Planned big-ticket developments on the island highlight China's commitment to liberalization and the world's economy
China's opening-up policy, which is already encouraging the world's big companies and investors to redraw their strategies, received a fresh burst of energy this month. [Special coverage]
The government announced several creative plans to build Hainan island into an international free trade zone and free port. Next came proposals to give foreign investors full access to China's general manufacturing sector.
All this reaffirms the country's commitment to market liberalization and its role as a key driver of global growth, said business leaders.
The tropical island of Hainan, known for its sandy beaches and resort-dotted coastline, gained prime attention from home and abroad after President Xi Jinping announced on April 13 a grand plan defining the island's future role.
The central government has decided to set up an investment fund to support building a free trade port in Hainan by 2025.
Foreign firms and multinational companies will be encouraged to set up international and regional headquarters on the island, according to a detailed official guideline released on April 14.
The island will gradually phase out sales of traditional gasoline-fueled vehicles, according to the guideline.
"After decades of gaining robust growth from China's huge consumer base, technology and infrastructure upgrading, low material and labor cost, foreign manufacturers can discover more new market growth points today, as the country has moved to substantially expand its reform and opening-up programs, not only in specific sectors, but in specific areas (such as Hainan)," said Xue Rongjiu, deputy director of the Beijing-based China Society for WTO Studies.
China, a top-priority market for many multinationals, will further get integrated into the global economy by allowing foreign companies greater acess to the services industry, including elderly care, health and education. It will lift limits on foreign-owned equity in some areas, and fully open the manufacturing sector, according to the government policies that have been evolving since 2017.
Ulrich Spiesshofer, chief executive officer of Swiss industrial conglomerate ABB Group, said he has seen major changes like rising market demand for high-end products such as industrial robots and state-of-the-art technologies like artificial intelligence and high-voltage direct-current systems.
"On the automation side, China's center of gravity in industry is really shifting away from the heavy industries more into discrete industries and services," he said. "We have also shifted our center of gravity: we are the market leader in robotics in China since decades and have invested strongly. So I would say the underlying sentiment is positive."
Under the government plan, the general manufacturing sector will be completely opened to foreign participation. Access to sectors like telecommunications, medical services, education, elderly care and new energy vehicles will be expanded.
The Ministry of Commerce also said that China will complete a revision of the negative list for foreign investment in the first half of this year. Areas not on the negative list are presumed to be open to foreign investors.
"We came just at the right time with a clear portfolio that is now the simplest in the industry with a much stronger customer orientation in a market that is improving," said Spiesshofer of ABB.
Chinese Vice-Minister of Commerce Wang Shouwen said, "The reform and opening-up policy has been behind China's robust growth over the past four decades, which helped the country to emerge as the world's second-largest economy and the largest contributor to world growth."
From 2013 to 2017, China contributed more than 30 percent of world economic growth, more than the combined contributions of the United States, Japan, and the eurozone, according to World Bank data.