MNI INTERVIEW: Hainan Green FTZ to Attract EU Investors - NPC
MNI (BEIJING) - The island province of Hainan plans to launch China's largest free-trade port this year despite rising U.S. trade tensions, with officials expecting the island’s green development credentials will attract European companies, a senior provincial official told MNI on the side lines of this year’s National People’s Congress.
Hainan’s strong environmental standards should boost European investment given the bloc's focus on importing low-carbon manufactured goods, said Cai Qiang, a delegate to the NPC, where the Government Work Report set out plans to accelerate the Hainan Free Trade Port and encourage foreign direct investment.
Last year, Hainan Province reached renewable energy capacity of 83%, higher than the country-wide 56%, demonstrating how the green transition aligns with the EU's carbon neutrality goals, said Cai, who is also director of the Hainan Provincial Department of Finance.
“Fast commercial growth was also expected with South-East Asia countries given geographic proximity,” he added.
The island’s 15% tax rate for both corporate and personal income, together with zero percent trade tariffs, would further attract international investors, he said in an interview.
Beijing will fancy its chances of drawing the European Union away from its China de-risking strategy as the bloc faces disputes with the U.S., a senior Chinese policy advisor recently told MNI. (SEE MNI: U.S. Policies Will Push EU, China Closer - Senior Advisor)
OPENING UP
Just as the U.S. is withdrawing from globalization, Hainan will lead China in its next phase of unilateral opening and liberalization, Cai said.
The province will test reforms and policies needed for Beijing to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a key objective outlined in Premier Li’s work report this year, Cai stated, noting successful measures could then be rolled out nationwide.
Hainan’s duty-free shop retail sales declined by 29% last year as weak post-Covid domestic demand, a matter the government sought to rectify this year with additional stimulus measures, Cai continued.
“This year we plan to issue over CNY200 million in offshore duty-free consumption vouchers to support sales this year,” Cai said, adding that authorities would make efforts to guide prices lower than standard retail and reduce transaction wait times at the cashier.