Tropical province beckons investors

Hainan's new opening-up drive is attracting increasing investment from overseas, with actual use of foreign capital in this South China's island province reaching over $319 million in the first half of the year, surging 98.69 percent year-on-year, local commercial authorities said.

China released a master plan for the construction of Hainan Free Trade Port on June 1, providing a long list of opening-up policies that aims to build the whole of Hainan Island into a globally influential free trade port by the middle of the century. The island covers 35,400 square kilometers, about 49 times the size of Singapore.

A total of 203 foreign enterprises were set up in Hainan from January to June, up 24.54 percent year-on-year, with 50 of them established in June. The investors came from 30 countries and regions including the United Kingdom, Singapore and the United States.

They include some of the world's top 500 multinational companies such as Britain's Rio Tinto Group, French energy giant EDF, and Charoen Pokphand Group from Thailand, officials from the provincial department of commerce said.

To overcome the adverse effects and difficulties from the COVID-19 outbreak, the provincial government introduced several measures such as tax cuts, postponed the payment of some taxes, offered government loans with interest discounts and guaranteed support.

This has helped small and medium-sized companies which include some foreign-funded firms to resume operations and boosted the confidence of foreign investors in doing business in Hainan, said a report from the provincial department of commerce.

"We've got strong support from the Hainan government," said Bing Wu, co-founder and president of aviation engineering company Bartini Technology (Hainan) Co Ltd.

He believes the preferential policies granted by the Hainan Free Trade Port master plan will help boost the future development of aircraft, especially in the fields of assembly, production, maintenance and training.

Local commercial authorities said they conducted close cooperation with foreign companies that have settled in Hainan such as Deloitte, Ernst & Young, KPMG and PwC to launch online Hainan free trade port policy promotions and project negotiations with their key overseas customers. They have reached preliminary agreements on a number of cooperation projects.

Frederick Mang, Hainan Office Lead Partner with Pricewaterhouse-Coopers Zhong Tian LLP, said the next step that PwC takes will make good use of its global network resources and professional advantages to provide all-round support for the development of Hainan FTP, including systematic solutions in some fields.

"We will continue to increase investment in Hainan, gather market capital and human resources, and mobilize more high-quality enterprises to develop in Hainan," said Mang.

The increase of foreign investment was also attributed to innovative promotions through online consultation platforms and a global investment service hotline (4008-413-413) which was launched in April by the Hainan Provincial Bureau of International Economic Development.

"The hotline has received more than 3,000 calls from 20 countries and regions, with potential overseas investors seeking policy information regarding the fields of finance, high-tech, healthcare, energy trading, shipping, cross-border e-commerce and many others. To date, 16 of the callers have completed business registration in Hainan," a bureau official said.

"German recycling company ALBA Group is very concerned about the construction progress of Hainan free trade port, and hopes to further expand investment in and cooperation with Hainan," said Cheng Chunlong, general manager of ALBA Shenzhou (Hainan) New Energy Construction and Development Co Ltd.

To date, more than 40 international and domestic conglomerates such as EY, Alibaba, Tencent, China Tourism Group, China COSCO Shipping Corp, China Merchants Group, Temasek, General Electric and Qualcomm have established their headquarters, regional headquarters or business units across the island, which now connects with 65 cities overseas through 103 international air routes.

Hainan will continue to optimize the business environment such as formulating a negative list of foreign investment to further relax restrictions on access to such fields as shipping, information technology, business services, medical care and education.

The island will also expand personnel training to improve service quality and arrange diversified promotions to encourage more foreign firms to settle in the Hainan FTP, local officials said.

They said Hainan welcomes foreign investment in such key projects as the Mission Hills World New Energy Vehicle Experience Center, the International Boutique Consumer Goods Exhibition Center, the tourism highway around the island and post station projects, and the Nanhai Pearl project's ecological tourist infrastructure.

Efforts will be made to improve the functions of the "single window", an integrated innovative platform for international trade where an enterprise can enjoy quality "package" government services and handle more than 20 businesses online.

Those services include company registration, foreign investment filing, foreign exchange registration, bank account opening and project approval or filing, the provincial commerce department said.

Hainan's foreign trade saw rapid growth in the past two years since China announced plans in April 2018 to build a pilot FTZ covering the whole of the island and explore the establishment of a free trade port with Chinese characteristics.

Hainan has trade connections with 189 countries and regions. The total value of foreign trade in the past two years ending this April hit 183.86 billion yuan ($26.31 billion), with exports up 51.3 percent and imports rising by 22.5 percent, Haikou Customs said.