The Central Committee of the Communist Party of China (CPC) decided to support Hainan in building the whole island into a pilot free trade zone, gradually exploring and steadily promoting the establishment of a free trade port with Chinese characteristics, and promulgating policies and institutional systems for the free trade port step by step and in stages, Xi Jinping, General Secretary of the CPC, said at a gathering celebrating the 30th anniversary of the founding of Hainan Province and the Hainan Special Economic Zone. Guiding Opinions of CPC Central Committee and the State Council on Supporting Hainan in Comprehensively Deepening Reform and Opening-Up (Guiding Opinions) clearly stipulates to develop Hainan into a pilot free trade zone and a free trade port with Chinese characteristics (one zone and one port). International shipping centers in China, such as Shanghai, Tianjin, Dalian and Xiamen, have become the important role models for the construction of pilot free trade zones, while world-renowned shipping centers, such as Singapore, China’s Hong Kong, and Dubai, provide policy innovation for free trade ports. Hainan has become the first in China to trial both the pilot free trade zone and the free trade port. Therefore, it needs advanced systematic planning and innovative top-level design for high-quality construction of the (Hainan) international shipping center with Chinese characteristics, and for policy innovations of the “one zone and one port” to achieve better convergence of advantages and synergy of functions, which will in turn drive Hainan to set a new benchmark for comprehensively deepening reform and opening-up, and create a new path of reform and opening-up at a higher level.
I. Building the (Hainan) international shipping center with Chinese characteristics is an important strategic measure to thoroughly implement the “Guiding Opinions”.
The " Guiding Opinions" seeks to assign the Hainan Special Economic Zone a new mission in reform and opening-up to build a free trade pilot zone and a free trade port with Chinese characteristics. First, a pilot free trade zone will be developed across Hainan, with a pilot policy introduced for the current free trade pilot zone. Second, the island will explore a free trade port policy that is consistent with its development orientation. As per the timeline, Hainan shall achieve important progress in the construction of the pilot free trade zone with significantly improved international access by 2020; it shall initially establish the free trade port system, with a first-class business environment in China, by 2025; it shall realize a mature institutional system and operation mode of the free trade port, with a world-class business environment.
The “Guiding Opinions” also sets specific requirements for port resource integration, development of shipping facilities, opening of navigation, and establishment of shipping exchanges. It stipulates that Hainan shall optimize port resource integration, improve and strengthen the ports of Haikou and Yangpu; speed up improvement of Hainan's key infrastructures such as rights protection, shipping and fisheries; push forward the gradual opening of navigation; support the establishment of international exchanges of oil and gas, shipping and commodities in accordance with laws and regulations build national strategic energy reserve base; deepen cooperation across the Qiongzhou Strait and promote coordinated development in port, shipping and tourism; set up an investment fund for the construction of the Hainan free trade port in accordance with market-based methods; and promote more pragmatic and efficient cooperation between Hainan as well as countries and regions involved in the Belt and Road Initiative, and establish an important strategic fulcrum for the 21st Century Maritime Silk Road.
The “Guiding Opinions” also makes clear requirements on the development of cruise and yacht industry. It states support to Hainan to open international cruise routes, backs cruise ports, including Sanya, to trial cruise routes on the open sea, and turn Sanya into a cruise homeport; supports Hainan to relax controls on yacht tourism; promotes the development of tourism resources of Xisha Islands in an orderly fashion, and steadily introduce island tourism; and backs more open andconvenient offshore duty free shopping policies.
The “Guiding Opinions” provides the direction for the construction of theHainan shipping center. It says that the construction of Hainan free trade port shall reflect the Chinese characteristics, conform to Hainan's development orientation, and learn from the experience of internationalfree trade ports, with the focus on tourism, modern services and high-tech industries instead of on intermediary trade and processing andmanufacturing.
The implementation of the “Guiding Opinions” requires deep integration into the strategy to develop China into a maritime power, the Belt and Road Initiative, and the integrated military-civilian development program. It needs to systematically planthe construction of facilities, bring togetherservice industry and innovative policies and systems, and continuously improve the shipping center's ability to utilize global shipping resources. It also needs to better support Hainan’s role as the pilot zone to comprehensively deepen the reform and opening-up, the national pilot zone of ecological civilization, global tourism hub and the service and support area for major national programs. It shall leverage on the construction of the shipping center to turn Hainan into an important opening-up gateway to the Pacific Ocean and the Indian Ocean.
