Transcript: CCG VIP luncheon on Hainan Free Trade Port & China's opening up

Hainan senior officials join envoys from 14 countries to discuss the island province’s role as a national policy laboratory.

On Friday, May 16, the Center for China and Globalization (CCG) hosted its latest instalment of the CCG VIP Luncheon series, convening senior officials from Hainan and policy experts from the Ministry of Commerce to share the development of the Hainan Free Trade Port with Beijing’s diplomatic community.

The featured speakers were

• WANG BIN, Member of the Standing Committee of the Communist Party of China (CPC) Hainan Provincial Committee, Director of the Publicity Department, and Spokesperson for the CPC Hainan Provincial Committee

• LI Yufei, Deputy Director of the Office of the Committee for Deepening Overall Reform of the Hainan Provincial Committee of the Communist Party of China (Office of the Free Trade Port Working Committee, CPC Hainan Provincial Committee)

• ZHANG Jianping, Deputy Director of the Academic Committee at the Chinese Academy of International Trade and Economic Cooperation (CAITEC), Ministry of Commerce; Vice Chairman of the China Association for Social and Economic System Analysis (CASESA)

• Tracy Huang, Deputy Director of Hainan International Economic Development Bureau (IEDB)

Ambassadors to China from six countries—Estonia, Iceland, Indonesia, Latvia, Malta, and Norway—were in attendance, alongside 11 diplomats from Croatia, Finland, India, Japan, Switzerland, Turkey, the United Arab Emirates, and the United States. Representatives from international organisations, chambers of commerce, multinational corporations, and both Chinese and international media also took part.

The event was covered by Chinese media outlets, including China Daily and CGTN. A video recording of the luncheon remains available on the Chinese internet and is expected to be uploaded to CCG’s video channel on YouTube soon.

The following transcript is based on the video recording and hasn’t been reviewed by any of the speakers.

Mabel Lu Miao, Secretary General, CCG

Your Excellencies, distinguished guests, ladies and gentlemen, good afternoon. Thank you all for joining us today at the 13th CCG VIP Luncheon. The CCG VIP Luncheon series is initiated and hosted by Center for China and Globalization (CCG). This event aims to share China’s latest developments with embassies in China, international organisations, multinational companies, and academic experts. It is a high-end platform for international exchanges, providing insights into China’s development and exploring global cooperation opportunities.

Today’s luncheon will centre on the new progress of the Hainan Free Trade Port and the major trends of China’s expansion of opening up. We will explore related issues and conduct analyses together. We are honoured to have four distinguished speakers who will share their insights and perspectives with us.

First, please allow me to introduce our speakers for today. Let’s welcome the four speakers with a warm round of applause.

• WANG BIN, Member of the Standing Committee of the CPC Hainan Provincial Committee, Director of the Publicity Department, and Spokesperson for the CPC Hainan Provincial Committee

• LI Yufei, Deputy Director of the Office of the Committee for Deepening Overall Reform of the Hainan Provincial Committee of the Communist Party of China (Office of the Free Trade Port Working Committee, CPC Hainan Provincial Committee

• ZHANG Jianping, Deputy Director of the Academic Committee at the Chinese Academy of International Trade and Economic Cooperation (CAITEC), Ministry of Commerce; Vice Chairman of the China Association for Social and Economic System Analysis (CASESA)

• Tracy Huang, Deputy Director of Hainan International Economic Development Bureau (IEDB)

Before we start, let’s take a moment to acknowledge some of our special guests and VIPs who are here. We have invited diplomats from 14 countries, including six ambassadors, along with representatives from international organisations, enterprises, and the media. They are: Ambassador of Estonia, Ambassador of Iceland, Ambassador of Indonesia, Ambassador of Latvia, Ambassador of Malta, and Ambassador of Norway.

We also have diplomats from various embassies. They are: Embassy of Croatia, Embassy of Finland, Embassy of India, Embassy of Japan, Embassy of Switzerland, Embassy of Turkey, Embassy of UAE, Embassy of the United States.

We also have representatives from various international organisations, including the OECD and UNICEF.

We also have representatives from domestic and international enterprises. They are: BASF China, Bayer China, BeiGene, BMW China, DuPont, Education First (EF), ETS China, KKR, Oracle, P&G, and VALE.

We have also invited the international media, including China Daily, CGTN, CNBC, and Nippon Television.

We are honoured to have representatives from Hainan province as well.

On behalf of the Center for China and Globalization, I extend a sincere welcome and heartfelt thanks to all the experts and guests today. Now let’s welcome Dr. Henry Huiyao Wang, Founder & President of the center for China and Globalization, former counsellor of China State Council, to host luncheon. Welcome, Mr. Wang.

Henry Huiyao Wang, President, CCG

Director Wang Bin from Hainan Provincial Government, excellencies, ambassadors, representatives from different multinationals and international organisations, friends from media as well. We have Director Lan sitting at the back as well. We are very pleased to have all of you come here today.

I think this is really a great occasion today that we’re having the 13th CCG VIP Luncheon. This month, exactly one year ago, we launched the CCG VIP Luncheon. It has been very, very successful, and it has become a brand name in the capital of China. We have enjoyed great support from our diplomatic colleagues and circles, from the multinational community, chambers of commerce, as well as international media. We’re very pleased to welcome all of you here.

Today, it’s the first time—I was talking to Minister Wang just now—that we are having a VIP luncheon devoted to a provincial agenda. We know that Hainan is going to be the largest free trade zone in China. This year, there will be a customs system separate from the mainland, and it will be independently run as an economic special zone. A lot of things are going to happen this year. We’re excited and would like to learn more.

We are fortunate today—we have especially invited four senior officials from the Hainan province. They flew to Beijing. It’s important to recommend and introduce the importance of Hainan province, and the special position it has in the Chinese economy. It’s a great honour for all of us to welcome all of you today to this occasion that introduces Hainan as the largest Free Trade Port, the largest free trade zone in China.

