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Hainan: Market Profile

Major Economic Indicators

Economic Indicators20152016
ValueGrowth
(%, y-o-y)
ValueGrowth
(%, y-o-y)
Gross Domestic Product (RMB bn)370.37.81404.57.51
Per Capita GDP (RMB)40,8186.91
Added Value Output
   Primary industry  (RMB bn)85.55.4197.14.11
   Secondary industry (RMB bn)87.66.5190.25.11
   Tertiary industry (RMB bn)197.29.61217.210.11
Value-added Industrial Output2 (RMB bn)44.95.1144.22.61
Fixed-assets Investment (RMB bn)335.510.4374.711.7
Retail Sales (RMB bn)132.58.2145.49.7
Inflation (Consumer Price Index, %)1.02.8
Exports (US$ mn)3,742-15.32,123-43.3
   By foreign-invested enterprises (FIEs) (US$ mn)2,427-14.91,113-54.2
Imports (US$ mn)10,217-10.79,205-10.0
   By foreign-invested enterprises (FIEs) (US$ mn)8,109-17.56,101-24.8
Utilised Foreign Direct Investment (US$ mn) 2,0066.2

Notes:
1
In real term
2 For all state-owned and other forms of enterprises with annual sales over RMB20 million

Sources: Hainan Statistical Yearbook 2016, Hainan Statistical Bureau, China’s Customs Statistics, 12.2015, 12.2016

 

General Background

Hainan has a total area of 33,920 square kilometers. The total population stood at 9.11 million in 2015. Hainan - abbreviated as Qiong (瓊), is composed of the Hainan Island (海南島), Xisha Islands (西沙群島), Nansha Islands (南沙群島) and Zhongsha Islands (中沙群島). Hainan used to be a special administrative region of Guangdong province, but was designated as a province and a special economic zone (SEZ) in 1988.

The island is rich in natural resources. Its inland and offshore deposits of oil and natural gas rank one of the highest in China. Hainan has gas reserves of 99.6 billion cubic meters in the main sea basins including the Yingge Sea (鶯歌海). Hainan is rich in certain mineral resources. Its reserve of Titanium is about 70% of the national total. It is also China's major sea salt production base. The Yinggehai Salt Field (鶯歌海鹽田), one of the top salt fields in China, is located in the province.

Industries

Hainan has the largest share of primary sector in its GDP among all provinces of China. Fishery is an important contributor to the agricultural sector. The island's long coastline makes it a favorable breeding ground for shrimp, shellfish and other aquatic products. Sanya (三亞) and Qinglan (清瀾) are Hainan's major fishing ports.

 

Composition of GDP (%)

 200020112015
Primary36.426.123.1
Secondary19.828.323.6
      Industry13.418.813.1
Tertiary43.845.653.3

Source: Hainan Statistical Yearbook 2016

 

Hainan has an abundance of tropical cash crops like coconuts, pepper, coffee, tea and rubber. It is the most important tropical fruit production base and seeds-breeding base in China. Major fruits include pineapple, lychee (荔枝) and longan (龍眼). Hainan is one of the largest banana producers in China. The province is also a production base for herbal medicine. It produces more than 2,500 kinds of herbal medicines. In recent years, sectors such as fishery and fruits developed rapidly.

Hainan’s manufacturing sector is relatively small. Processing of petroleum accounted for about 30% of the gross industrial output in 2015. Besides transport equipment, other major industries are relating to the natural resources. Rubber, foodstuffs and other light industries used to be the major traditional industries of Hainan. Over the past decade, the province has expanded its industrial base to include metallurgy, petrochemicals, chemicals, pharmaceuticals, automobiles, food processing, tobacco, textiles, building materials, machinery and electronics.

Hainan is the largest rubber production base in China. A wide range of rubber products such as tyres, conveyor belts and latex gloves are produced. Electronics is an emerging industry in Hainan. Industries related to food processing and beverages are also strong. "Yeshu" Brand Natural Coconut Juice (「椰樹牌」天然椰子汁) is one of the best-known brands in China.

Tourism

Hainan is keen on utilising its tropical tourism resources such as mangrove forest, coral reefs, beaches, tropical cash crop plantations and rainforest. Sanya (三亞), a tropical beach resort located in the south of the island, is one of China’s major tourist and holiday resorts. Hainan also offers numerous tourist festivals and celebrations. "The Hainan Coconut International Festival" which is held annually attracts thousands of overseas and domestic visitors. The Boao Forum for Asia, modelled on the World Economic Forum, is held every year in Boao of Hainan for Asian leaders.

The local government strives to turn Hainan into an international tourist destination and has developed different resort areas, such as Sanya Beach Holiday Development Zone (三亞濱海度假休閑中心區), Haikou Entertainment & Shopping Development Zone (海口娛樂購物休閑中心區) .

 

Total number of overnight tourists and receipts of tourism (2015)

 2015% change
Number of over-night domestic tourist (million)44.3210.9
Income generated (RMB bn)52.812.8
Number of over-night overseas tourist (thousand)608-8.0
Foreign exchange income (US$ mn)248-6.8

Source: Hainan Statistical Yearbook 2016

 

Beginning in April 2011, tourist and local residents leaving Hainan can enjoy duty free shopping for imported products with total value not more than RMB5,000 and was raised to RMB8,000 beginning November 2012. Since February 2016, non-residence of Hainan can enjoy duty free shopping not exceeding RMB16,000 each year.

Foreign Trade

In 2015, Hainan exported US$369 million to Hong Kong, accounting for 10% of the total exports. Hong Kong was the second major export market for Hainan in 2015 after Vietnam. Other major export markets in 2015 included Singapore, Australia and the US. Major export items include refined petroleum products, textile and garment, electrical equipment and electronic products.

In 2015, major import sources were the US, Oman, France and UAE. Major imports included crude oil, transport equipment, mechanical and electrical products, etc.

Foreign Investment

Hong Kong is the biggest investor in Hainan. In 2015, Hong Kong accounted for 89% of Hainan’s total utilised foreign direct investment. Real estate accounted for 83% of the utilised FDI in 2015.

 

Chart: Utilised FDI of Hainan
Chart: Utilised FDI of Hainan

 

Consumer Market

In 2015, annual per capita disposal income of urban households reached RMB26,356 (+7.6%). Haikou is the major consumer centre in Hainan, accounting for 45% of the total province’s retail sales of consumer goods in 2015. A number of foreign supermarkets such as Carrefour (家樂福) and Rt-mart (大潤發) from Taiwan have emerged in Hainan. Naoguo Shopping (南國超市) is one of the well-known local retailers.

 

Composition of Per Capita Expenditure of Urban Household (%)

 20052015
Food47.629.1
Clothing5.24.5
Medicine & medical services5.97.1
Household articles5.15.2
Transport, post & communications services12.314.3
Recreation, education and cultural services10.98.8
Residence9.920.0

Source: Hainan Statistical Yearbook 2016

 

Economic Indicators of Major Cities (2015)

CitiesGDP
(RMB bn)
Per capita GDP
(RMB)
Value-added
Industrial
Output*
(RMB bn)
Retail Sales
(RMB bn)
Haikou (海口) 116.252,54312.4559.55
Sanya (三亞) 43.658,4681.4418.17
Wenchang (文昌) 17.030,6850.806.35
Qionghai (瓊海) 20.040,0430.427.92
Danzhou (儋州) 44.345,52512.247.77

* For all state-owned and other forms of enterprises with annual sales over RMB20 million.
Source: Hainan Statistical Yearbook 2016


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Content provided by Picture: HKTDC Research