This article was kindly contributed by Technode. For the original, please click here.

By Masha Borak

A survey has found that 85.2 % of app users in China have experienced data leaks, according to a report by the China Consumer Association.

For the vast majority of them (86.5%), the leaks resulted in receiving harassing calls and messages from sales departments and advertisers, while three quarters complained of getting calls from fraudsters. Among the top three complaints was receiving spam (63.4%), while other unwanted consequences included receiving illegal links and even account password thefts.

According to the Association, during the first half of 2018, illegal data collection from e-commerce and social platforms became a new hot spot for complaints. After surveying more than 4,400 respondents between July and August 2018, the organization published its findings in the “App Personal Information Leak Survey Report” on August 29th.

The survey comes while data leak scandals are appearing in local media on a regular basis. This week, local media uncovered what could be the largest data leak in the last five years with personal data and booking information of 130 million hotel customers offered for sale for 1 bitcoin.

The week before, media uncovered that a third-party developer for Chinese mobile operators—China Mobile, China Telecom, and China Unicom—hijacked over 3 billion pieces of user datafrom some of the country’s biggest tech companies.

The survey respondents said that the main blame for data leaks goes to app operators (62.2%), followed by illegal third-party resellers (60.6%), and loopholes in the network service system (57.4%.). Less than 35% of them said that the reason behind the leak were trojan horse viruses, phishing websites, and other means of data theft.

The survey brought up a long-running pain point for many of China’s app users. Nearly 70% of respondents believe that mobile apps request access to private data even though their functions do not require it. This includes requiring access to location (86.8%) and contact list (62.3%), call records (47.5%) and SMS (39.3%), camera (39.3%) and microphone recording (24.6%).

However, the survey also showed that the rate of reading through user agreements and privacy policies before installing apps was quite low—only 18.1% of respondents said they do it regularly.

Awareness seems to be growing: 60% of respondents adopted some measures to protect their personal information, whether it was omitting certain information, turning off personalized location-based services, denying access to apps, installing protective software or simply giving false information. This echoes the findings of a survey by Tencent’s research arm Penguin Intelligence this month which found that the majority of internet users in China are paying more attention to data privacy.

The two key concerns for the respondents were that leaked data would be used for fraud and theft (70.5%), resold to third parties (52.4%) and used for spam calls (37.7%), while only 6.6% of respondents cared about their reputation being damaged.

Over 80% of respondents said more should be done to secure data. The Association concluded that the main reasons for lack of data security when using apps is personal security awareness and lack of supervision. The latter could be mitigated with an app check system and blacklist, the report concluded. Unfortunately, the problem is not limited to China.

By Timothy Ang

The emergence of the housing rental market could be the next major development in China’s dynamic but troubled real estate market. Inflated property prices and a young population moving away from traditional aspirations of home ownership has opened the door for companies willing to offer an alternative to the classic house-hunting experience. One startup that has made its name in this space is Ziroom.

Starting out as a small-scale project nestled under the umbrella of Chinese high-street real estate agent Lianjia, Ziroom is now a frontrunner in the market for so-called “branded rentals,” defined loosely as properties refurbished according to a standardised template and supplemented by various add-on services such as cleaning. Since going live in 2011, Ziroom now offers over 500,000 listings to some 1.2 million tenants across China, according to estimates by the Wall Street Journal, and shows few signs of slowing down.

Ziroom was spun off from Lianjia in 2016, allowing it to consolidate its remit as a leading provider of branded rentals to China’s newly-graduated urban millennials, as well as seek funding sources independently. In January, Ziroom raised $621 million from an investment group led by Warburg Pincus and which included major players such as Tencent and Sequoia Capital. The fundraising round gave Ziroom a $3 billion valuation, making it China’s first rental housing “unicorn” (startup worth $1 billion or more).

The company’s extraordinary growth is testament to the rapid social and economic changes taking place in today’s China. Forecasts by financial firm Orient Securities Co estimate the house rental market in China will reach Rmb 4.2 trillion ($664 billion) by 2030—that is almost 1.5 times the country’s total rental income and equivalent to about half of all home sales last year.

Firms like Ziroom have ridden a wave of favourable policies from Beijing, for which a stronger rental sector fits neatly with its goals of cooling the overheated property sector. The average house price in Beijing, Shenzhen and Shanghai is now over 40 times higher than the per capita annual income level in those cities. That is higher than any other major city in the world, and more than double the level in Paris and New York, according to the Financial Times. And while there has been evidence that the property market is cooling in China’s top-tier cities in recent months, prices in many smaller cities are still skyrocketing at double-digit rates.