First, I’d like to have a keynote speaker today, whom we invited from afar: Director Wang Bin. He’s a member of the Standing Committee of the CPC Hainan Provincial Committee, one of the top leaders in Hainan. He’s also the spokesperson for the CPC Hainan Provincial Committee. He has quite a few roles. Director Wang has rich experience. He has a major in marine studies, has worked in Beijing, and has a lot of experience in marine affairs and in managing and governing different parts of government cycles. He has experienced all those areas. Now he’s been in Hainan for quite some time. He’s going to give us the introduction of Hainan province, of this largest special economic zone in China. Without further ado, let’s welcome Director Wang Bin to give us a keynote.

Wang Bin, Member of the Standing Committee of the CPC Hainan Provincial Committee, Director of the Publicity Department, and Spokesperson for the CPC Hainan Provincial Committee

Esteemed Chairman Wang Huiyao,

Honourable ambassadors and representatives of international organisations,

Distinguished friends of business and the media, ladies and gentlemen:

It is a great pleasure to be with you all here today in the pleasant early summer in Beijing. On behalf of the CPC Hainan Provincial Committee, I offer my heartfelt gratitude to the Center for China and Globalization (CCG) for their meticulous work in arranging today’s events, which gives us the opportunity to introduce the Hainan Free Trade Port to you. I also extend a warm welcome and sincere thanks to friends from all over the world for taking the time to share this wonderful event with us.

The construction of the Hainan Free Trade Port is a major national strategy personally planned, deployed, and promoted by President Xi Jinping, with the aim of matching the highest level of openness in the world. "Striving to build Hainan into a key gateway leading China's new era of opening up" is President Xi Jinping's new and higher requirement for Hainan. Our task is to accelerate the construction of a free trade port with Chinese characteristics and global influence, with the goal of making Hainan the epitome of China's reform and opening up in the new era and building the Hainan FTP into a shining Chinese model in the world.

At present, the construction of the Hainan FTP has taken shape and gained momentum. The number of new business entities established since the construction of the Hainan FTP began has exceeded the total of the past 30 years, with 158 countries and regions investing in Hainan. The number of newly established foreign-funded enterprises has grown by an average of 57% annually, and paid-in foreign capital has grown by an average of 36%. The economic openness rate has increased from 17.3% in 2018 to 35% in 2024. An increasing number of domestic and foreign enterprises and investors are voting with their feet, expressing confidence in and becoming witnesses, participants, contributors, and beneficiaries of the construction of the Hainan Free Trade Port.

Now I would like to explain to you the four strengths of the Hainan FTP’s opening up.

First, Hainan boasts a uniquely advantageous location. The Hainan Free Trade Port, backed by a massive domestic market, is adjacent to Southeast Asia, is well connected to Northeast Asia, faces the Pacific and Indian Oceans, and sits at the intersection of China's dual circulation strategy. Hainan is just four hours by plane from 21 countries and regions in Asia, encompassing roughly 47% of the global population and 30% of the world's GDP. An 8-hour flight extends this to 59 countries and regions, 67% of the global population, and 41% of the world's GDP.

The Hainan FTP stands at the intersection of two of the world’s most dynamic markets, China, with a population of 1.4 billion, and Southeast Asia, with a combined population of 700 million. Its location is conducive for both international firms looking to break into the Chinese market and Chinese companies seeking to go global, not to mention contributing to the creation of a new model centred on countries and regions participating in the China-proposed Belt and Road Initiative, better fostering economic globalisation and promoting the building of a community with a shared future for mankind.

Second, Hainan embodies China's highest level of openness. In line with the highest international standards of openness, Hainan focuses on the liberalisation and facilitation of trade and investment and actively promotes comprehensive opening-up.

We are gradually implementing China's most favourable tax policies, centred around zero tariffs, low tax rates, and a simplified tax system. Policies such as the dual 15% income tax cap for enterprises and individuals have enabled business entities to continue to benefit.

We boast China's shortest negative list for foreign investment access, largest catalogue of encouraged industries, and first negative list for cross-border trade in services.

We have the most relaxed entry policies in the country, with visa-free entry becoming the primary way for foreign nationals to visit Hainan.

We have dedicated international internet data channels covering key areas of the Hainan Free Trade Port to meet the data needs of most sectors. Once special customs operations come into effect by the end of 2025, we will further increase the convenience and freedom of trade and investment across the board.

Third, Hainan possesses a stable, predictable legal environment. In addition to our FTP policies, we have a stable, predictable legal environment. The Hainan Free Trade Port Law of the People’s Republic of China, which is national legislation, enshrines the Hainan Free Trade Port's various preferential policies in law. Among these are granting Hainan exclusive legislative power for the Free Trade Port.

On this basis, we have introduced supporting regulations on liberalising and facilitating trade and investment, as well as fair competition, and have established a legal system in line with international standards.

Hainan boasts fair and impartial law enforcement and judicial bodies. We have established intellectual property courts and an international commercial court for foreign-related civil and commercial cases, ensuring equal treatment and protection for domestic and foreign investors and firms.

We provide convenient legal services. We have accelerated the establishment of a “one-stop” dispute resolution centre for international commercial disputes that organically connects mediation, arbitration, and litigation, ensuring that investors from all over the world can enjoy promising investment prospects in Hainan with their legal rights and interests fully protected.

Fourth, Hainan has a globally accessible free trade network. We have actively expanded our circle of friends, strengthening economic ties and cooperation with global trade partners, promoting regional trade liberalisation and facilitation, and making regional integration a significant force in driving the globalisation process.

At present, the Hainan Free Trade Port has successively signed the Global Free Trade Zone (Port) Partnership Initiative with 38 free trade zones (ports) worldwide, and has signed cooperation memoranda with over one-third of pilot free trade zones in China. It promotes institutional openness around rules, regulations, management, and standards, builds multi-level policy communication channels and exchange mechanisms, and explores mutually beneficial cooperation mechanisms that meet the needs of all partners, maximising consensus and amplifying the power of cooperation.

The crucial role the Hainan Free Trade Port plays in creating a “two headquarters bases,” [a headquarters base for Chinese enterprises going global and a headquarters base for overseas enterprises entering the Chinese market] “two hubs” [an international shipping hub along the New Western Land-Sea Corridor and an aviation gateway hub facing the Pacific and Indian Oceans] and “two networks” [an international air-sea transportation network and a network for international economic and trade cooperation] platform hub has become increasingly prominent.