II. The construction of (Hainan) international shipping center with Chinese characteristics is to magnify the advantages of the “one zone and one port” policy and leverage on the convergence of functions and coordinated development.
First, the international shipping center is an important medium and platform to construct the “one zone and one port”. The construction of the “one zone and one port” is to further expand the opening-up in the areas of trade, investment, finance and personnel flow, pilot on governments’ governance capabilities, so as to cultivate a market-oriented, internationalized and efficient institutional mechanism, political system and governments’ governance capability following international standards. Many of the innovations in policy and institutional system have to be implemented and piloted through the medium of the international shipping center.
Second, the development of international shipping centers, with rich connotation, includes the building of infrastructure, such as port and shipping facilities, as well as institutional reform and innovation. In the construction of the shipping center, the improvement of customs clearance environment involves innovations in port regulatory policies, shipping reform and policy innovations are needed in ports, public finance and tax and financing, and shipping finance, shipping exchanges, freight derivatives exchanges require policy innovations in financing regulations. While the construction of the international shipping center will strengthen the foundation of Hainan’s shipping and port industries, it is an imperative need for the support and breakthrough in policy and institutional innovations of the “one zone and one port” strategy.
Third, the simultaneous construction of the “one zone and one port” will promote each other and is in line with the general practices in the world. The construction of world-famous international shipping centers, such as Singapore, China’s Hong Kong, and Dubai, came as a result of the highly open free trade port policies, and brought about massive logistics, information flow and capital flow, which in turn provided the medium and subjects for policy innovations for free trade ports. The Shanghai international shipping center, the North-China international shipping center in Tianjin, and the Northeast Asia international shipping center in Dalian, and the Southeast China internatnal shipping center in Xiamen, as well as the shipping center for the middle reaches of the Yangtze in Wuhan, and the shipping center for the upper reaches of the Yangtze in Chongqing, have become important medium and support for policy innovations in pilot free trade zones in Shanghai, Liaoning, Tianjin, Fujian, Hubei and Chongqing, respectively.
III. Hainan has sound conditions and unique advantages in constructing the international shipping center.
First, it is well equipped with transportation and economic and industrial foundations. The province’s port transportation volume keeps rising: it realized a cargo throughput of 170 million tons in 2017, and a foreign trade throughput of 32.49 million tons, an increase of 22 times and 56 times, respectively, from that in 1987; its container throughput came to 2.09 million TEUs, up 504 times compared with that in 1990. The Port of Sanya received 104 cruise calls at the peak time. Meanwhile, Hainan boasts a total of 50 berths of 10,000 tons or above, and is home to the Port of Haikou in the north, the ports of Yangpu and Basuo in the west, Port of Sanya in the south, and Port of Qinglan in the east. Led by Hainan Harbor and Shipping Holdings Co., Ltd., Hainan has accelerated resource integration, and ushered in a new paradigm with integrated port development within the province.
The economy of Hainan’s hinterland rose rapidly with the fast development of exportled growth-. The province's GDP increased to 446.3 billion yuan in 2017, up from the 5.7 billion yuan in 1987, representing an increase of 78 times; its per capita GDP went up from 925 yuan in 1987 to 48,000 yuan in 2017, an increase of 52 times. Itsforeign trade volume increased from $600 million in 1988 to $10.4 billion in 2017, surging 16.3 times. The province has also laid sound foundation in modern logistics, tourism, modern financial services,low-carbon manufacturing, oil and gas and tropical high-efficient agriculture among other industries. These are also the priority industries for Hainan in the future, and will support the developmentof cruise and container industries and financial innovations in the shipping sector. Meanwhile, the province also sees huge demand potential in the shipping markets in Southeast Asia and Northeast Asia, which are also growing rapidly.
