Hainan: space base, freeport, and consumer expo
China arrived on Mars with the Tianwen-1 mission, which landed on May 15 on the red planet and departed from the Wenchang space base on the island of Hainan.
The island province is increasingly vital in Beijing's strategies: technology, space research, free trade, luxury tourist destination, and free port to promote consumption and test new investments.
During 2020, with its borders closed to international travel, Hainan has become the leading Chinese luxury tourism destination. It is generating the most significant turnover in the world in local stores of major international brands.
In 2021, China organized the first consumer fair, right on the island of Hainan in the capital city of Haikou. The China International Consumer Products Expo was scheduled from 7 to May 10 by the provincial government and the Ministry of Commerce to promote the Hainan project as a new free trade zone.
According to Xinhua, the fair saw the participation of 2,500 brands, including over 1,300 from abroad, and Italy participated with more than 50 brands, including Armani, Valentino, Sergio Rossi, Etro.
The fair featured yachts, high-end products, clothing, cars, and every main consumer product. During the Expo, the Hainan Design Week of November 2021 was announced, with Italy as a partner country. It estimated that over 100,000 visitors would be in the city by Haikou.
The province was launched as a Free Trade Port and aimed to liberalize and facilitate trade, investment, international financial transactions to become a model free trade area.
China has built its growth with long-term strategic plans, accurately calculating sectors, regions, and methods ideal for its development. The investment plan in Hainan province confirms Beijing's attention to the entire area, which includes the southern provinces, and the sectors promoted in the development of the island are: high technology, tourism, agriculture, medical, education, culture, logistics, construction, finance, and energy.
China has promoted the island as a new Free Trade Zone from June 1 2020, with a long-term project that will lead the entire province to be a free port by 2025. The purpose of providing preferential policies for cross-border investments, lower taxation, and requirements for the simplest visas.
Companies registered in the territory and active in sectors incentivized by the government can benefit from an income tax rate of 15%, lower than the ordinary rate of 25%. In addition, by 2025, the entire island will be duty-free, as is the case for the Hong Kong Special Administrative Region. Today, the special policies are tested in the Yangpu Bonded Port area and then extended to the entire territory of the island.
Economic activities that will guarantee an added value produced locally of at least 30% in the processing of goods will also ensure zero duties on imports from Hainan to mainland China.
Taxation for highly skilled, talented foreign managers and professionals is 15%, guaranteeing the most advantageous individual tax regime in mainland China.
Hainan is adjacent to Guangdong, the province with the highest population and GDP in China. In 2020, the province of Hainan recorded a gross domestic product exceeding 553 billion yuan (80 billion dollars), equal to the economy of Sri Lanka. An increase during the pandemic period by 3.5%, higher than the national performance confirmed at + 2.3% for China in 2020.