Looking ahead, we believe that a Hainan Free Trade Port with greater openness, stronger policy support, broader impact, a better business environment, more vibrant business entities, and enhanced public benefits will undoubtedly inject new momentum into China's economic development and bring fresh vitality to the opening and development of the global economy.

I would like to conclude my speech by extending a sincere invitation to friends from all countries to come to the Hainan Free Trade Port to invest, start businesses, travel, and share the opportunities and dividends of win-win cooperation with the Hainan Free Trade Port!

Thanks for your attention.

Henry Huiyao Wang

Thank you, thank you, Dr. Wang Bin. I just noticed that Dr. Wang holds a PhD in Environmental Science from Ocean University of China in Qingdao, and was also a visiting scholar at the Royal Institute in the Netherlands for marine research. He is indeed a very knowledgeable expert. He has set the tone for our luncheon discussion—very comprehensive, very informative, very stimulating. So thank you, Dr. Wang, for your excellent opening keynote.

We still have a few distinguished speakers to come. After that, we hope to open the floor to our ambassadors, representatives from international organisations, multinationals, and the media.

Now, while you are enjoying your meal, I would like to introduce Mr. Li Yufei. Mr. Li is the Deputy Director of the Office of the Committee for Deepening Overall Reform. So basically, he’s in charge of the Free Trade Port Working Committee of Hainan province. His previous roles include serving as First Secretary of the Education Office at the Chinese Consulate General in Toronto, and as Director of the Legal and General Affairs Department in the Overseas Study Section of the Secretariat of the China Scholarship Council. He is also a highly knowledgeable scholar.

Mr. Li, please, welcome.

Li Yufei, Deputy Director of the Office of the Committee for Deepening Overall Reform of the Hainan Provincial Committee of the Communist Party of China (Office of the Free Trade Port Working Committee, CPC Hainan Provincial Committee)

Hello everyone! Thank you so much for joining us at this lunch event. I know it’s time to relax, so I’ll keep it short and keep it sweet. I want to quickly share some ideas about the Hainan Free Trade Port. I think you will find some interesting things. What’s the Hainan Free Trade Port Policy? What is it? I’ll sum it up in four statements.

First, the most open province for foreign investment in China. Second, the lowest tax burden in the Chinese mainland. Third, the cumulative effects of Hainan Free Trade Port policies, not just one or two policies, it’s cumulative policies. The last one, the national Law guarantees that Hainan’s preferential policies will not change.

“Hainan is the most open place in China to foreign investment.” Hainan has China’s shortest negative list for foreign investment and China’s first negative list for cross-border trade in services. We are the only province in China that allows overseas universities to independently operate campuses. We allow the establishment of wholly foreign-owned hospitals. Foreign Medical products can be introduced for pilot use at Boao Lecheng—it is a special medical zone, which has become an important channel for the entry of specially licensed medical drugs and devices into China. In Lecheng, the regulatory efficiency is high. Approval can be obtained within half a day. So we can combine the two offices into one office.

Second, we use U.S. real-world data. The medication of patients can serve as clinical data for drug entry in China. Third, we have a special drug insurance, only 29 yuan a year, and you can get 1 million yuan special drugs. Fourth, price. We have a good price in Lecheng. The last one, you can take your medicine at home, not only in Lecheng. So it's an explanation about Lecheng.

In addition, Hainan has the most relaxed visa-free entry policies in the Chinese mainland. Currently, Hainan grants visa-free entry to citizens from 78 countries, and foreigners can enter for purposes other than work and study.

“Hainan has the lowest tax burden of any place in the Chinese mainland.” The current general corporate tax in the mainland is 25%. In Hainan, it is 15%. For individuals, the highest income tax rate in the mainland is 45%. In Hainan, it is 15%. We also have zero tariffs.

We have all these policies. So what is the cumulative effect of Hainan’s policy? Let me give you an example. In 2021, a company invested in Hainan because of the preferential policies. They built a factory within seven months. And from 2021 to 2023, the company took advantage of the import duty exemption policy for the value-added processing of goods sold in the Chinese mainland, reducing its tax burden by 260 million yuan. It also enjoyed the 15% on corporate income tax, further reducing its taxes by 20 million yuan. It incurred zero tariffs when importing the equipment from abroad, saving more than 1.5 million yuan. Altogether, it is about 300 million yuan saved compared to other places in the mainland. So it is an example.

So we have all these preferential policies. Will it change in the next years? No. We have national law that guarantees that Hainan’s preferential policies for investors will not change. The Hainan Free Trade Port Law of the People’s Republic of China was enacted in June 2021 and has come into effect. This is the first time to enact a law at a national level for a province, and this law sends a clear message to investors worldwide that Hainan’s opening up will not change, its preferential policy will not change, its prospects will only grow bigger and brighter.

An FTP policy framework focused on trade, investment, cross-border capital, personnel, transportation, and data has been basically established. Over the past six years, Hainan’s trade in goods and trade in services have grown by 22% and 20% annually, and foreign direct investment has grown by 46%. It’s about 10 times seven years ago. Hainan Island will be a special customs operation by the end of 2025, just the end of this year. And the level of openness will reach new heights.

So we have all these preferential policies. What industries will we use these policies to develop? We have four major leading industries: tourism, modern services, high-tech industry, and high-efficiency tropical agriculture. Hainan has very good tropical agriculture and fruits. It’s very delicious.

And we have three future industries. That’s seed breeding, deep-sea and aerospace. We also have offshore duty-free shopping, international education, and healthcare.

We are leveraging Hainan's tropical climate advantages to develop high-efficiency tropical agriculture. Relying on the Yazhou Bay National Lab, we are transforming Hainan into a source of seed science and technology innovation and building the internationally influential “Nanfan Agricultural Silicon Valley.”

In China, we have 3 million square meters of sea area, and Hainan have 2 million. So we are leveraging Hainan's deep-sea advantages to develop industries such as deep-sea energy, marine equipment manufacturing, and deep-sea aquaculture.

We have leveraged our low-latitude advantage to build China’s first commercial space launch site, which successfully carried out its first launch in November last year, and now its regular launches have begun.

The China International Consumer Products Expo, held annually in April, has become a platform for showcasing and trading global consumer products. We welcome merchants from all over the world to exhibit and purchase products at the Expo.

