China has announced plans to establish a free trade zone on the tropical island province of Hainan by 2020 and will encourage multinational businesses to set up their headquarters there, Reuters reports.
The announcement, published jointly by the Communist Party and State Council, comes days after President Xi Jinping’s speech at the Boao Forum, a high-profile economic summit held at a resort in Hainan, in which he said China would grant firms greater economic freedom on the island.
The government will set up an investment fund to support the development of a free trade port in Hainan by 2025. As Xinhua points out, a free trade port is “the world’s most open form of economic zone.” The model has been used in other regional hubs including Hong Kong and Singapore.
Hainan is famous across China for its sandy beaches and its economy is currently heavily reliant on tourism. It is also home to HNA, the Chinese conglomerate that began as a Hainan-based airline but has since embarked on a huge debt-fueled investment binge that saw it take stakes in high-profile global brands including Hilton Worldwide and Deutsche Bank.
The Chinese government’s plans for the province will include phasing out sales of gas-powered vehicles to protect the environment. It will also allow sports lottery games and horse-racing on the island, in a sign that tourism will continue to be central to its economy.