In response, the government has begun rolling out a number of incentives designed to make renting a more attractive option. For tenants, protections against unwarranted rent increases and evictions have been put in place and pensions deposits have been made available as a cash source for renting purposes. Property owners, meanwhile, have been given tax deductions if their income falls beneath Rmb 360,000 ($54,000) per year. Rental companies can also trade publicly much more easily thanks to a lowering of the requirements for REIT (Real Estate Investment Trust) status. Mofang was the first company to take advantage of this, issuing the first securities backed by future tenant payments in January 2017. Seven months later, Ziroom raised 10 times that sum.

But a friendly regulatory environment is just part of the story. Ziroom is also tapping into deeper cultural factors pulling young Chinese to the rental market.

Whereas for older generations – and indeed still the majority of millennials – buying a house is considered both a proxy of success and often a prerequisite for marriage and a family, more and more youngsters are craving flexible housing arrangements that suit an increasingly experience-driven lifestyle. Popular online property directory 58.com estimates that of the 190 million tenants in China’s cities, 95% belong to the millennial “do not buy” generation.

For these customers, renting leaves open the luxuries of changing jobs, moving to a new city, and in light of China’s skyrocketing house prices, more disposable income to enjoy the urban lifestyle. In a survey run by the Chinese Academy of Social Sciences on 1,400 recent college graduates, over half said they would choose long-term rental over the financial constraints that come with monthly mortgage payments. Only a third opted for home ownership at the cost of a higher standard of living.

Ziroom has made this millennial mind-set the core of its business model. The company’s Chinese name – 自如, zi ru, or “care free” – sets out a clear target market and philosophy for potential customers. Upon creating a profile on the app, “Ziroomers,” as they are known, are inducted into a huge, active online community where apartment-seekers can chat, shares stories and reviews, and even attend offline social events. In a demographic where mobile phones are used in every facet of one’s daily life, a strong, relevant online service is essential.

The Ziroom app provides millennials with the kind of frictionless, mobile-centric experience young people have become accustomed to through using food-delivery apps like Ele.me or online-payment services such as Alipay and WeChat Pay. Users can browse a directory of newly refurbished listings, arrange viewings and upload employment and credit information provided by Alibaba’s Ant Financial through the app to finalise a deal with a minimum of hassle.

Ziroom tenants can also choose from a range of add-on services that help provide them with the care-free urban lifestyle they are seeking. The company currently offers four product types. Its two core branded rental options, “Friendly Home” and “Full House,” were the first products that allowed Ziroom to distance itself from the standard services of under-furnished, “bare-bones” properties listed by other property agents. Tenants have the option to select their bedroom furnishings and are eligible for Ziroom-provided services such as cleaning and trash collection. This holistic approach to rentals was taken to the next level in the most expensive and recent tier, which offers living units in a larger co-living space like an apartment block. Based on the WeLive concept developed in the US, tenants here have access to social spaces such as lounges or cafes and properties are exclusively found in areas of high foot traffic with cheap restaurants and supermarkets nearby – the natural habitat of a Chinese urban millennial. 

Convenience for the property owners is similarly placed at a premium. Ziroom takes over much of the hassle of property management from landlords in return for a fee, which can range from 5% to as high as 60% of rent payments. All payments, repairs or complaints can be made through the app’s messaging service, to be dealt with by Ziroom staff, so owners have greatly reduced responsibility for basic maintenance. Ziroom even promises to cover 15 days’ worth of rent in the event of a property lying vacant.

Nevertheless, as with any maturing market housing, rentals could be on the verge of becoming a much fiercer competitive space, threatening the long-term profitability of players like Ziroom if they are unable to adapt. Rising rental costs in major cities are pushing agents to get in early and sign longer contracts with developers in more expensive areas, despite the cost of higher capital expenditure and higher vacancy risk in an industry that already operates on small, precarious margins.

There is also the threat from traditional real estate developers increasing their exposure to the rentals market, especially if there is expectation that the government will move to place a tighter lid on home purchases. Firms like Port Apartments, owned by real-estate giant Vanke, benefit from massive scale and experience, allowing them to build and rent out huge volumes of living space at low construction costs. Launched just three years ago, Port Apartments already manages 100,000 listings in 18 major Chinese cities.