Hainan also permits eligible overseas universities to operate schools independently or cooperatively and allows the establishment of wholly foreign-owned hospitals. Medical products can be piloted in the Boao Lecheng International Medical Tourism Pilot Zone, and the offshore duty-free shopping accounts for 15% of the international duty-free market. We welcome more renowned universities, medical institutions, and international brands to cooperate with us.

There are 100 million person-times visits to Hainan every year, including over 1 million foreigners. We have constructed a 1000-kilometre-long Hainan Coastal Scenic Highway, encircling the whole Hainan Island, along which we have planned 40 tourist stations. We welcome international design, construction, and operations firms to work with us in building and running them. So, we welcome the companies, welcome you to Hainan to have a visit. Thank you so much.

Henry Huiyao Wang

Thank you, Director Li. That was also a very detailed and comprehensive report. I thought China offered visa-free entry to 59 countries, but you mentioned 78 countries, so I’m glad to learn that the number has increased. You also highlighted the lower tax rates, the many medical advantages, and of course, Hainan as China’s top tourist destination. You gave another angle of why Hainan is so attractive. So thank you, Director Li Yufei, for your very exciting talk.

Now I’d like to introduce our next speaker. He’s from a MOFCOM research institute, Mr. Zhang Jianping. He’s the Deputy Director of the Academic Committee at the Chinese Academy of International Trade and Economic Cooperation (CAITEC) under the Ministry of Commerce. He’s also a member of the China National Committee for Pacific Economic Cooperation and Vice Chairman of the China Association for Social and Economic System Analysis (CASESA).

So, Professor Zhang, your turn, please. Let’s welcome.

Zhang Jianping, Deputy Director of the Academic Committee at the Chinese Academy of International Trade and Economic Cooperation (CAITEC), Ministry of Commerce; Vice Chairman of the China Association for Social and Economic System Analysis (CASESA)

Distinguished guests, ladies and gentlemen, it’s my great honour and pleasure to share some of my viewpoints. Just before, two speakers already introduced an assortment of preferential policies and Hainan’s advantages in development. For me, because in the last more than 30 years, I mainly focused on international, regional cooperation and integration, so let me upgrade to the regional level and globalisation level.

Hainan Free Trade Port is located between China, this huge market, and Southeast Asia, a new emerging market. If you look at the Regional Comprehensive Economic Partnership (RCEP), China’s market and ASEAN’s together form the largest emerging market in the world.

Meanwhile, you can see that China and ASEAN have already had an upgraded Free Trade Agreement in place for more than 20 years. And if you look at the trade volume between China and ASEAN, it was already close to 1,000 billion USD last year, specifically, 980 billion USD.

In this regard, I think that in the future, we must further explore the market potential not only of the China-ASEAN Free Trade Agreement, but especially that of RCEP.

Nowadays, RCEP—if you look at its GDP scale, population scale, trade scale, as well as capital flow—all of those scales already surpass 30% of the global level. So the 21st century belongs to the Asia-Pacific region. For me, I think more precisely, the 21st century belongs to East Asia.

So I’d like to say, if you look at RCEP rules and their applications, actually, for many Chinese enterprises and those enterprises from ASEAN—11 countries in total—the utilisation of RCEP rules is not so high. According to some statistics, it is estimated at about 10%.

On the other hand, if you look at Japanese corporations as well as ROK corporations, their utilisation ratio is already 50%. So in this regard, we think that RCEP needs to provide trade creation effects, investment-increasing effects, as well as job creation effects. However, we are still not on the rational level.

Of course, Hainan Island provides another very, very good trade and investment environment. For example, there are enterprise income tax incentives as well as zero-tariff policies. Meanwhile, another very important rule is the ROO—Rules of Origin. For example, if some raw materials enter Hainan Island and, after manufacturing, the value added increases by more than 30%, then when the goods enter China’s market, they can enjoy zero tariffs.

Of course, for RCEP, we also have another very important ROO. That is, if you can have value added within the 15 RCEP economies—no matter if it’s these four or another three different economies—you can accumulate more than 40% value added, and then your goods can enjoy zero tariffs in all 15 economies.

In this regard, we hope that Hainan Island can combine its local advantages and policies with RCEP’s ROO rules. Then, as was just mentioned earlier, we hope to promote leading industrial development, including in the manufacturing sector, high-tech sector, service sector, tourism sector, as well as the tropical agriculture sector. We hope that all of these sectors can be concentrated in Hainan Island. We also hope to promote international trade, international investment, and international financing there. Then, we can deliver benefits to all stakeholders.

Of course, that’s not easy. We realise that Hainan Island—if you look at its industrial foundation, if you look at its awareness of reform and opening up—we would say that Hainan Island still needs to learn from better practice and experience of China’s more developed provinces, such as Guangdong, Shanghai, and Shenzhen. Meanwhile, we hope that Hainan Island can learn from other Free Trade Ports, such as Singapore, Hong Kong, and Macau, and that they can work together and cooperate with one another.

I have to say that the Hainan Free Trade Port is very unique in the world because other Free Trade Ports operate under legal frameworks developed by Western countries. However, Hainan Island has its own legal environment with Chinese characteristics. We hope that we can promote this legal and business environment and have more transparency. Also, we can provide a very good business environment not only for Chinese enterprises but also for foreign enterprises, so they can compete in Hainan Island to promote fair competition and our high-quality development.

Of course, for Hainan Island, we also call it the “Eastern Hawaii,” because we hope to promote the development of this international tourism island. We realise that we have to respect the demands of tourists and residents. Meanwhile, we also have to follow international standards and ensure that foreign tourists and foreign businesspeople can enjoy their investments and their travel experience in Hainan Island.

So, generally speaking, I think there is huge market potential and development potential for Hainan Island. But we also need to work with all investors, trade partners, neighbouring countries, and stakeholders from all over the world. We hope to promote Hainan as China’s reform and opening-up highland.

Nowadays, we are facing de-globalisation challenges, especially in recent months. Actually, all countries suffer from the United States’ amazing tariff measures. I have to emphasise that globalisation and regional economic integration are the development trends, and we cannot go back. In this regard, for the Chinese side, we firmly support globalisation and support the WTO regime. We hope that Hainan Island can have new development under this new situation. Also, we hope that Hainan Island can become a leading place for China’s new round of reform and opening up.