Second, it has the unique advantages that other domestic shipping centers do not have. First, it has prominent policy innovations. At present, international shipping centers in Shanghai and Tianjin have all implemented the pilot free trade zone policy, however, Hainan, with the
“one zone and one port” strategy, enjoys convergence of policy innovations in the construction of its shipping center. Second, it has unique location advantages. Situated at the southernmost tip of the Chinese mainland, Hainan is adjacent to the strategic regions of the Pearl River Delta, GuangdongHong Kong-Macao Greater Bay Area and the Beibu Gulf. It is an important maritime strategic fulcrum connecting China and Southeast Asia and a frontier in the construction of a maritime power, and thus has important geographical advantages.
Third, the province has obvious latecomer edge. After years of exploration and practice, Chinese cities, such as Shanghai and Tianjin, have accumulated massive experience and lessons in the construction of shipping centers, which can provide important reference and lessons for the construction of the Hainan shipping center. Finally, the above-mentioned shipping centers have accumulated some duplicable and promotable innovations in terms of policy innovations and shipping reforms in pilot free trade zones. Hainan can fully draw from domestic and international experience to catch up and construct a world-class international shipping center.
IV. Overall planning for the highquality construction of the (Hainan) international shipping center with Chinese characteristics
1. Guiding lines
Hainan shall center on the “Guiding Opinions”, based on China's national conditions and Hainan's comparative advantages, and highlight the construction of characteristic medium to prioritize the construction of the five major bases of characteristic logistics distribution, comprehensive cruise operation, comprehensive ship services, service factor aggregation, and shipping exchanges and pricing. It shall explore the coordinated development of the "one zone, one port and one center (meaning the shipping center)”, amplify policy advantages and form a superposition effect to provide the Hainan example in building an international shipping center with Chinese characteristics. It shall better serve national key strategies, such as the maritime power, the Belt and Road Initiative and the integrated military-civilian development. The province shall leverage on the construction of the shipping center, turning Hainan into an important strategic fulcrum for the 21st Century Maritime Silk Road and an important opening-up gateway to the Pacific Ocean and the Indian Ocean.
2. Key principles
It shall adhere to China's national conditions and Hainan characteristics. Based on China's national conditions and institutional characteristics, and the ground situation of Hainan, Hainan shall fully learn from the experience from the world’s leading shipping centers, and adapt the experience for localization and innovation after selection and deliberation. It shall stick to systematic planning and implementation in stages. It shall strengthen top-level design to systematically build up the framework for the construction of the (Hainan) international shipping center with Chinese characteristics, following the principle of easy parts first, steady advancement and gradual exploration. It shall complement with other shipping centers in terms of functions and pursue differentiated development. It shall build an international shipping center with Hainan characteristics, and differentiate its development from shipping centers in Hong Kong and Shanghai, so as to jointly enhance the global competence and influence of the international shipping center with Chinese characteristics.
V. High-Quality construction of the (Hainan) international shipping center with Chinese characteristics needs to push forward construction of five major characteristic bases.
1. Creating a special logistics distribution base focusing on consumer goods and low-carbon manufacturing products.
With the transportation demand for tropical high-efficiency agricultural products with Hainan characteristics, Hainan shall focus on the development of specialized logistics for tropical fruits, winter vegetables, natural rubber and aquatic products, and enhance its capacity in cold chain logistics service. It shall rely on the construction of international tourism consumption center to vigorously develop container business, such as the import of foreign consumer goods. It shall also rely on the development of low-carbon manufacturing, medicine and fine chemicals among other industries to prioritize the development of doorto-door container logistics business. It shall take advantage of the development of the exhibition and medical and health industries to develop complete logistics services for specialized equipment, such as exhibition equipment, exhibition products and healthcare equipment. It shall make the most of the policy advantages to actively attract related logistics businesses in neighboring regions such as Southeast Asia to transit and distribute in Hainan. Relying on the special customs supervision areas at the ports of Haikou and Yangpu, it shall expand bonded logistics functions. It shall actively use modern information and Internet technologies to promote the development of new formats and new modes of Internet + logistics and accelerate the development of smart logistics. In view of the small logistics volume per voyage from certain countries in Southeast Asia, Hainan shall research the less-than-truckload and small-sized international container transit and distribution mode, with ports in Hainan as the hub and featuring small-sized ships and high frequency of direct container express transportation. This would better serve the small-sized, individualized and customized demand for container transportation between China and Southeast Asia and Northeast Asia. The ultimate goal is to build a logistics and distribution base that is backed by the hinterland of South China and facing the Southeast Asia, and features low-carbon products and consumer goods.
