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Hainan

Tourist & Agricultural Island

Hainan province includes over two hundred islands off of China’s southern coast in the South China Sea, with Hainan island (30 miles off the coast of Guangdong) accounting for 97 percent of the province’s land area. China’s smallest province and largest special economic zone, Hainan is at the same latitude as Hawaii, Bali and Phuket and has developed into one of China’s prime resort areas, the “oriental Hawaii.” Other industries in the province are predominantly agricultural. The gross output value of Hainan’s fishing industries alone in 2011 was over RMB 400 million.

Hainan Island belongs to tropical monsoon marine climate which has the following features: distinct seasons; no extreme hotness in summer and no extreme coldness in winter; slight annual temperature differences; high annual average temperature; obvious dry and rainy seasons; drought in winter and spring and rain in summer and autumn; frequent tropical cyclones; abundant light, heat and water resources; frequent climate disasters of wind, drought and coldness. The annual average temperature is 22.5 °C25.6 °C. The annual rainfall is 1,5002,500mm (about 1000mm for coastal areas in the west part).

Hainan Province, known as Qiongzhou in ancient times, has long been under the jurisdiction of Guangdong Province. But in May 1984, the decision was approved to establish the Hainan Administrative District on the island at the Second Session of the Sixth National People’s Congress. The district governing body is the Hainan Administrative District’s Government under the Guangdong Provincial People’s Government. In August 1987, the State Council made a proposal to establish Hainan as a province. In 1988, Hainan Island became China’s 30th province and its largest economic zone.

Demography

The total population is 8.4505 million. Hainan has long been inhabited by the Han, Li, Miao and Hui peoples, among whom the Li people are the earliest settlers. Most of the Li, Miao and Hui peoples live in the central and southern parts of the island, including Qiongzhong, Baoting, Baisha, Lingshui, Changjiang, Sanya and Wuzhishan. The Han people are mainly concentrated in northeastern, northern and coastal parts of the island. Han people account for 82.7% of the total whereas the people of other nationalities account for 17.3%.

Resources

Hainan is one of the most famous homelands of overseas Chinese. About 3 million Hainanese live overseas; many of them in Hong Kong and Macao. Hainan is also the home for over 1 million Chinese who returned from abroad. For decades, these people have contributed to the development of all walks of life in Hainan. The Eighth Congress of the World Federation of Hainanese Associations, a body set up for discussing the future of Hainanese in the world, was held in Hainan in March 2004. Hainan is also the host of the annual World Hainan Youth Summer (Winter) Camp of Culture, Science and Technology. Through its various activities, overseas Hainanese youths are able to experience their homeland culture.

Hainan boasts rich biological resources and enjoys the reputation of “green treasure island”. With a wide range of tropical plants, flowers, fruits and herbs, Hainan is the largest tropical gene bank of China.

Rich oil and natural gas deposits have been confirmed in the three basins in Beibu Bay, Yinggehai and Southeast Hainan, covering an area of 120,000 square kilometers. Water energy reserves can be exploited to generate 1.6 billion kwh of electricity. Other alternative energy resources with great potential include tidal, solar and biological energy.

The tourist resources in Hainan include beaches, national forest parks, wildlife conservation zones, rivers, craters, caverns, mountains, hot springs, historical sites, ethnic cultures, and tropical landscapes. Sandy beaches with slow slopes take up around 50-60% of the coastlines of Hainan. In most places, the sea is calm with clear water and the beach is lined with green trees and covered with soft white sands. With a temperature between 1830 and warm sunshine, swimming in the sea or bathing on the beach is possible for most time of the year. Along the east coastline from Haikou to Sanya, over 60 places show potential as into bathing areas. In addition, coral reefs and mangrove forests are big tourist attractions. So far, four mangrove forest protection zones have been set up in Qiongshan District of Haikou and Qinglan Port of Wenchang.

Mineral Resources

Mineral resources in Hainan include natural gas, ferrous metals and non-ferrous metals. Natural gas deposits are mostly concentrated in offshore continental shelves. Statistics show that, at the provincial level, Hainan ranks first in terms of quartz sand deposit, and second in terms of zircon sand deposits. Its natural mineral water and thermal mineral water resources are also abundant.