Thank you for your attention.

Henry Huiyao Wang

Okay, thank you. Thank you, Professor Zhang. You talked about this from a more macro point of view—from regional economic integration, and also how that can contribute to regional prosperity and development. This is really another great angle for looking at the topic.

Now I’d like to invite our next speaker. Our final speaker is Tracy Huang. She’s the Deputy Director of the Hainan International Economic Development Bureau, which also oversees this activity. Prior to this, she served as Division Director at the Foreign Trade Development Bureau under the Ministry of Commerce.

So welcome, Tracy, for your final speech.

Tracy Huang, Deputy Director of Hainan International Economic Development Bureau (IEDB)

Thank you, distinguished Dr. Wang Huiyao, Dr. Wang Bin, your excellencies and distinguished guests from the diplomatic missions as well as businesses,

Good afternoon. It is my huge honour to join today’s luncheon and share with you some latest developments of our industries and success stories. So we’ve prepared a brochure for each of you. Just now, Director Yufei has already outlined the modern industrial system of Hainan Free Trade Port that consists of four pillar industries that account for over 70% of our GDP, as well as three future-oriented emerging industries and three new consumption industries. So here, I would like to share more information about some specific sectors within these industries.

First and foremost, our tourism industry. People all know that Hainan has long been a tourism destination, and nowadays, we are trying to build it into an international consumer and tourism centre. So, last year, the total number of incoming passengers hit over 90 million. And according to statistics, these people come to Hainan to spend a lot of money. So we have the largest amount of money spent in Hainan, among all the Chinese provinces, in terms of travelling. There are different forms of activity you can do here. We can enjoy our vacation. We can organise some nice activities, as well as doing some duty-free shopping.

So, built on our rich natural resources, like the sandy beaches and the only national park that features tropical rainforest, we are also trying to build a lot of new infrastructure and facilities to provide new opportunities for global businesses. For example, we are building the Round-the-Island Scenic Highway, the tourist highway, and we are introducing more theme parks and IPs. And we are attracting some high-end retail projects. For example, DFS, under the LVMH Group, is investing in the largest project in Yalong Bay in Sanya, and they’re trying to be like the seven-star luxury shopping and leisure centre here. The Swire Group from the UK is building a new Taikoo Li project here. And the Super Mediterranean project, invested by the already very successful Atlantis Hotel, is trying to build an AI-driven project that could lead the consumption trend in the future.

So during this process, there are enormous opportunities unleashed to your business as well. We all know that Hainan could attract the most people during winter. However, nowadays, we are trying to build it into a destination all year round. For example, we are working with international sports IPs, like the Round Hainan Regatta event, the Tour of Hainan road cycling, and some golf tournament events. We are also negotiating with the International Boxing Championship, the Clipper Round the World Yacht Race and a number of other first-tier, world-class championships in order to attract more tourists to come.

And after COVID, Hainan has been a very popular location for international pop stars and singers to have the first stop of their series of events in China. We already hosted events cooperating with singers like Kanye West, Charlie Puth, and a lot of other well-known performance groups as well.

I think offshore duty-free shopping is a very unique policy for Hainan, because it’s one of a kind in the world. It offers a very low threshold, yet duty duty-free shopping experience for people to reach Hainan, and it is also an ideal chance for global brands to meet a large number of Chinese consumers as well. There are altogether 12 duty-free stores all across the island. Last year, the total sales hit 47 billion yuan. And I think during this process, we have successfully helped new brands to enter not only the Hainan market but also the mainland market.

Another sector I would like to highlight here is the green and low-carbon industry, because Hainan, besides building a Free Trade Port, tries to turn itself into an international clean energy island. So, a lot of clean energy technologies are used here. A lot of opportunities are also unleashed to overseas companies. For example, Siemens Energy is trying to establish an innovation centre. Also, some car makers, like Volkswagen Group, are trying to provide some clean energy solutions as well. So there’s always something we can do to combine your ESG or your strategic transformation with the development of our clean energy island.

The third sector I would like to highlight is the digital economy industry. This is within the overall policy toolkit of Hainan Free Trade Port. We offer safe and orderly data flow. Last year, the central government issued three licenses to local operators in Hainan, meaning that, in the future, there would be much more convenient cross-border data transfer. So we have facilities like submarine cables connected to Hong Kong and Singapore. And we encourage a lot of data-bonded businesses, for example, data processing businesses, here to thrive. For example, the U.S.-headquartered Dun & Bradstreet, a data-intensive company, has already established a subsidiary in Hainan in order to have all the important export of data here.

The last specific policy I would like to highlight is a new policy we released last year, which is the multi-functional free trade account of the Hainan Free Trade Port. So this account is a very unique account. In fact, it’s an offshore account that could allow you to have completely free capital or money flow between Hainan and the world. Also, under the same name of the company, you can also open a domestic account. So between these two accounts, foreign exchange or money transfer is much relaxed. It means that you can totally combine your Chinese business and global business in Hainan, using very facilitated financial tools.

So, finalising the industry part, we’ve come to the industrial parks in Hainan. All across the island, there are altogether 13 key industrial parks. In the northwest, we have large seaport areas for the manufacturing industry and heavy industry. In the north, near the Haikou area, we have industry parks for software, internet industry, and TMT industry, a bonded zone, and a national-level, new-and-high-tech park. Moving to the east, we have the Wenchang Satellite Launch Centre, which is open for international cooperation for commercial space business. And then moving to the south, we have Boao Hope City, or Lecheng, a medical pilot zone, which is like a gateway for the latest drugs, medical devices, and technologies to reach the Chinese consumers. People can come here to receive treatment and prescriptions and get the latest treatment in the world. And moving to the south, we also have a zone for educational cooperation. More down to the south, in Sanya, we have a central business district and also the national sea lab there, and also deep-sea centre there. So, each part would focus on one or several key industries. We, of course, welcome you to have an inspection tour there to learn more information about these parts.