2. Creating a comprehensive cruise operation service base that focuses on serving multinational cruise routes
The cruise and yacht service industry is an important part in the construction of the shipping center. Hainan shall set up a cruise transportation system with Sanya at the core and supplemented by the Port of Haikou, and keeps enriching the cruise routes and liners. Based in Hainan and the Chinese mainland and reaching to the world, Hainan shall take the opportunity in the construction of the international tourism consumption center to attract international travelers. Relying on the rich and unique island resources such as Hainan Island, Xisha Islands, Zhongsha Islands, the island reefs of the Nansha Islands and their surrounding sea areas, Hainan shall focus on expanding cruise routes to islands, attract tourism from across the country and create new attractions for cruise tourism. Relying on Hainan's unique location advantages, it shall develop advanced plans to pilot the cruise tourism in the open sea and seek new breakthroughs in policies. It shall explore cruise routes between the Hainan Island and major domestic cruise ports to enrich cruise tourism. It shall actively develop cruise routes connecting departure ports and ports of call, increase route density, and form a cluster advantage. It shall strengthen the connectivity between airports and seaports, and form policy synergies in such areas as visas and entry and exit control. It shall construct high-standard ports and terminals for cruises, yachts and sailboats, perfect berthing facilities, and strengthen the construction of terminal auxiliary facilities, including the “customs and three inspection procedures” at cruise terminals, shopping, catering, accommodation, material supply and other auxiliary facilities. It shall strengthen the supporting services such as cruise food supply, and rely on the existing preferential policies, such as duty-free shopping policy and visa-free transit policy, as well as upcoming policy innovations in entertainment, performing arts and culture to enrich the contents of cruise services, promote Chinese maritime culture, and extend the cruise industry chain. It shall vigorously develop the cruise economy and further promote the construction of international tourism consumption center.
3. Building a comprehensive ship service base focusing on basic services such as maintenance and bunkering
The further accumulation of logistics depends on the retaining of ships. At present, many ships on international voyages unload at coastal ports in China, and receive repair and maintenance, refuel and replenish materials in Singapore. The weak performance in basic ship services and the lack in service capability fail to retain ships and international cargo transit volume to some extent. It is necessary to make full use of Hainan's unique policy advantages and location advantages, intensify policy innovations, provide more convenient services in customs supervision, taxation, and settlement, increase the construction of bonded warehouses for food materials and ship parts and accessories, and improve ship repair, maintenance, fuel supply and crew service among other functions. The improvement in the abovementioned services can further promote the return and cluster development of shipping service factors such as ship dismantling, financing, trading, brokerage and management. It is recommended to take Singapore as the model, and learn from the experience and practice of the Singapore shipping center to provide competitive services and attract global resources to Hainan. Meanwhile, Hainan shall thoroughly implement the strategic requirements on the integrated military-civilian development, and ensure facilities sharing and function integration in terms of important material supply, important material supplies, repair, maintenance and assembly of important military equipment, and personnel services.
4. Creating a cluster of modern shipping service factors with Hainan characteristics
The development of shipping service factor cluster is the key to improving the service capacity of the shipping center, enhancing its power of discourse and influence. Combining the actual situation with Hainan characteristics, Hainan shall plan the development of modern service factors such as shipping finance, shipping exchanges and shipping information. It shall make use of the innovations in offshore financial policies to plan the development of such businesses as shipping financing, ship financing and financial leasing and pilot on the construction of the offshore shipping financial center. It shall actively expand shipping services, shipping information, shipping brokerage and other services, and build a shipping information center, shipping exchanges center, shipping pricing center that focus on Southeast Asian market. It shall further explore financial innovation businesses, such as shipping derivatives trading, futures trading and index trading, and further stimulate the activeness and innovation of the shipping market. Most of the shipping service factors have global mobility and competitiveness, and are highly market-oriented and sensitive to policies. The key to attracting factors is the policy breakthrough and institutional innovation.
