Xinhua Commentary: Milestone progress of Hainan Free Trade Port poised to boost open global economy

HAIKOU, Dec. 18 (Xinhua) -- The Hainan Free Trade Port (FTP) -- the largest free trade port in the world in terms of area -- began island-wide special customs operations on Thursday, in a landmark move in China's high-standard opening-up.

The milestone development of the flagship project is set to inject strong, sustained momentum into the high-quality development of both the tropical Hainan Province and the whole country, and into economic integration regionally and globally. It is also expected to provide a huge boost for free trade that has been impacted by rising protectionism and unilateralism in recent years.

The creation of a free trade port is the highest level of opening-up in the world today. With rich natural resources and the advantages of being backed by China's mega-market, the Hainan FTP covers the entirety of the 33,900-square-kilometer Hainan Island. The FTP currently has eight open ports and 10 second-line customs ports.

China aims to build the Hainan FTP into an important gateway that leads the country's opening-up in the new era. As a pilot zone for the comprehensive deepening of reform and opening-up, Hainan will contribute to the country's strategic efforts to establish new systems for a higher-level open economy.

The Hainan FTP has entered a new phase of development. It has initially established a framework of policies and institutions to promote liberalization and facilitation of trade and investment. The FTP features arrangements for zero-tariffs, low tax rates and a streamlined tax structure step by step, eventually creating an internationally competitive tax system. Starting Thursday, the share of zero-tariff products in the Hainan FTP has surged from 21 percent to 74 percent, with the number of tariff-free items expanding from about 1,900 to more than 6,600.

The special customs operations will give full play to the role of the Hainan FTP as a magnet for global investment and talent, and a new engine for high-quality development.

The momentum of the Hainan FTP is evident from a set of figures. Since 2020, more than 9,600 foreign-funded enterprises have been newly established in Hainan, by investors from more than 170 countries and regions. The province has opened a total of 75 container liner routes, including 36 foreign trade routes. Tourist arrivals have increased rapidly as Hainan aims to become an international tourism and consumption destination.

Focusing on tourism, the modern services industry and high-tech industries, the Hainan FTP will strengthen coordinated development with the Guangdong-Hong Kong-Macao Greater Bay Area. With close trade ties, the Hainan FTP and Hong Kong have a high level of industrial complementarity and broad cooperation space. Hainan could learn from the management methods of world-leading FTPs like Hong Kong.

Hainan is a key hub along the Belt and Road, linking the domestic and international markets. Located at a key passage connecting the Pacific Ocean and the Indian Ocean, the Hainan FTP will gain an increasingly important position in the world economic landscape.

Thanks to its unique geographical location, the Hainan FTP is expected to play an important role in tapping cooperation potential under free trade agreements such as the China-ASEAN Free Trade Area 3.0 Upgrade Protocol and the Regional Comprehensive Economic Partnership (RCEP).

As a staunch supporter of free trade and economic globalization, China will continue to draw momentum from opening-up to propel reform and development, promote alignment with high-standard international economic and trade rules, and expand market access. The special customs operations of the Hainan FTP demonstrate China's unwavering determination and confidence in expanding high-standard opening-up.

The Hainan FTP with Chinese characteristics has begun to take shape and will gain greater momentum. As a long-term project, the Hainan FTP still has a long way to go. Reforms need to be advanced steadily.

According to plans, the institutional system and operational mode of the Hainan FTP will be more mature by 2035. Hainan Island will develop into a globally influential and high-level FTP by the middle of the century.

A new pace-setter in China's opening-up, the Hainan FTP will take the lead in exploring further institutional opening-up, share development opportunities with investors, and provide fresh certainty and resilience for the global economy through open, win-win cooperation. ■