Last but not least, I would like to talk about some specific platforms we can cooperate on at once. For example, we host the annual Boao Forum for Asia, the annual meeting held in Boao. It is an event for heads of state and business leaders to talk about potential cooperation, focusing on a number of topics that would capture the attention of the international community.

Also, more specifically, we host the annual China International Consumer Products Expo. It’s a first-tier, national-level Expo that focuses on consumer goods. So, in terms of scale, it’s the largest one in Asia-Pacific. We held the fifth session of this Expo last month, attracting more than 4,000 brands from 71 countries and regions to join a very successful event. You can also find the specific categories of consumer goods we welcome and some of our participating brands.

Of course, we have a lot of diplomatic missions here. I would like to say thank you for all of your support and participation already to the Hainan Expo. We have many country pavilions on debut each time during this expo, and we work with some countries as the country of honour for several years already. We would like to, through your introduction to your companies and brands, maybe more of them can come here to seek new opportunities to work with the Chinese market.

Along with the exhibition, we would host some featured events. First and foremost would be match-making events between buyers and brands. So brands, one stop, could meet the duty-free stores, the large shopping retailers, and the online e-commerce platforms, as well as very high-end VICs, the high-income population as well. And we have a lot of brands that have new product launches during this expo. After the expo, we successfully helped many of these brands to land down their business in Hainan Free Trade Port.

Because the expo is also a very good occasion for companies to come here to experience the Free Trade Port and to have a very good time going around the island to discover new opportunities. So after the expo, they are now working in Hainan. Many of them have already established a China business headquarters here, including Estee Lauder and Tapestry and a number of leading luxury groups or brands. So, we sincerely want to work together with you, and you can always contact us, find us through these links. We now have a lot of diplomats and ambassadors. We also want you to be the ambassador for Hainan Free Trade Port to bring our policies to your companies and to be a matchmaker between the Free Trade Port and your companies so as to help them find more opportunities when they try to work with China. Thank you.

Henry Huiyao Wang

Thank you, Tracy, for another round of very detailed and also very stimulating introduction of Hainan. I think the little brochure you prepared is very helpful—I hope everybody got a copy of that. It really highlights all the key points from your presentation, including detailed locations of the Expo, Boao Forum, and the 13 industrial zones located in Hainan. Very, very helpful.

Now we’re entering the most exciting part—the Q&A and discussion session. We’ll have about another 20 minutes for this exchange, and afterwards, we can have further discussions with the senior officials from Hainan Province. Of course, we have Dr. Wang, Director Li, and Professor Zhang, and of course, Tracy, our last speaker, who was also very exciting.

We have microphones around the room—yes, please, we have a gentleman here. Go ahead.

Saeed Alghfeli, First Secretary, Head of the Economic Affairs Section, Embassy of UAE

Good afternoon, dear colleagues and your excellency Dr. Wang, thank you so much for your inspiring speech. We pay close attention to Hainan, and I just have one simple question: how do you see Hainan in the next 10 years?

Wang Bin

Good question. I try my best to answer your question in English, but my English is so poor. Maybe my colleague can translate for you. That’s a concern about the future of our island. Just as my speech mentioned, we have a very great future, because I think there are several reasons why we have some confidence.

First of all, this is a very high-level, nationally treated. Hainan FTP construction is not just a provincial matter of our own, but a national-level strategy. It’s a proposal and initiative put forward by high-level leaders. They have provided us with clear roles, direction, and requirements, as well as strong support from the central government of China. That’s a point—I think we have enough support from a high level.

Second, I think it’s because of our location—at the centre of Asia, or even in a very crucial position. This is not only in terms of geography, but also in terms of business and international relations. While all of humankind is facing many challenges in the near future, in the case of Hainan, we want to present a new phase, or a new method, of how to open up to the world at a higher level and assemble not just economic advantages, but also policy advantages, to better facilitate international companies and investors. I think, just like this event, we welcome friends from all over the world to join us to promote this great opportunity.

Finally, I’ve been living in Hainan for five years, and I truly find it to be a wonderful place—not only for work, but also for tourism and vacation. Already before lunch, several people spoke with me and said they had the chance to visit our island, and occasionally, many times. Anyway, it’s a beautiful and attractive island. I believe this is also part of the vision of all the world and our future. Thank you very much.

Djauhari Oratmangun, Ambassador of Indonesia to China

Thank you very much. I think I’ve been to Hainan more than 10 times, even this year, two times already. I was there during the Boao Forum. And only two weeks ago, I was in Hainan with some of the Indonesian companies visiting Hainan, and I’m planning to bring some of them as well. So I would like to get in touch with you. And then I think some of the youth investors in Hainan come from Indonesia as well. In particular, Asia Pulp & Paper (APP) in Danzhou, I visited their company. They’ve been there for more than 20 years. So I met the mayor of Danzhou, etc.

Hainan is the sister province of Bali. So a lot of Indonesian students, like 300 or 400 Indonesian students, are pursuing their higher education in Hainan now. So I simply would like to inform you that I visited Cai House nearby Boao. And then Cai House, in fact, is constructed by Indonesian Chinese and then the grand, granddaughter of the Cai House owner is one of the famous governors in Indonesia now. So she’s planning to visit Hainan because it’s the 100th year of Cai House, it is one of the tourist objects near Boao. So I’m sending my advanced team to Hainan next month to discuss with you about the cooperation and visit between Hainan Island and the province of Maluku in Indonesia.

Number two, not only Indonesia, but ASEAN. We are working on the ASEAN with the RCEP, because some speakers mentioned about RCEP. RCEP was launched in Bali as well, back in 2011, and now 15 countries, except India. We would like to request India to rejoin again, because initially by 16 countries. I think the realm of trade—it’s like 30% of the global trade, to include population as well. I was at the chief negotiation of Indonesia during the launching ceremony in Bali in November 2011, so I know exactly. And then the last meeting, it was here in Beijing in 2018.

So now we are trying to open a cooperation, ASEAN, Indonesia, and Hainan, because of the Free Port zone. And then you are very close to us. Hainan already approached us to open their flight to Jakarta and then to other ASEAN cities as well. So a lot of things to cooperate between ASEAN Indonesia and Hainan.

