China, observers said.

Close to ASEAN countries, the geographical position of Hainan becomes more important to strengthen China-ASEAN economic and trade cooperation amid anti-globalization and populist trends in the West, Jiao said, noting that Hainan could serve as a basis for China's cooperation with ASEAN countries.