Hainan and Hong Kong explore greater economic cooperation

Delegates from Hainan province and Hong Kong pledged deeper collaboration in finance, technology, data flows and tourism during a Thursday conference in Haikou, with officials positioning the southern island province as a strategic gateway for international companies to enter the Chinese mainland market.

Hainan Party Secretary Feng Fei called on Hong Kong entrepreneurs to expand investment in the Hainan Free Trade Port, which offers zero-tariff policies, low tax rates and simplified tax structures. He promised "maximum sincerity, optimal services and the best environment" for businesses looking to set up operations in Hainan.

"Hong Kong and Hainan have walked forward hand-in-hand, and the road to cooperation has grown wider," Feng said.

"More Hong Kong entrepreneurs are choosing Hainan and becoming important participants, contributors and beneficiaries in building the free trade port."

Jonathan Choi Koonshum, chairman of the Chinese General Chamber of Commerce and the Hong Kong-based Sunwah Group, outlined a series of policy synergies between Hainan's zero-tariff policies and Hong Kong's free-port framework.

He recommended that Hong Kong companies — particularly in electronics and pharmaceuticals — set up factories in Hainan to take advantage of a value-added processing tariff exemption. That model, he said, could help build cross-border supply chains targeting the Asia-Pacific market.

Choi also proposed the creation of a cross-border "bonded computing power zone" in Hainan, where Hong Kong researchers could access lower-cost computing resources on the mainland through a whitelist management system.

"Hainan has unique policy advantages in cross-border data flows and power costs," he said. "This could enable a hybrid architecture where data remains in Hong Kong and computing is done on the mainland."

Xing Dandan, CEO of Hainan Modern Technology Group, called for a "front store, back factory" model to deepen Hainan-Hong Kong ties. She identified four priority areas: international computing power trading, space data exports, AI-driven remote sensing services, and leveraging Hong Kong's capital markets to boost AI development.

"This month we completed the country's first approved space data export order, reflecting the free trade port's policy advantages," Xing said.

She described Hong Kong's investment in Hainan's computing capacity as a combination of policy incentives, cost advantages, market demand and financial support - with Hainan providing computing infrastructure and Hong Kong offering capital, regulatory compliance and international market access.

Connie Leung, a committee member and vice-chairwoman of the culture committee of the Hong Kong Chinese General Chamber of Commerce, said Hainan's production and processing capabilities could complement Hong Kong's financial and professional services.

"I am also considering setting up an office in Hainan," Leung said. "Combined with Hong Kong's strengths, this can form a very good cooperation model."

Hong Kong has been Hainan's largest source of external investment. In 2025, Hong Kong companies established 793 new ventures in Hainan, up 21.5 percent from a year earlier, according to provincial data. Investment from Hong Kong into the island province surpassed 18 billion yuan ($2.6 billion), an increase of more than 20 percent. Trade between Hainan and Hong Kong reached 9.35 billion yuan in 2025, more than triple the volume in 2020.

Hainan has also actively invested in Hong Kong, issuing offshore bonds in the special administrative region for four years running. The cumulative issuance has reached 18 billion yuan.