Hainan has sent officials to Germany, Japan and Hong Kong to seek offshore trade orders and investment capital to prop up a sagging economy, the South China Morning Post has learned, as local governments in China rush to make similar moves.
The southernmost province in China is sending officials led by Deputy Provincial Governor Ni Qiang to Germany, who are arriving on Monday afternoon Beijing time in Frankfurt for a five-day trip. The team is set to sign a contract with Bielefeld University of Applied Sciences to establish a vocational school in Hainan, with the first phase of around 100,000 square meters. It will also visit local companies.
“We are trying to expand the market for trade, and to tell global society that China is still open to the world,” Han Shengjian, head of the province’s Department of Commerce and director general of of the Hainan Provincial Bureau of International Economic Development, said in an interview. The province is planning trips to other regions such as the United States, Southeast Asia, and a few other nations in Europe soon to promote business opportunities with the tropical island, said the official, who is part of the delegation.
The trips came as a number of other provinces, including Zhejiang, Jiangsu, Guangdong and Sichuan, as well as cities including Ningbo and Jiaxing in Zhejiang have dispatched official delegations to European countries, Japan and Indonesia. Almost all of these groups are venturing beyond the Chinese mainland for the first time in three years after the recent loosening of Covid-19 restrictions.
An aerial photo taken on November 5, 2022, shows a view of the Yangpu international container terminal in the Yangpu Economic Development Zone, in south China’s Hainan Province. According to Haikou Customs statistics, in the first 11 months of 2022, the total import and export value of Hainan’s goods trade was 182.63 billion yuan, an increase of 40.1% year-on-year. Photo: Xinhua
The rush underscores the need to revive trade and foreign investment. China’s exports and imports recorded big declines in November, as the world’s second-largest economy is forecast to miss its annual growth goal of around 5.5 per cent.
Hainan is making an all-out effort to accelerate its development and meet Chinese President Xi Jinping’s goal of becoming the largest free-trade port in the nation, with all goods becoming duty-free by 2025.
Hainan also dispatched a separate team to Japan for a 15-day trip starting on November 27, even before the recent removal of Covid-19 restrictions. The representatives discussed deeper collaboration with local governments in Japan and with local companies including carmaker Toyota Industries, Mizuho Bank and skincare and cosmetics company Kao Corporation.
The province aims to build a cluster area for an initial batch of eight to 10 Japanese companies on the island, Han told the Post, including projects to make batteries and components for Toyota electric vehicles.
In Hong Kong, Hainan has signed contracts with a few companies as it enhances collaboration with the city that provides around 78 per cent of the total offshore investments, helped by former Chief Executive CY Leung. Leung held a video meeting with the delegation in Hong Kong and stressed that the city will act as a super connector to further expand collaboration between the two jurisdictions.
Hong Kong-headquartered Swire Group is planning to establish a centre in Hainan for its Coca-Cola business, which will locate its regional management team and set up production lines for its non-soda beverage business in the province, serving local citizens and travellers. Swire has also signed a partnership with China Duty Free Group to build a high-end shopping mall in Hainan, the Post has learned.
Micro Connect, a company founded by Charles Li Xiaojia, the former CEO of bourse operator Hong Kong Exchanges and Clearing, will also set up a regional headquarters and a platform to introduce foreign investment in the province.
Accounting firm PwC, meanwhile, launched a training institute in Hainan with a 1 billion yuan investment, which aims to train staff and provide education on environmental, social and corporate governance, and digitalisation.
With these efforts, Hainan aims to see its duty-free sales revenue surpass 60 billion yuan next year, Hai told the Post, up from this year’s around 50 billion yuan, after around 60 billion yuan in 2021.