A look at Hainan Free Trade Zone

The country's 12th and largest free trade zone

On Oct 16, 2018, China unveiled a detailed plan to establish the country's southern province Hainan as a free trade zone (FTZ), in its latest move to open up the economy.

The plan, issued by the State Council, China's cabinet, mapped out the target and scope for the FTZ development while identifying key industries that will see fewer foreign investment restrictions.

"The development of the Hainan FTZ is a key measure for making new ground in pursuing opening up on all fronts. The move shows China's resolution and confidence to open wider to the world," said Vice-Minister of Commerce Wang Shouwen at a press conference.

As the country's 12th and largest FTZ, what are the distinguished features of Hainan compared with the other 11 free trade zones?

Strategic position

A pilot zone for comprehensively deepening reform and opening up

A display of the country's ecological civilization

An international tourism and consumption center

A zone offering services and support for the country's major strategies

A key gateway to the Pacific and Indian Oceans


A significant feature of Hainan FTZ is that the zone is an entire island, spanning 35,400 sq km. The other 11 FTZs are 120 sq km each.

The other 11 FTZs are built on regions with good economic bases, while there are both developed and less developed areas in Hainan island, so various experiences can be summed up from Hainan FTZ.


Build Hainan into a high-quality FTZ that promotes trade and investment facilitation, provides an excellent legal environment, thorough financial services, efficient regulation, a favorable ecological environment, and boosts the development of surrounding areas by 2020.


Fewer restrictions

Foreign investors will have wider access in a number of key areas including tourism, education, and telecommunications.

A negative list approach, which outlines economic areas restricted for foreign investment, will be adopted in the Hainan FTZ.

Foreign investment caps in areas including the breeding of new vegetable varieties and their seed production as well as international maritime transport businesses will be lifted.

Hainan will have more autonomy in granting foreign investment access. International businesses providing value-added telecommunication services will no longer need to go through central authorities to enter the market.

To promote international trade, data-based systems will be put into use to improve customs efficiency while multinationals and trade companies will be encouraged to treat Hainan as the center of their global or regional trade network.

Stronger service sectors

Domestic and foreign shipping companies will be encouraged to set up operational or regional centers in the FTZ, as part of the efforts to build the area into an international shipping hub.

More cruise lines with Hainan as a stopover will be developed to foster the local tourism industry.

Tourists from 59 countries can travel visa-free if they start or transit in countries and regions with direct flights to Hainan.

In the pilot zone, patients can get medicine and medical equipment accredited by EU, Japan, and US authorities before they have been officially accredited by the Chinese government.

Tariffs for some medical equipment will be cut in the pilot zone.

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