One thing I forgot, if you go to Hainan, you will find the Bali flavour as well. It’s about one half hour. Because most of the Chinese overseas return to Hainan, coming from Bali and from some countries in Southeast Asia. They are the first ones to grow coffee in Hainan. Thank you.

Wang Bin

You mentioned this old building, in Chinese called Cai Jia Zhai (蔡家宅). It is a combination of traditional Chinese architectural style and Southeast Asian style—a very huge building. You’re welcome to visit it, just as you mentioned. Thank you.

Amakobe Sande, UNICEF Representative to China

Thank you. I did want to confirm I have been to Hainan, and it’s a very beautiful place. I come there for the Boao Forum every year. Thank you, Dr. Mabel and Henry, for inviting us.

I wanted to put on the radar the work of UN agencies, and I should indicate that we are very pleased to have the cooperation with MOFCOM. Because many of you may not know that UNICEF is the largest procurer of humanitarian supplies globally. With the benefit of the government of Denmark, we have the largest procurement supplies hub in Copenhagen, where we procure essential supplies for children: health, education, water and sanitation, anything you can think about.

And we are the largest procurer of all UN agencies in China. We have a platform of 140 Chinese companies that are suppliers of UNICEF to about 103 countries globally.

Our concern—and this is why a platform like this is so important for us—is that we’re always looking for the opportunity to do market shaping discussions so that we’re able to get the best possible quality of essential supplies for children. But a key factor is also optimising supply chains, and this has been a big issue for us, as you can imagine.

In that context, we are looking at hubs where we can pre-position essential supplies to get to children in the quickest possible manner, particularly where they are in a humanitarian context. One in five children is living in an active conflict zone. A billion children are affected by climate shocks. So looking at means to get supplies for children in the most efficient way, in the quickest way, is a concern for us.

And we have a number of hubs around the world. We are discussing hubs in China. Apart from the pre-positioning of supplies, we are also looking into the issue of hubs for processing or packaging those supplies. We have a famous product called “Schools in a Box.” Yes, you can imagine—a school in a box. We pre-package those in China for all schools in Afghanistan, for example.

So I’m putting this on the radar because, beyond UNICEF, the whole issue of market shaping, optimising supply chains, and greening supply chains is a big issue for us. I will be reporting to our Copenhagen Office. If there’s anything you’d like me to include—to convey the benefits of Hainan—I would be happy to do that.

But we also engage in exports. I attend events like CIIE, the Canton Fair, and the Changsha Expo, so that’s also an opportunity to connect with the broader ecosystem of potential partners for essential supplies.

I thought I should table that. But thank you, as always, for a very meaningful conversation.

Vebjorn Dysvik, Ambassador of Norway to China

Thank you very much for the presentation. It’s really nice to see the work you’re doing. I haven’t been there ten times—I’ve been there one time—but we do have a lot of cooperation between Norway and research institutions in Hainan, and also Norwegian companies that are interested in working on the green transition. You’re also doing great work on biodiversity and trying to run the whole line in a green way.

I was interested in one aspect of the opening up you talked about: you want to bring high-quality service industries, high-quality industries, and also let international universities set up independent branches at Hainan. And I know that there have been at least rumours. You talked about the internet cable that you have directly going to Singapore and Hong Kong, and there have also been rumours that you are also looking at—how should I say this diplomatically—looking into what kind of information environment you want to have in Hainan. How far has that come? Is there any news, or any impending news that you can tell us about that?

Tracy Huang

Talking about the data industry that you’re interested in, I think just now, we’ve introduced a new policy released by the central government last year to allow Hainan to have operators that can provide cross-border data transfer services to all companies located in the Hainan Free Trade Port. So it means much more convenient data transfers. For example, usually a country would have tighter supervision on data exports concerning privacy or national security. So our practice would be a little bit different.

For example, we have the pilot scheme for companies on the list, which are entitled to relaxed supervision. For example, if they are on the list, they don’t need to report each time they want to export data. They only need to make a commitment and then they can proceed. It’s like opening up this sector a lot more, and companies working with this pilot scheme could have a much more convenient transfer of data outside of Hainan.

Jens Hildebrandt, Vice President of Government Relations, BASF China

My name is Jens Hildebrandt. I’m representing BASF, German chemical company, but we are also an agriculture business. And you mentioned in your presentation on the four views that agriculture industry is very important, and that seed breeding is also one of your future industries. And for us, because on mainland China itself, there are some restrictions still on foreign investment in this area.

So my question is, I think last year, the central government released an Agriculture Plan 2024 to 2035. And I think in Article 19, it mentions that Hainan, as a free trade zone, will develop special mechanisms for foreign investors in this area. And my question is, what is the roadmap for that? Is there a timeline for that? Because that’d be really interesting for us, and I guess also our friends here from Bayer.

Wang Bin

Okay, this is a very specific area, so I think we can talk later.

Jens Hildebrandt

Sure, sure.

Wang Bin

Because it’s very professional. First, I think it is open in Hainan. But for details, we can talk later.

Jens Hildebrandt

Let’s do that. Thank you.

Evelyn Cheng, Senior Correspondent, CNBC

Thanks so much, CCG, for organising this event and for inviting me. I have, I guess, two questions. One just for maybe the representatives from Hainan. I was wondering if, given the latest U.S.-China tensions, escalation and de-escalation of tariffs, has there been any change in foreign interest in Hainan, or even Hainan as a sort of a port for maybe trans-shipments?

And then maybe for Director Zhang, you mentioned the impact of RCEP and how China’s companies might not be as aware as the benefits of this trade agreement. Is there a specific area that you think Chinese companies should increase their knowledge of how they could benefit? And maybe how that relates to Hainan? Thank you.

Tamas Hajba, Senior Advisor for China, OECD

Thank you very much, Henry and Mabel, for organising this event. And congratulations, Dr. Wang and your colleagues for all the achievements in Hainan. I’ve been there many, many times, attending all these events.

I have two very quick questions. Since I’m coming from the OECD, and you have been mentioning opening up and also convergence with international standards, also in the framework of your aspiration regarding the CPTPP, but also in the RCEP. What are the areas where you think that you will focus in this convergence or adherence to international standards in the future? And where would you see room for international cooperation?

