Hainan is counting down to its island-wide border closure operation, scheduled to begin on December 18. The policy framework of "relaxed first-tier controls, tightened second-tier oversight, and free movement within the island" will be implemented. What transformative changes will Hainan Free Trade Port witness post-closure? What opportunities and challenges might emerge in finance, trade, and other sectors? Moreover, what signal does this landmark move send about China’s commitment to openness?
Zheng Yongnian, Dean of the School of Public Policy at The Chinese University of Hong Kong (Shenzhen) and Director of the Qianhai Institute for International Affairs, shared his insights.
**"Hainan Free Trade Port Still Has Room for Improvement in Micro-Level Environment"**
**Q:** Against the backdrop of expanding high-level openness in the 15th Five-Year Plan, what role will Hainan Free Trade Port play?
**Zheng Yongnian:** Openness operates on three levels. First, upholding multilateralism and inclusivity. While the U.S. promotes multilateralism, its approach often carries exclusivity, evident in geopolitics and trade. China’s openness, as seen in the Belt and Road Initiative and BRICS cooperation, is inclusive.
Second, institutional openness—aligning with global advanced rules, standards, and governance—a principle maintained since the 1980s and WTO accession.
Third, unilateral openness, emphasized since the 14th Five-Year Plan, marks a new era. Early-stage development rarely allows self-driven reform, but China has now reached that stage. Hainan must be viewed within this framework.
As a high-standard platform, Hainan is pivotal for China’s openness. It must bridge two links: domestically, integrating with the Greater Bay Area and Yangtze River Delta; globally, adopting open policies to attract international flows, leveraging its proximity to Southeast Asia.
Historically, Southeast Asia shares cultural and geographic ties with Hainan. Current global trends—economic nationalism in the U.S. versus China’s openness—further highlight Hainan’s strategic contrast.
**Q:** What breakthroughs might follow Hainan’s border closure?
**Zheng Yongnian:** The key is "flow." Singapore succeeded due to its business environment, not just geography. Hainan’s first step must be steady yet bold, with radical reforms.
Execution is critical. Micro-level improvements—like foreign talent policies—are lagging. Past initiatives, like the "International Tourism Island," fell short, with over-reliance on duty-free shopping. Hainan must enhance its micro-environment to compete globally.
**"Border Closure Mitigates Systemic Risks"**
**Q:** Will border closure pose challenges to data, finance, and trade?
**Zheng Yongnian:** It’s an opportunity. Closure enables risk control, allowing deeper reforms. Central policies ensure systemic risks are contained. Challenges for local governance—like talent gaps—are being addressed with experienced cadres dispatched by the central government.
**"Incremental Reforms Won’t Suffice; Bold Steps Are Needed"**
**Q:** What constitutes "radical reform"?
**Zheng Yongnian:** Hainan needs transformative, not incremental, changes. Issues like bureaucratic inefficiency ("hat factories") persist. With risks controlled, Hainan should benchmark global standards—e.g., adopting Hong Kong/Singapore models in education and finance.
National security research remains abstract, failing to address practical needs. Chinese firms prefer Singapore or Vietnam over Hong Kong/Guangdong, signaling institutional gaps.
**Q:** What’s the biggest draw for individuals and businesses?
**Zheng Yongnian:** Policies are unparalleled, but execution is key. Resistance from vested interests and inertia—as seen in Hong Kong/Macau—must be overcome. Micro-level breakthroughs are essential to convert policy advantages into growth.
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