To hold on to their market share, the likes of Ziroom may need to double-down on their USPs of multi-tiered products and add-on services while taking a hit to profitability. Headwinds may be accumulating for the startup, but the confidence shown by big-name investors in this year’s fundraising round coupled with a youthful, innovative company culture suggest Ziroom is in a good position to weather them.

This article was kindly contributed by Technode.com. For the original article, click here.

From Alibaba to JD, China is not short of e-commerce powerhouses. Although the country’s e-commerce market is highly consolidated, it’s not impossible for startup teams to crack this market as long as they are solving the right problems for the right group of customers.

Chinese social e-commerce platform Pinduoduo just proved this. The Shanghai-based company filed for a massive $1.6 billion IPO on the US stock market on July 16th, making it one of the largest deals of the year. Excitement is quickly intensifying surround the company, which managed to boost its sizeable success in China’s highly competitive e-commerce market within three years.

What is Pinduoduo and what has it done right?

Like Taobao and JD, Pinduoduo is an e-commerce platform that offers a wide range of products from daily groceries to home appliances. Pinduoduo’s twist lies in its integration of social components into the traditional online shopping process, which the company describes as the “team purchase” model.

By sharing Pinduoduo’s product information on social networks such as WeChat and QQ, users can invite their contacts to form a shopping team to get a lower price for the commodity. The mechanism keeps the users motivated and better hooked for a more interactive and dynamic shopping experience. Coupled with other incentives such as cash, coupon, lottery and free products, Pinduoduo managed to acquire users at a very low cost. Together with the extra satisfaction of scoring a good deal with your friends as a team, Pinduoduo soon went viral in China.

Extremely low prices are another compelling attraction of Pinduoduo. The discount is usually up to 90%, including everything from RMB 10 bed sheets to RMB 1000 PCs. But the bestsellers are daily groceries at unbelievable low prices. More than 6.4 million units of tissue paper were sold at RMB 12.9 for 10 boxes and 4.8 million umbrellas were purchased at RMB 10.3 apiece.

The company’s bulk-selling model easily creates huge orders for the sellers and leaves them more room to cut prices. At the same time, Pinduoduo’s app is designed to facilitate this, an expert explained to local media: “Taobao’s interface is search-based and centered on multiple product displays, while Pinduoduo’s is more similar to a news feed and thus gives more exposure to a single product and easy to create “爆款” [baokuan, meaning viral items]. Taobao has more products listed, but Pinduoduo put its focus on fewer bestsellers that attract more buyers.”

Pinduoduo (l) and Taobao (r) interfaces

Pinduoduo’s C2B model allows it to ship directly from the manufacturers eliminates layers of distributors, not only reduces the price tag for buyers but also raises the profit of manufacturers. This approach is particularly effective for the sales of perishable agricultural and fresh products, where the speed for matching supply and demand is critical.

Lesser-known brands were chosen over famous brands to erase any premium that comes from branding. Additionally, the costs for advertising and marketing are also lowered through user sharing to social media. The approach is both cost-saving and effective. Through social sharing, users are sending the product information precisely to friends and groups that may have similar income and consumption preferences. Viral marketing is a more clever way to build the identity of all the lesser-known brands on its platform. Financially, the platform could even out part of discounts with less marketing budgets.

Price and social features are not only the only paths to Pinduoduo’s meteoric rise—spotting the right user profile is the last piece to the puzzle. Operation director of Chinese mobile e-commerce platform Chuchujie, Yang Lin shot to the core of the problem in an interview with local media: “Taobao has over 500 million users while WeChat has over 1 billion, the gigantic missing group between two of China’s giant apps is distributed in third- or lower-tier cities, mostly senior citizens. This group, which only recently came online and depends on the ubiquitous WeChat as the chief source of information, is the target users of Pinduoduo.”

Data from research institute Jiguang shows that users from third- and lower-tier cities account for around 65% of Pinduoduo’s total user base, while JD’s users in first plus second-tier cities and the rest of China were half-and-half.  Additionally, females account for 70% of Pinduoduo’s user base. They are responsible for family purchases and more price sensitive. This guarantees more active sharing and purchases.

User demographics and average order value of JD, Taobao, and PDD (Image credit: GGV)

Consumption upgrade, a trend in which affluent Chinese customers are increasingly willing to pay for quality, has dominated China’s e-commerce industry in the past few years. Taobao and JD’s globalization initiatives to bring overseas quality products, the boom of cross-border e-commerce sites like Red and NetEase Yanxuan and Kaola are all based on the consumption-upgrading backdrop.

