Briefing on Construction of Hainan Free Trade Port at the SCIO Press Conference

（April 12, 2021）

Cong Liang, Vice Chairman of National Development and Reform Commission

Ladies and gentlemen,

Friends from the press,

Good morning.

In his important speech at the celebration of the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone on April 13, 2018, General Secretary Xi Jinping declared the Central Government’s support for Hainan to deepen comprehensive reform and opening up. On June 1, 2020, the Master Plan for the Construction of Hainan Free Trade Port was officially released and implemented.

After an in-depth study of the series of important remarks and instructions from General Secretary Xi Jinping on deepening comprehensive reform and opening-up and building the Hainan FTP, we feel deeply that this is a decision of profound significance and far-reaching impact. In its development, Hainan FTP must bring together high-quality production factors such as capital, knowledge, technology, management expertise, and data from around the world and serve as a role model for China’s high-quality development; it must drive deeper reform through a higher level of openness, and explore new paths and gain new experiences for improving the socialist market economy; it must foster internationally competitive institutions and systems for opening-up, and act as a major platform for China to better adapt to and utilize international trade and economic rules and take an active part in the rule-making process.

In the past three years, especially since the Master Plan was published and implemented, the Office of the Leading Group on Deepening All-round Reform and Opening up in Hainan, in conjunction with Hainan provincial government and relevant departments and in line with the plans and requirements of the Leading Group, has prioritized on system integration and innovation to promote trade and investment liberalization and facilitation and the efficient flow of all kinds of production factors. Through system integration and collaborative innovation, we have introduced a series of support policies and ensured a good start for the Hainan FTP development. By rough estimates, more than 110 policy documents have been issued, which helps put in place a preliminary policy and institutional framework for the Hainan FTP, the first of its kind in history. In general, these policies and systems can be categorized as follows:

First, policies for greater trade and investment liberalization and facilitation. We have developed a system for trade in goods that features zero tariff, and introduced a negative list and two positive lists. We have been experimenting with a system of “free flow through the first line and effective control at the second line” at the Yangpu bonded port area to manage inflow and outflow of goods for greater trade facilitation. We have published the negative list for foreign investment access and shortened it to 27 entries. Special measures for relaxing market access have also been introduced to promote greater investment liberalization. We have issued the catalogue of encouraged industries (2020 version) and 17 policy documents to support tourism, modern service and high-tech industries, broadening the scope for their development.

Second, policies for safer and more convenient financial support. We have drafted policy documents on providing financial support for deepening all-round reform and opening up in Hainan, and pushed for the formulation of a financial policy and institutional framework compatible with Hainan FTP. We have enhanced RMB convertibility and facilitated settlement in cross-border trade in goods and services as well as in new types of international trade. A quota of USD 5 billion has been approved, on a trial basis, for overseas investment by Qualified Domestic Limited Partner (QDLP). Hainan has also hosted China’s first trial of registration for overseas listing by domestic companies.

Third, policies for more efficient and targeted tax incentives. Companies in the encouraged category are entitled to a reduced corporate tax rate of 15%. High-end talents and highly-demanded talents employed in Hainan FTP are entitled to a personal income tax rate of 15%. Eligible companies are entitled to corporate tax exemption for income from overseas direct investment. We have improved the off-shore duty-free shopping policy for visitors, approved six additional duty-free shops, and allowed “delivery by mail” and “collect on return” services. We have crafted policies for VAT refund for transport vessels and tax refund at Yangpu Port of Departure. Domestic ships with both domestic and foreign trade goods on board which transit at Yangpu Port are allowed to refuel with bonded fuel. At present, we are also studying the tax exemption policy for overseas exhibits participating in China’s national-level exhibitions.

Fourth, policies for more convenient and open transport services. We have sped up the integrated development of ports and waterways in the Qiongzhou Strait, and intensified efforts to build a safer, more efficient, more convenient and cost-effective transport passage in the Qiongzhou Strait. We have set up a convenient and efficient ship registration procedure, and worked on establishing the “China Yangpu Port" as a port of registry. We have innovated management of cruises and yachts, by supporting the construction of a home port for international cruise liners at Sanya and promoting free yacht travel between Hainan, Hong Kong and Macau. We have supported Hainan in opening up the Seventh Freedom of the Air for passengers and cargo, and worked to upgrade Boao Airport into an international port.

Fifth, policies for more robust and effective production factors. We have expanded the scope and channels for visa-free application, and carried out a pilot program to reform international talents service and management. We have issued the classification standard (2020) and identification methods for high-level talents, as well as management measures for foreign talents practicing their professions in Hainan. we have opened up 38 professional qualification examinations for overseas personnel, and issued a one-way approval list of 219 overseas professional qualifications. We have carried out the International Internet Data Interaction Pilot Project, and built special international Internet data channels in 9 key parks. We have drafted policies on the lease and sale of standard land to ensure land supply with greater flexibility and efficiency.

Sixth, safeguards for more efficient and comprehensive policy implementation. The Draft Law on Hainan Free Trade Port has been deliberated at the 24th session of the Standing Committee of the 13th National People's Congress and is open to public comments. The first round of revisions to three laws and seven administrative regulations have been completed. In Yazhou Bay of Sanya and other key parks, we have formulated special regulations, new institutions and mechanisms for ecological preservation, and introduced a “one-stamp” approval system. We have developed 36 risk control measures to counter smuggling and other illegal activities. The environment for the development of Hainan FTP has improved significantly.

“Trees and grasses are greening and spring is on the horizon." With the implementation of these policies for Hainan FTP, the improvement of development environment in Hainan, and the gathering of market players, Hainan is sure to become a magnet for businesses and investors.