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China (Hainan) Pilot Free Trade Zone

Construction work on the Hainan Pilot Free Trade Zone (Hainan FTZ) is now well underway, with the project set to extend across the whole of the island, an area of some 33,900 sq km. The development, as outlined in the Overall Plan for the China (Hainan) Pilot Free Trade Zone (formally adopted by the State Council on 16 October 2018), will see the FTZ evolve into a key gateway for China, boosting its connectivity with its Indian and Pacific ocean trading partners.

Development Goals

In line with the goals outlined in the Overall Plan, by 2020, the FTZ will be one of the most open and internationalised zones in the region. More specifically, it will be trade- and investment-friendly, boast a robust legal regime, maintain a comprehensive financial services sector, demonstrate safe and efficient oversight and will have cultivated a superior ecological environment, one set to have a profound influence on neighbouring areas. It is believed that these elements will prove a sound foundation for the development of the proposed Hainan Free Trade Port and see the island take a lead in pioneering China’s overall Free Trade Port strategy.

At present, it is envisaged that tourism, the modern service and high-tech industries will be the Hainan FTZ’s development priorities. In those areas of the FTZ under special customs supervision, systemic investment and trade liberalisation measures will be implemented, while the launch of businesses related to international investment and trade, bonded logistics, bonded repair services and a number of other relevant sectors will be encouraged. At the same time, within the Sanya customs supervision quarantine area, every effort will be made to nurture the development of a number of priority business sectors, including those specialising in the import and transhipment of  animal and plant germplasm resources on an international basis.

Foreign Investment Management

The Special Administrative Measures (Negative List) for the Access of Foreign Investment in Pilot Free Trade Zones (as issued by the National Development and Reform Commission) applies to all the mainland’s Pilot FTZs and sets out the special administrative measures pertaining to those overseas investments that are deemed ineligible for national treatment. In the case of business sectors not featured on the Negative List, in line with the principle of overseas and domestic investments being accorded the same status, the system of pre-approval for overseas-sourced investment projects (including the examination and approval of contracts and articles of association) has been superseded by a record-filing requirement.

All special administrative measures relating to national security, public order, public culture, financial prudence, government procurement, subsidies, special procedures and tax-related matters not on the Negative List, however, remain subject to the existing provisions. Any proposed overseas investment in pilot FTZs in any area deemed relevant to national security will be reviewed under the terms of the Tentative Measures for the National Security Review of Foreign Investment in Pilot Free Trade Zones.

Latest Policies and Regulations

Please see official websites of:

The People’s Government of Hainan Province

China (Hainan) Free Trade Zone (Port) (in Chinese)

Department of Commerce of Hainan Province (in Chinese)

Content provided by Picture: HKTDC Research
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