But the growth of Pinduoduo has sparked an argument focusing on whether the platform represents consumption downgrading. Maybe consumption upgrading or degrading isn’t the key problem. It is just one more piece of evidence for how big and segmented the Chinese market can be. Rising income may give part of Chinese urban citizens the freedom to vote for quality, but RMB 1 difference in price tag may still be a big concern for their countryside counterparts, who have been neglected so far.

Cost performance is still the most important factor to consider for consumers. A higher price tag does not necessarily represent the better quality or vice versa. The huge potential in this often-overlooked market is luring more competitors. Taobao launched Taobao Tejia, a dedicated app for China’s low-end users.

Pinduoduo didn’t invent the social e-commerce model. Groupon pioneered the group-buying concept years ago. But it is succeeding thanks to a new ecosystem consisting of super app WeChat, mobile payment infrastructure, and mobile-first users.

Pinduoduo’s history and major milestones

Founded in September 2015, Pinduoduo is the fourth startup of Colin Huang, an ex-Googler who once worked on early search algorithms for e-commerce. His previous startups include consumer electronics e-commerce site Ouku.com, Leqi, e-commerce platform marketing agent service and a WeChat-based role-playing game company.

With experiences in both e-commerce and gaming, Huang founded Pinduoduo with a vision to combine the secret success recipe of both Alibaba and Tencent, the two Chinese internet giants known for their e-commerce and gaming /social dominance respectively. “They don’t really understand how the other makes money,” Huang said to Bloomberg.

Huang seems to be right about how the two industries can work together. Pinduoduo’s annual GMV (gross merchandise volume) surpassed RMB100 billion in 2017, that’s around two years since its inception. To hit the same milestone, Taobao took five years, VIP.com took eight years and JD ten years. Pinduoduo now claims more than 343.6 million active buyers with an annual GMV of RMB 262.1 billion.

A huge turning point occurred in the third quarter of 2017 when the weekly active rate, penetration rate, and open rate of the Pinduoduo app all surpassed those of JD. Compared to the previous year, it reaches up to 1000% year on year growth according to Jiguang’s data.

Image credit: GGV Capital

Steep growth trajectory lured financial backings. In 2015, Huang launched Pinhaohuo, a social commerce platform for fruits, with the team from his second startup Leqi. His gaming startup incubated Pinduoduo.

Four months after Pinduoduo received undisclosed A round from IDG and Lightspeed China in March 2016, the company secured over $110 million in Series B financing four months later from Baoyan Partners, New Horizon Capital, Tencent, and others. In April 2018, Pinduoduo completed a new round of financing raising $3 billion at a valuation of nearly $15 billion. Given Pinduoduo’s WeChat-based ecosystem, Tencent joined the round as a returning investor.

Given the history between Pinduoduo and Pinhaohuo, then of the two largest players in the social e-commerce sector, the two companies merged to form one dominator.

Another counterfeit heaven in China?

“If you close your eyes and visualize the next stage for Pinduoduo, it would be a combination of ‘Costco’ and ‘Disneyland’, driven by a distributed network of intelligence agents,” Huang said in his letter to shareholders. Huang’s comparison was thus interpreted as a combination of “value for money” and entertainment, but many are questioning whether or to what degree Pinduoduo can live up to the founder’s expectation.

Although Pinduoduo claims to have several channels to lower product prices, increasing product quality and counterfeit complaints still raise concerns for a possible low-cost and low-quality association. The percentage of complains on Pinduoduo is 17.87%, and the user satisfaction rating is only 1 star, according to the 2017 National User Satisfaction Survey of Major E-commerce Platforms released by the China E-Commerce Research Center. Complaints mainly target at the problems of poor quality, slow delivery, misleading ads, etc.

In addition to mounting domestic complaints, the Chinese shopping app was hit by a trademark infringement lawsuit in the US, shortly after filing for a US IPO. Alongside Alibaba and JD’s efforts to remove fake goods on their platforms, fake goods are flooding to emerging e-commerce platforms like Pinduoduo and Weishang, according to Alibaba.

As Pinduoduo prepares for a listing, the firm is following the e-commerce giants in cleaning up the platform. According to the company’s annual consumer rights protection report for 2017, it has taken down 10.7 million problematic listings, blocked 40 million suspicious external links, representing 95% of the fake good sellers from the platform. The company set up an RMB 150 million fund to deal with after-sales disputes.

