President underlines key role of consumer spending for economy

President Xi Jinping has set out a new vision for the development of the Hainan Free Trade Port, highlighting the need to enable the port to lead the way in China's reform and opening-up in the new era.

The construction of the free trade port in Hainan was a key focus of the president's trip to the southernmost province of China from Sunday to Wednesday.

It was the second inspection trip to Hainan over the past four years by Xi, who is also general secretary of the Communist Party of China Central Committee.

On April 13, 2018, he announced a plan to build the whole of Hainan Island into a free trade port at a gathering that marked the 30th anniversary of the establishment of Hainan province and the Hainan Special Economic Zone in Haikou, the provincial capital.

Four years later, Xi visited the international duty-free shopping mall in Sanya to inspect the offshore duty-free program, first piloted in the province in 2011, and the Yangpu economic development zone in Danzhou－both key landmark projects for the development of the free trade port.

He also visited an exhibition featuring the achievements made by Hainan in comprehensively deepening reform and opening-up and developing a free trade port with Chinese characteristics.

The president underlined the importance of further amplifying the fundamental role of consumer spending in underpinning economic growth, leveraging the strength of China's huge market volume and creating a better market and legal environment.

He also called for efforts to better serve the construction of the new land-sea transit routes for western China and the Belt and Road Initiative.

At a meeting with provincial officials on Wednesday, Xi noted that the building of a free trade port in Hainan is a complex and systemic project that would be a long-term endeavor.

It is important to focus on the development of the tourism, modern services and high-tech sectors and high-efficiency tropical agriculture, and quicken steps to develop a modern industry system, he said.

Cui Fan, chief economist of the Hainan Research Institute at the University of International Business and Economics in Beijing, said Xi's visit has provided a major boost to the development of the free trade port in Hainan, which is now at a key juncture of its growth.

Meanwhile, Cui noted that Xi has also stressed the need for patience and had urged officials to prepare for long-term efforts, an indicator that he expects the free trade port to lead the way in the nation's reform and opening-up.

The nation unveiled a master plan for the construction of a free trade port in June 2020, aiming to build the island into a free trade port with global influence by the middle of the century.

The free trade port is set to introduce islandwide customs clearance operations by 2025, as part of broader measures to promote trade and investment liberalization and facilitation.

Last year, the free trade port welcomed another significant policy boost from the central government, which approved it to explore online sales of prescription drugs, boost the development of an online games sector, press ahead with autonomous driving technologies and step up the development of homegrown high-end medical equipment.

The policy incentives have started to pay off, as the free trade port has led the nation in economic growth and welcomed a record inflow of foreign investment.

Hainan's economy grew by 11.2 percent year-on-year in 2021, the highest growth rate among all provincial areas in China.

The province saw its inflow of foreign investment double in 2021 with implementation of a number of policies to facilitate trade, investment and the flow of cross-border funds, marking the fourth consecutive year that the inflow of foreign investment has doubled from the previous year.

Li Yufei, deputy head of the office of deepening overall reform at the CPC Hainan Provincial Committee, told a news briefing on Wednesday that the free trade port has adopted over 150 policy measures to widen market access, and promote trade facilitation and liberalization.

The measures to promote innovation at the institutional level and improve the business environment has given rise to exponential growth in businesses, with the number of market players reaching 1.79 million, about 1.9 times that of five years ago, he said.

Xu Lan, deputy head of the provincial development and reform commission, said Hainan has now shaken off its overreliance on the real estate sector for growth, with the sector now accounting for about 30 percent of tax revenues, down from 40 percent previously.

The digital economy has become a new growth engine for the area, with the yearly turnover of the internet sector reaching 150 billion yuan ($23.5 billion) and the number of high-tech firms up by 43 percent year-on-year, she said.