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Hainan: the southern island gets a new Free Trade Zone

The southern island gets a new Free Trade Zone

Hainan is an island located off the south coast of Mainland China. The province is known as the Hawaii of China due to its sandy beaches, lush forests and tropical climate. Over 67 million tourists visit Hainan last year, with several hundred thousand coming from abroad, helping its tourist industry to grow to US $13 billion. Traditionally, Hainan’s economy has been dominated by agricultural and tourism but it is now rapidly growing into a healthcare hub. Deng Xiaoping made Hainan a Special Trade Zone (STZ) back in 1988 and, in 2013, the State Council approved the ‘Hainan Boao Lecheng International Medical Tourism Pilot Zone.’

The Pilot Zone aims to boost medical tourism with a focus on franchised medical care, health management, rehabilitation care, medical beauty and anti-ageing services. The Zone covers 20 square kilometres and will be built on a low-carbon, low-emission model. Located along the Wanquan River near Qionghai City the Zone will be near Boao – the area that holds the Asia Boao Economic Forum, known as the Davos of the East.

As well as providing medical tourism, the zone aims to become a leading national medical science research base. The Pilot Zone includes a number of preferential policies, including faster import registration of medical products and medicines, a special import tariff for foreign medicines, a three-year practising period for foreign physicians and it will allow foreign investors to invest in medical institutions. The Boao Lecheng Pilot Zone is a demonstration project for the nation’s healthcare reform that might be rolled out across other cities in the future.

The province will develop into a pilot Free Trade Zone, and a Free Trade Port would be established

Last month one of the first major hospitals opened in the Pilot Zone. The Boao Super Hospital will offer high-end medical services to the public. The private hospital is one of 27 projects that have opened or are under construction in the Zone that are expected to be complete in five years.

At the end of April, President Xi Jinping said, at an event to mark the 30^th anniversary of the establishment of Hainan’s Special Economic Zone, that the province would develop into a pilot Free Trade Zone, and a Free Trade Port would be established. The news caused shares in many Hainan based companies to rise significantly. State news agency Xinhua said the pilot will focus on sectors including agriculture, medical care, sports, telecommunication and finance. It is expected that the Free Trade Port will be up and running by 2025 and fully established by 2035.

The Free Trade Port will also allow duty-free shopping, which is expected to further boost tourism. The pilot Free Trade Zone will also allow horse racing and sports lotteries. While Beijing bans all forms of gambling, horse racing is not illegal and China runs two types of lotteries.