But tightening regulation is causing more friction between Pinduoduo and its merchants on the platform. In June, fourteen store owners who sell products on Pinduoduo protested under the company’s office building claiming that Pinduoduo conducted improper product-quality checks which damaged the owners’ rights. Company founder Huang insisted Pinduoduo’s decision and punishment of the owners is just and fair.

Many also questioned the validity of entertaining features in Pinduoduo’s value proposition. “We have observed that a few users find shopping on Pinduoduo to be very entertaining, which is attributable to its extremely low pricing and interaction among Weixin users,” according to research institute 86 Research.

IPO and beyond

Pinduoduo went public on NASDAQ market on July 26 and raised more than $1.6 billion with a valuation of $60 billion. However, shareholders should still be concerned about the company’s fundamentals

Financially, the company is still in the red. Pinduoduo suffered a net loss of RMB 292 million and RMB 525.1 million in 2016 and 2017, respectively. Its net losses reached RMB 201.0 million in the first quarter of this year. The net loss is expected to be widened, mainly attributable to investments in branding and ads. Over 88.4% of Pinduoduo’s RMB 1.2 billion Q1 revenue was spent on marketing. This could be translated as a sign of difficult traffic acquisition.

The most typical Pinduoduo users are price sensitive women that reside in low tier cities. Merchants are selling at a low price to appeal to this group. But how to maintain these users and its growth momentum is a big challenge for Pinduoduo now given rising product quality complaints.

“The retention rate is a big challenge of Pinduoduo, implying potential GMV slow down. Pinduoduo will have difficulty in upgrading to a marketplace of premium products because of its user demographics and brand image,” according to 86 Research.

This article was kindly contributed by Technode. For the original, please click here.

Self-driving cars are a big deal in China. The country’s three tech giants—Baidu, Alibaba, and Tencent (BAT)—are all working to develop the technology. In support of these companies and the many other startups operating in the autonomous driving space, the Chinese government is even working on a draft bill mandating that 50% of all vehicles sold by 2020 be autonomous or semi-autonomous.

Despite the government’s optimistic outlook, Didi CTO and co-founder Bob Zhang believes that mass adoption of self-driving vehicles is at least a decade away.

“I think there are two ways to commercialize autonomous driving technology,” Zhang told attendees at RISE in Hong Kong.  “First, enter into a rideshare network to provide services to passengers. Second, to sell self-driving cars to consumers. The second way will not happen on a very large scale in the next ten years.”

He believes that it is not a lack of interest in the vehicles that will limit adoption, but technological hindrances.

“The reason behind that is it still needs a long way to go before the technology is mature enough to drive safely in any weather conditions and any road condition,” he said. “During this time it does not make sense to have a self-driving car which can only drive on sunny days or good road situations.”

This doesn’t mean that Zhang believes the vehicles won’t be used. He explains that given ride-sharing companies know your origin and destination, they can decide whether the conditions are right to dispatch an autonomous vehicle.

“If we are confident we will dispatch this request to a self-driving car. If we are not we will dispatch to a human driver,” he said. “That, in my mind, is the mixed model between human drivers and self-driving cars.”

Zhang also claims that by the time autonomous cars are ready for mass adoption, consumers would have moved away from a vehicle ownership model. “The relationship between people and the vehicle will be redefined. Fewer people will choose to own a car, but just share one.”

Additionally, the car, along with all its sensors, will go from being a passive part of smart infrastructure management to a comprehensive array of sensors that will report road conditions to relieve congestion, something that Zhang said Didi is already working on today.

“The core technology behind that is Didi has the ability to predict the queue length of the vehicles ahead of every crosswalk. For example, if a Didi vehicle stops 10 meters ahead of the crosswalk we can predict there will be three vehicles ahead of it,” he said. 

According to a report by Deloitte, China currently has over 500 smart city projects, with Internet of Things (IoT) platforms being an agent of change in the country’s urban spaces. These IoT devices collect data from around the country’s cities, helping to increase the flow of people and traffic, and attempting to improve the lives of a city’s residents. More data being collected from cars will not only result in better training data for future autonomous vehicles but also data to improve the general state of cities and their roadways.

By Colin Peebles Christensen

The government of Hainan, China’s tropical southernmost province, announced in June that it was about to punch a hole in the Great Firewall. Internet censorship, currently tightly controlled by Beijing, was to be partially relaxed for foreign visitors in designated tourist areas in Haikou, the provincial capital, and Sanya, one of the island’s most popular destinations. This would open up access to currently blocked sites such as Facebook, Youtube and Twitter for the first time in about a decade.