Sea Salt Resources

Hainan is ideal for salt farms, particularly along the curved coastline stretching from Sanya to Dongfang. Large salt farms include Yinggehai, Dongfang and Yuya and Yinggehai Salt Farm is one of the largest salt farms nationwide.

Aquatic Resources

Hainan has nearly 300,000km2 of fishing grounds which provide excellent conditions for the growth of a great variety of fishes. The water territories along the coast suitable for aquatic cultivation cover an area of 25,700 hectares.

Medical Resources

Hainan is known as a “natural pharmacy”. About 2,000 of its 4,000-odd plant species have a medical value, accounting for 40% of the national total, and 137 plant species can be used to treat cancer.

Flora Resources

Hainan is home to tropical forests and tropical monsoon forests. According to the latest survey, there are over 4,000 vascular plants in Hainan, accounting for about 1/7 of the national total. Among them, over 630 plant species are unique to Hainan. The largest 17 families of tropical flowering plants in the world can be found in Hainan without exception.

Crop Resources

Grain crops are extensively cultivated in Hainan and include rice, upland rice, Shanlan mountain rice and wheat. The second largest group of crops include sweet potato, taro, corn, sorghum and bean while major cash crops include rubber, coconut, betel nut, coffee, oil palm, pepper, cashew nuts, cocoa, sugar cane, fibre crops, peanut, sesame and tea. Common fruits include pineapple, litchi, longan, banana, mango, orange, water melon, star fruit, jack fruit, rambutan fruit and dragon fruit. Moreover, there are over 120 kinds of vegetables.

Economy

While many of the tourists to Hainan are Chinese, the government hopes to change this and the State Council announced a strategic plan to make Hainan a world-class “International Tourist Destination” by 2020. Hainan is currently the only place in the country that allows foreign tourists to visit without a visa as long as they go as part of a tour group organized through China National Tourism Agency-approved international agencies.

As part of the Chinese central government’s comprehensive plan to develop Hainan into an international tourist destination by 2020, a tax-free policy for tourists has been implemented. This policy is the most valuable and influential part of the government’s preferential policies to boost the province as an international tourist destination. From April 2011, tourists who purchase tax-free commodities at tax-free stores in the province and leave the island by air can take advantage of the policy. So far, the policy has greatly facilitated tourism and shopping consumption in the province, as well as increased the tourist flow. Through October this year, the two tax-free stores in Sanya and Haikou have sold a total of 4.08 million tax-free commodities worth RMB 2.67 billion to tourists coming from different parts of the world, with daily sales reaching approximately RMB 5 million. Additionally, the tourism flows saw a 16 percent year-on-year increase to 30 million in 2011.

In an effort to bring the huge potential of the tax-free policy into full play, construction of the world’s largest dutyfree shopping center has begun in Sanya. The Haitang Bay International Shopping Center, in which RMB 3.45 billion was invested, is set to attract a vast number of top-end and flagship stores to its 125,000 square meters complex after being completed in 2014. The new shopping center will take tax-free shopping as its main focus and is looking to attract high-end consumption on a global scale.

  

Hainan’s Major Industrial Products

National Rank (total 30 provinces/municipalities)

Product

National Rank

Refined sugar

5

Natural gas

15

Crude oil

Cars

17

Chemical Fibre

20

Source: China Statistical Yearbook, 2011


However, China’s General Administration of Customs (GAC) released the “Interim Measures for the Supervision and Administration on the Tax-free Shopping of Visitors Departing from Hainan Island” in October 2012. According to this announcement, tourists departing from Hainan Province who are residents of the island may only enjoy the offshore tax-free policy once in each calendar year, while those who are not residents of the island may enjoy such policies not more than twice in each calendar year.

The accumulative value of the tax-free goods purchased each time by a visitor departing from Hainan Island is limited to RMB 8,000 and the quantity for each individual type of good allowed to be purchased is shown in the Annex below. As long as the import duty of the goods has been paid, each visitor may also purchase one product priced over RMB 8,000.

