China Reveals Plans to Build a Pilot FTZ on Hainan Island

The State Council of China has officially announced the approval for setting up a pilot free trade zone (FTZ) in the southern province of Hainan, with an overall development plan aiming to reduce restrictions on foreign investment on the island.

According to the proposal published on the government’s official website, the government aims to make significant progress in the development of the FTZ by 2020. More specifically, the region would improve areas such as law enforcement, financial services, and regulation systems, as well as provide an ecological environment and facilitate investment and trade in the coming years.

Moreover, the government would set up an investment fund to support the building of a free trade port on the island by 2025 which aims to become a mature system by 2035.

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Wang Shouwen, Vice Minister of Commerce stated at a news conference that the Hainan FTZ would span 35,400 square kilometers, an area considerably larger than any of the eleven existing FTZs in China which are approximately 120 square kilometers each.

Wang added that its size “reflects China’s determination and confidence to further open up to the outside world”. About 40 percent of the policies and measures introduced would be unique to the Hainan Province to advance trial reforms, accelerate the establishment of new institutions of the open economy, and promote innovation of the service sector.

Chinese President Xi Jinping announced the move on the 30th founding anniversary of the province and its special economic zone six months earlier. Later in April, the State Council published a guidance on integrated development of Hainan.

The newly published plan leaves out gambling and casinos, something that has attracted much attention and debate when mentioned in the guidance. According to, a government official explained that the reason that gambling is not mentioned in the document this time is to prevent the public to blindly invest in the gambling business which diverts from the original intention of setting up the FTZ.