5. Creating a trading base focused on energy and commodities
Relying on the oil storage and transportation facilities at the Yangpu Port, Hainan shall continue to strengthen and expand the oil transportation and transit business of the Yangpu Port. On the basis of the Yangpu International Energy Exchanges, the province shall establish the Hainan International Energy Exchanges and Commodities Exchanges, starting with the trading of rubber, pepper and oil products. It shall enrich trading varieties, improve operating models and service systems, perfect trading, settlement, warehousing, logistics, and financial functions, improve market information release functions, and create certain market trading indexes. It shall use market transactions to bolster the volumes of transit, storage and transportation businesses. The province shall implement the strategy of integrated military-civilian development, strengthen the strategic energy reserve function, provide all-weather guarantee for safe and reliable supplies of materials such as ships, aviation and aerospace, deep-sea oceangoing equipment, ensure China’s needs to protect maritime rights, and support the construction of a transportation power maritime powers, trade power and military power.
6. Prompt launch of five priorities for the high-quality construction of the (Hainan) international shipping center with Chinese characteristics.
First, Hainan shall accelerate the pilot on shipping policy innovations and reform. The province shall start with the actual situation in Hainan, and study, replicate and promote relevant shipping policies implemented in other pilot free zones, to further relax restrictions on the stake limit and scope of foreign-invested enterprises. It shall study the feasibilities of policies regarding tax rebates at ports of call and departure and international container transit, and strive to make furtherinnovations in cargo classification and supervision, customs clearance policy, and inspection and quarantine.
Second, Hainan shall study and formulate the implementation plan for the construction of the (Hainan) international shipping center with Chinesecharacteristics. It shall follow the experience and practices of the North China International Shipping Center in Tianjin, jointly formulate the implementation plans with relevant ministries and submit the plan to the State Council as soon as possible, so as to provide reference and guidance for the follow-up planning and construction of the shipping center.
Third, Hainan shall continue to promote the port resource integration, form an integrated development plan with perfect layout, complementary functions and differentiated development for the province's ports as soon as possible. The province shall further promote the construction of the logistics port at the Yangpu Port, and build a cruise homeport in Sanya, which will form a characteristic and secured guarantee system for the port and shipping infrastructure and to lay a solid foundation for the construction of the shipping center.
Fourth, Hainan shall accelerate the cultivation of a globally competitive port enterprise group, coordinate the development, construction, operation and management of the province's port resources, and strive to build a flagship enterprise for the construction of the shipping center. It shall draw on the experience of international port groups in Shanghai, Dubai and Singapore, strengthen cooperation with world-class shipping companies, intensify and deepen cooperation with private enterprises in the Southeast Asian market to enhance the synergy of development. It shall steadily promote the regional and international development of port enterprises, enhance their influence and power control, and continuously enhance the shipping center’s role as the hub in Southeast Asia.
Fifth, Hainan shall study and formulate plans for the establishment of specialized exchanges on energy, commodities and shipping, and promptly start construction and put them into operation. It will become the basis for the development of modern shipping service factor clusters, and gradually enhance market influence and power of discourse.
VI. Policy suggestion
The “Guiding Opinions” states that central government agencies will timely delegate relevant management rights to Hainan and render the province full autonomy for reform, in accordance to its needs to construct the pilot free trade zone and free trade port in line with the island’s development orientation. The author suggests Hainan to seize the opportunity, take prompt actions, and make overall planning to reap benefits. First, it should strengthen communications with the National Development and Reform Commission and departments, including customs, commerce, taxation, finance and transportation, to achieve breakthroughs in policy innovations in the fields of shipping reform, shipping finance, bunkering, cruise economy, trading of derivatives, customs clearance and regulations. Second, it should simultaneously launch detailed and thorough research on relevant policy innovations as soon as possible, so as to have enough policy reserves and emergency plans for further policy implementation, process evaluation and risk control. Third, it should build up the think tank alliance for the construction of the (Hainan) international shipping center with Chinese characteristics, gathering renowned experts from home and abroad to suggest ideas for the construction of the shipping center. Fourth, it should hold regular international forums or annual conferences on the construction of the shipping center or free trade port, and gradually expand its influence and enhance its power of discourse.
2018/11/30 14:31:17