The policy was a surprisingly radical move by the Chinese leadership, seemingly signalling an increased commitment to the stated goal of liberalising the island province’s economy — a drive designed to transform Hainan into an international tourism destination and a free-trade hub. The province has long lagged behind the rest of the country, especially the nearby economic powerhouse of Guangdong.

But the move toward partial internet freedom has already hit rocky ground. Chinese social media erupted, with Weibo users lambasting the foreigners-only internet policy as racist and discriminatory. Within a day, the plan was scrubbed from the local government website, Business Insider reported. The reversal is perhaps a sign that the planned overhaul of the island’s economic system might not be without hiccups.

The current blueprint for travel industry reform in the province is the “Hainan Tourism Development Master Plan (2017-2030)”, which has Hainan pencilled in as a “world-class resort island” by 2025 and a “world-class international tourist destination” by 2030. The government first set the target of making the island a global tourism destination in 2010. However, after peaking at 33.2 million visitors in 2012, the province experienced three consecutive years of declining tourist numbers between 2012 and 2016, according to China Daily — a problem attributed partly to the country’s restrictive visa policies and the lack of international flight connections. Last year, 67 million tourists visited the island, double the visitor numbers of 2012, but only 1 million of them were foreign visitors, according to South China Morning Post.

On May 1 this year, China addressed the issue by launching 30-day visa-free visits for citizens of 59 countries, an upgrade from the existing 15 and 21-day visa waiver policy in place since 2010 for group travellers. And the first regular direct flight to Europe took off last week (July 12). It will fly between Sanya and London twice a week.

Xi Jinping made it clear at the Boao Forum in April, however, that the tourism drive is only part of a much broader and more ambitious economic masterplan for the region. The event itself, hosted annually in the tiny town of Boao in eastern Hainan, is considered Asia’s answer to the World Economic Forum in Davos and has helped lift the province into the global conversation on economic development.

At the conference, which marked the 30th anniversary of the founding of Hainan province, Xi outlined two key goals, including the construction of a free trade pilot zone by 2020, and establishing and developing a free-trade port system from 2025 to 2035. Exchanges in international energy, shipping, commodities and carbon trading will also be established on the island, according to China Daily. It will be China’s 12th free-trade zone, and with an area of 35,000 square kilometres, Hainan is projected to become the world’s largest free-trade port once completed, according to South China Morning Post. If successful, it could challenge the dominance of Hong Kong and Singapore in the region.

Hainan was separated from Guangdong in 1988 to form its own province and was simultaneously set up as the country’s fifth Special Economic Zone. But while money and migrant labour poured into the island and thousands of jobs were created, Hainan’s suddenly hot economy led to a local property bubble instead of to the successes of other Special Economic Zones such as Shenzhen. Many people packed up and left when the bubble burst in 1993.

Hainan now ranks 22nd out of 31 provinces and cities in terms of GDP, according to statistics from 2017. The province’s per capita disposable income lags slightly behind the rest of the country, with 22,553 yuan, just below the national average of 25,974 yuan. The province attracted less than US$10 billion in foreign investment in the five years running up to 2017. That is only 1.5 per cent of the country total during that period.

A “100-Day Campaign to Attract Businesses”, launched in May, has been designed to open up the economy to foreign investors — a crucial step in the the roll-out of the free trade zone. The initiative will run until late August and is specifically aimed at encouraging Fortune 500 companies to set up regional headquarters on the island. Meanwhile, Hainan will grant permanent residence rights to skilled foreign workers and their family members, in an attempt to address the continuing shortage of professional talent in the province. Subsidised housing and the opening of a “green channel” for easier transfers of income overseas will further encourage the target enrolment of a million skilled workers by 2025.

According to figures published in China Daily this month, 27,000 new businesses and 62,800 new jobs were added to the economy during the first six months of the year, with urban and rural incomes growing at 8.3% and 8.5% respectively.

The plan is an ambitious. The liberalisation drive has the potential to boost the economy of a province currently trailing behind, while a free trade port could reshape the region’s existing free trade infrastructure. Perhaps more importantly, the economic overhaul of the province will be closely watched by Beijing as a testing ground for China’s economy as a whole, currently slowing down and in need of reform. Hainan has struggled in the past. Its future success may depend on how committed the leadership is to reform and opening — other than on paper. As the recent walk-back on internet freedoms suggest, there will likely be other speedbumps along the way.