Hainan province. Photo: Xinhua

China plans a package of preferential policies to build Hainan province into a globally influential and high-quality free trade port, which will serve as a new growth engine for both the nation and the global economy, officials and experts said on Monday.

The first phase of the government’s master plan will be completed in 2025, with a key focus on liberalization and the facilitation of trade and investment, said Lin Nianxiu, vice-minister of the National Development and Reform Commission.

“We will make a big push to boost the free and efficient flow of various production factors and strive to make breakthroughs in around three years, which will lay a solid foundation for the islandwide special customs clearance operation,” Lin added.

The second phase will focus on further optimizing opening-up policies and institutional arrangements.

By 2035, high-level process supervision will be mostly built to achieve free trade and investment, free cross-border capital flows, free and convenient transportation and access for people, and a safe and orderly flow of data, according to the mega plan for the Hainan Free Trade Port.

“Hainan needs to learn from the advanced experience of internationally renowned free trade ports such as Hong Kong, Singapore and Dubai, converging with high-level economic and trade rules and building an open system with international competitiveness,” Lin said.

“We will further cooperate with the Guangdong-Hong Kong-Macao Greater Bay Area to ensure long-term prosperity.”

He noted Hainan differs from Hong Kong in positioning and industry focus, indicating that complementarity outweighs competition. “We must give full play to its advantages in rich natural resources, unique geographical location and the vast hinterland, focusing on developing tourism, modern services and high-tech industries.”

Cui Weijie, director of the Institute of Industry Development and Strategy under the Chinese Academy of International Trade and Economic Cooperation, said Hainan resembles many well-known international free trade ports in terms of their high level of openness.

In the next step, the province will give foreign investors greater access to the financial services field to help vitalize the economy. Pan Gongsheng, a vice-governor of the People’s Bank of China, said the government would encourage commercial banks and other financial institutions to develop capabilities suitable for an open economy and support global exchanges for energy, shipping and bulk commodities.

Market liquidity

The People’s Bank of China (PBoC), the country’s central bank, on Monday continued to pump cash into the banking system via reverse repos to maintain liquidity.

The PBoC injected 120 billion yuan (US$16.93 billion) into the market through seven-day reverse repos at an interest rate of 2.2%. This has followed an injection of 150 billion yuan and 70 billion yuan last Friday and Thursday, respectively.

The move aims to keep liquidity in the banking system at a reasonably sufficient level, the central bank said.

A total of 500 billion yuan of the medium-term lending facility (MLF) matured Monday, resulting in a net withdrawal of 380 billion yuan from the market.

The central bank also said it plans to renew the MLF loans that mature this month around next Monday, but the volume will be subject to market demand.

Local government bonds

China’s Ministry of Finance called for efforts to expedite the issuance of local government bonds and accelerate the use of the funds raised from those bonds.

Funds raised from special local government bonds should primarily be used to invest in major sectors and major projects, said the ministry after a national meeting of financial officials. The funds should also be used to catalyze investment from the private sector to support those sectors that address inadequacies, to improve people’s well-being and to boost consumption and domestic demand, it said.

Great importance should be attached to preventing debt risks, Finance Minister Liu Kun said at the meeting, urging efforts to enhance regulation in order to hold accountable those responsible for illegal and irregular practices in bond issuance. He also ordered risk control to forestall systemic risks.

Company news

Huawei Technologies, a Shenzhen-based company, said it is “as committed as ever” to providing British network operators with the best equipment to help local people share photos, stream movies, get together online and much more.

Pledging it is still fully committed to helping build Britain’s 5G network, Huawei said it is “working to bring high-speed connections to every part of the country.”

Meanwhile, “we’re also playing our part in creating jobs, training the engineers of tomorrow, investing in new technology and supporting universities,” the company said.

The British government announced in January its new plans to safeguard the country’s telecoms network, which is widely seen as approving a restricted role for the Chinese tech company in helping build the country’s 5G network.

“For nearly 20 years, we’ve supplied the UK’s mobile and broadband companies with 3G and 4G. But some now question our role in helping Britain lead the way in 5G, ” Huawei said in the letter.

“Huawei grew up in the UK. We’ve been here for 20 years and were integral in building the 3G and 4G networks we all use every day,” said Huawei Vice-President Victor Zhang. “As a private company, 100% owned by employees, our priority has been to help mobile and broadband companies build a better connected UK.”

The story was written by Yang Zhijie and Liu Licong and first published at ATimesCN.com.