Hainan island holds 42.5 percent of the nation’s total tropical landmass used for agriculture, forestry, animal husbandry and fishery. Major agricultural industries include natural rubber, coffee, tobacco, tropical flowers and tropical fruits such as coconuts, watermelons and bananas are all major crops. Hainan is also developing aromatic vegetables into a major industry.

Hainan is home to 70 percent of China’s titanium reserves and is also a major salt production center. Main exports include aquatic products, furniture and wood, electrical and electronic products, iron and steel. Hainan’s main import and export trading partners are the EU, ASEAN, the U.S. and Japan.

Hainan’s territory covers an enormous amount of seabed - a radius of about 200 miles around the island area - and the local government is keen to exploit this in terms of aquaculture and offshore oil and gas production in the South China Sea. Since 1996, Hainan has been supplying Hong Kong with natural gas through a 770-kilometer pipeline. Large oil and gas reserves have been discovered in the South China Sea and many analysts expect future potential in this respect as well. Yet the ownership of islands near the South China Sea is a topic of heated debate among China and neighboring countries.

The 12th Five Year Plan of Hainan aims to promote the modern service industries, including tourism, commercial exhibitions, modern logistics, and sports and leisure, as leading industries. It also aims to greatly increase investment into the new energy, new materials and biomedical industries, such that they will become the main pillar for pulling economic growth. It hopes to form five industry groups in the automobile, food and beverage and agricultural product processing, photovoltaic, medical and pharmaceutical, cultural and creativity and leisure and entertainment industries, with output of over RMB 10 billion by 2015. It also wishes to accelerate the development of the golf and yacht industries by introducing a series of internationally influential golf tournaments, develop golf training and associated industries, and establishing yacht trading venues and yacht clubs. The Plan also encourages the creation of a base for manufacturing travel equipment including those for yachts, residential vehicles, outdoor sports, scuba diving, and golf. In addition, the Plan aims to cultivate three to five medical, health and convalescence institutions meeting international advanced standards and providing services such as Chinese medicine, hot spring and diet therapy.

In terms of raising innovative capability, the Plan encourages enterprises with the necessary conditions to establish state, provincial and municipal key laboratories and state and provincial key engineering technology R&D centers, and aims to cultivate a group of high- and new- technology enterprises, innovative enterprises, and state and provincial level IPR pilot enterprises.

Famous domestic and foreign schools are encouraged to establish branch schools and large enterprises to establish training bases in Haikou, the provincial capital, and schools are encouraged to establish mutual recognition of courses and credits with foreign schools. In addition, the development of accounting, legal, economic appraisal and consulting services are encouraged, and the Plan aims to cultivate a group of internationally well-known intermediary service enterprises.

In terms of the environment, the Plan hopes to achieve a 100 percent urban waste treatment and disposal rate and a 90 percent urban waste water treatment rate. High energy consumption, high water consumption, high emission industries and overcapacity industries will be prohibited from developing. The Plan also aims to achieve a 95 percent utilization rate of clean energy by 2015, and for all key projects and largescale public facilities to comprehensively implement contract energy management.

The Plan aims to actively promote Haikou’s economic exchange and cooperation with the pan-PRD region and with international friendship cities, and expand economic cooperation and trading with 10+1 ASEAN nations. In addition, it hopes to adjust and optimize export goods structure and encourages and supports the expansion of export of photovoltaic, marine products, food and beverage, and electrical and mechanical products. In addition, it hopes to adjust and optimize the structure of FDI utilization by increasing efforts to attract investments in the high- and new-technology industries, modern service industries, and public infrastructure.

Infrastructure

Air

Hainan’s airports include Sanya Fenghuang and Haikou Meilan, which handle the major inflows of people into the province.

Rail

Hainan island’s east ring intercity rail connects the major cities of Haikou and Sanya. Another high-speed railway is planned for the west coast of Hainan and a ferry link connects Hainan island’s railroad to the mainland. 

Ports and Waterways

Hainan island’s largest harbors are located at Haikou, Sanya, Basuo and Yangpu.