My second question is also related to this. Hainan is having these special policies all over. And I think we can also see it as an experiment, a policy experiment. What would be the areas where you would see that these experimental policies would have the perspectives to be expanded to other parts of China? Thank you.

John Busuttil, Ambassador of Malta to China

Thank you. I just wanted to mention that a delegation from Hainan went to Malta. And I did not go to Hainan 10 times, but I went once, and it was very impressive. Also, especially from the green energy side and the efforts being done over there. But when the delegation went to Malta, they looked at the cruise terminal, and they were very interested in that. And also, when I was in Hainan, there was some talk about that, and I was wondering if that is moving ahead, and how that is getting along.

Tracy Huang

Thank you for all the questions and for your support and attention to the Hainan Free Trade Port. I think, yes, Hainan is like the new frontier of China’s opening up. It is offering more preferential policies than what China could offer elsewhere.

We’ve talked about preferential tax incentives and about the free and convenient flow of trade, investment, data, people, and transportation in order to, on the one hand, bring down the cost of business operation and on the other, provide new opportunities.

Each time the central government releases a new policy related to opening up, the Hainan Free Trade Port will always be there. If you consider that China already has 22 pilot Free Trade Zones, Hainan is the only Free Trade Port, and it has more open policies that can be offered to global businesses.

So that’s a very important point when you work with Hainan. Always pay attention—we will always be on the open list.

And then, of course, for some of the newly released policies, we still need specific measures to ensure they are delivered on the ground. We are working on that.

For example, in aquaculture, there is new planning for the coming years. And for the zero-tariff terms provided for imported goods, I think after we launch the independent customs operations at the end of this year, the policies will become even more open, and more categories of products can enjoy zero-tariff treatment when entering the Hainan Free Trade Port.

For the OECD question about standards. Just now, Professor Zhang talked about the combined effects of Hainan Free Trade Port policies and RCEP policies, for example. When we build the Hainan Free Trade Port, we try to align ourselves with the most open policies in the world.

We are learning from some of the most mature and highly developed Free Trade Ports in the world, including Hong Kong, Singapore, and Dubai. We’re trying to learn from them how they open their markets to foreign investors. We are trying to keep up with them. So it’s like what we said just now, we are leading in policies.

And we are trying to also build an enabling environment for businesses as well, in terms of enhancing our efficiency, in terms of providing very good service when they try to do business here.

So, in terms of how to connect with international rules, I think Mr. Yufei here is making policy for the Hainan Free Trade Port. This involves a lot of negotiations with central-level ministries as well as external partners. For example, because we are one of the 15 economies that joined the RCEP, RCEP policies can be applied within the Hainan Free Trade Port. Also, we have our own version of very preferential policies.

So when a company want to do processing or manufacturing here in Hainan, its products can either be exported to other RCEP economies, or they can be sold into the mainland Chinese market, meaning that companies, if they establish a business here, they can either benefit from the Free Trade Port or the RCEP policies. You choose either of them, which is more preferential for you.

Zhang Jianping

Regarding the utilisation of RCEP rules, on the one hand, many Chinese corporations or companies are not very familiar with this free trade agreement. They also lack sufficient awareness. On the other hand, the Rules of Origin (ROO) of RCEP are very complicated. You have to engage legal firms to support your contracts and to have your ROO certifications. For different RCEP economies, they have different internal procedures. That’s also a very important factor.

So in this regard, for the Chinese side, we are already promoting training courses for those corporations and companies, organised by MOFCOM, by China’s foreign trade promotion agencies, as well as by industrial associations and agencies.

And regarding the relationship between RCEP and CPTPP, actually, ten years ago in the United States, when I introduced my viewpoint on FTAP, the Free Trade Agreement of the Asia-Pacific Region, my perspective was that there might be different approaches.

The first one is TPP, the second one is RCEP—expanded—and the third one is that maybe TPP and RCEP could be combined together. In fact, the APEC Secretariat stated in Beijing in 2014 that there might be diversified approaches to FTAP.

Nowadays, China is already on the track of RCEP. Meanwhile, the Chinese side has also provided its application to join the CPTPP. If you are interested, you can find my paper, published ten years ago in both Chinese and English, discussing the distance between China and the TPP. You can find that China is a developing country, the largest developing country. So, if you look at China’s tariff barriers, non-tariff barriers, environmental issues, government procurement issues, intellectual property rights issues, and state-owned enterprises, in many fields, China needs to further explore reform and opening up in order to align more closely with the CPTPP rules.

Generally speaking, if you look at China’s official declaration from MOFCOM, we said we have already compared and analysed the distance between China’s domestic rules and CPTPP standards. The next step, after further reform and opening up, is that we hope that we can join the CPTPP. That means for the Asia-Pacific Region, our FTAP dream will come true in the future. Thank you.

Wang Bin

I would like to express my thanks to all participants for this wonderful event. I’m sure there are lots of questions. I’m very glad to hear so many questions. That means we attracted so many people’s attention to Hainan Island.

Finally, I would like to take this opportunity to introduce a decision. We will declare the exact date of the official launch of special customs operations sometime in the next half of this year. So please pay attention to our progress, especially over the next half year.

Some day, we will officially declare the operation of the special customs system. I’m sure this declaration will include many details about tariffs and things like that. The policies will mark the highest level of openness of the Hainan Free Trade Port to all of you.

And after this event, please take a look at the back of your chairs. There are some materials introducing the FTP. There is a QR code that links to the FTP One-Stop Policy Enquiry Platform. This platform includes nearly 200 initiative policies and detailed information on such policies. Just scan the code and you’ll find the details in English and Chinese.

Some gentlemen asked me how we are spreading these policies beyond Hainan and whether they can be replicated nationwide. We already have some results. I don’t remember the exact number, but around six policies have already been applied not only in Hainan FTP but also nationwide. That’s the function of our FTP: not only for our island itself, but also as an experimental area for all of the country, for reform and opening up.

In addition, there are also high-tech development directions and facilities, especially in areas like agriculture and aquaculture, which some gentlemen asked about. Anyway, we’ve established the National Seed Laboratory in Yazhou Bay. It’s a very high-tech lab construction with nationwide expert teams in this regard. So if you have the chance, we welcome you to visit the lab and explore opportunities for high-tech cooperation in Hainan as well.

Thank you very much.