Hainan FTP to improve Sino-ASEAN economic ties

A view of Sanya Bay in Hainan province. [Photo provided to chinadaily.com.cn]

The growth of the Hainan Free Trade Port will further enrich business ties and regional connectivity between China and the Association of Southeast Asian Nations members, creating favorable conditions for the expected implementation of the Regional Comprehensive Economic Partnership agreement next year, experts and business leaders said on Sunday.

The Hainan FTP and ASEAN countries are highly complementary in natural resources, capital, technology, markets, industry and human resources, which is conducive to the free flow of these factors in the region, and will expand the space for economic and trade cooperation, said Zhang Fei, vice-president of the Haikou-based China Institute for Reform and Development.

“With the reconstruction of global industrial and value chains, it would be fairly beneficial for Southeast Asian countries to establish a common market with the Hainan FTP, as it is geographically located at the center of China and ASEAN,” he said. “Apart from sharing China’s massive market demand, it is helpful for the two sides to consolidate the existing regional industrial chain.”

Addressing a subforum at the 87th International Forum on China Reform held in Haikou over the weekend, Zhang suggested that the governments of China and ASEAN countries draw on the established model of the APEC Business Travel Card program, to explore the launch of similar visa-free travel between Hainan FTP and ASEAN member countries.

The APEC Business Travel Card allows holders to use a dedicated immigration lane and enjoy streamlined immigration clearance.

Since the government has made foreign trade and investment more convenient and freer in the island province, the foreign trade of Hainan soared 60.4 percent year-on-year to 101.35 billion yuan ($15.82 billion) during the first three quarters of this year, exceeding its total exports and imports for 2020, and surpassing 100 billion yuan for the first time in the province’s history, data released by Haikou Customs showed.

ASEAN maintained its status as Hainan’s biggest trading partner, according to Customs statistics.

Chi Fulin, president of the China Institute for Reform and Development, said that China’s dual-circulation growth paradigm will enhance economic cooperation and trade between China and ASEAN members in the coming years.

Under the dual-circulation economic model, the domestic market is the mainstay while the domestic and foreign markets reinforce each other.

Because of the long-term growth of consumption in China, the country will not only be a major export market for ASEAN intermediate products, but also a major export market for consumer goods and services, he added.

French spirits group Remy Cointreau opened its first boutique store in the Hainan FTP late last week, as duty-free shopping on Hainan island is a crucial part of the dual-circulation growth paradigm and has constantly attracted global businesses.

“The total value of Hainan’s tax-free shopping reached approximately $5 billion by the end of 2020, making this place one of the world’s largest duty-free markets. The Hainan FTP will shape the future of retail, especially for premium brands,” said Nicolas Beckers, CEO of Remy Cointreau Greater China.

Wang Huiping, president of the Hainan Academy of Social Sciences, said the upcoming RCEP will lay the foundation for more intraregional trade and GDP growth when it comes into force.

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