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Master Plan for the Construction of Hainan Free Trade Port
Release Time:2020-06-01 17:05:51       Article Source:Hainan Marine Trade Exchange Service Center

As the largest special economic zone in China, Hainan has unique advantages of comprehensively deepening reform and testing the highest level of opening-up policies. It is a major reform and opening up initiative which is put forward by General Secretary Xi Jinping who has planned, deployed and promoted it by himself; in addition, it is a strategic decision made by the CPC Central Committee in the light of the overall situation of China and the international community through in-depth study, overall consideration and scientific planning--to support Hainan in gradually exploring and steadily promoting the construction of the Free Trade Port with Chinese characteristics, and establishing the Free Trade Port policy and institutional system step by step and stage by stage. Today's world is undergoing a new round of major development, major transformation and major adjustment; the protectionism & unilateralism are on the rise; and the economic globalization is faced with greater headwinds and undertows. Building the Free Trade Port in Hainan is the fundamental requirement of promoting high-level opening up and establishing a new opening-up economic system; it is the urgent need of deepening market-oriented reform and creating a legal-based, international and convenient business environment; it is the strategic choice of implementing the new development concept, promoting high-quality development and building a modern economic system; it is the practical action of supporting the economic globalization and building a community of shared future for mankind. This plan is formulated in order to thoroughly implement the spirit of the important speech delivered by General Secretary Xi Jinping during the celebration of the 30th anniversary of the Hainan Province and Hainan Special Economic Zone, implement the Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan's Comprehensive Deepening of Reform and Opening up, and speed up the construction of a high-level free trade port with Chinese characteristics.


I.General Requirements

(I)Guiding ideology

We must follow the guidance of General Secretary Xi Jinping's Socialism Ideology with Chinese Characteristics in the New Era. We must fully implement the spirit of the 19th Session of the National Congress of CPC, as well as the 2nd,3rd and 4th plenary sessions of the 19th Central Committee of the CPC. We must uphold the Party's overall leadership, adhere to the fundamental keynote of China's steady progress, adhere to the new development concept, stick with high quality development, and comprehensively promote the "five-in-one" overall layout, and coordinately promote the Four-Prolonged Strategic Layout; We must aim at the high-level international economic and trade rules, emancipate our mind, innovate bravely, focus on the liberalization and facilitation of trade and investment, establish a policy system which is suitable for the high-level Free Trade Port, build a Special Customs Supervision Zone with international competitiveness and influence, and build Hainan Free Trade Port into a flagship and an important opening-up door leading China's opening up in the new era.

(II)General principles

★Learn from International Experience. We must adhere to the high-starting point planning and high-standard construction, actively adapt to the new trend in the restructuring of international economic and trade rules, learn from advanced operation modes, management expertise and institutional arrangement of global free trade ports, form an opening-up policy & institutional system with international competitiveness, accelerate the establishment of a new opening-up economic system, enhance the region's radiating and driving effects, and create the frontier region in China that deeply integrates into the global economic system.

★Reflect Chinese Characteristics. We must adhere to the Party's centralized and unified leadership, adhere to the path of socialism with Chinese characteristics, adhere to the people-centered principle, and practice the core values of socialism, so as to ensure the correct direction during the construction of Hainan Free Trade Port. We should give full play to the institutional advantages of the collaboration & cooperation nationwide and concentrating our resources on major issues; mobilize the enthusiasm and creativity of all parties; gather global high-quality production factors; make new breakthroughs in promoting institutional innovation, cultivating new growth drivers, and building a new pattern of comprehensive opening up; so as to provide solid support for the realization of national strategic goals. We should strengthen exchanges & cooperation with Southeast Asian countries, and promote the interactive development along with the Greater Bay Area of Guangdong, Hong Kong and Macao.

★Fit the Positioning of Hainan. We should focus on the strategic positioning that Hainan is endowed by China to build the comprehensively deepened reform & opening up pilot area, the national-level pilot zone for eco-civilization, the international tourism & consumption center and the service guarantee zone for national major strategic projects; give full play to its advantages, such as rich natural resources, unique geographic location, and being backed by a super-large-scale domestic market and hinterland economy, seize the new-round important opportunity of the global scientific & technological revolution and industrial transformation, focus on the development of tourism, modern service industry and high-tech industry, and accelerate the cultivation of new cooperative & competitive advantages with Hainan characteristics.

★Highlight Reform and Innovation. We should strengthen the awareness of reform and innovation, endow Hainan with greater autonomy for reform, support Hainan to push forward reform and innovation in an all-round and vigorous way, actively explore the establishment of more flexible and efficient laws & regulations, regulatory models and management systems to adapt to the construction of the Free Trade Port; make great efforts to remove the institutional & mechanism barriers that hinder the flow of production factors. We should deepen the opening up of commodity & factor flows, accelerate the institutional opening up of rules & other institutions, and drive the reform in an all-round way with a high level of opening-up. We should strengthen the system integration of the reform, focus on the coordinated promotion, and make the various innovation initiatives cooperate with each other and complement each other, thus improving the overall efficiency of reform and innovation.

★Stick to the Bottom-Line Thinking. We should persist on working steadily, push the work ahead step by step, make overall & comprehensive arrangements for the pace and progress of opening-up, and launch an item only when preparation is well-completed, never rush for progress or quick success. We should deepen the efforts to streamline administration and delegate power, integrate decentralization with management, and upgrade services, comprehensively implement the institutional system of convenient access and law-based process supervision, and establish regulatory standards and norms that are in line with international standards. We should strengthen major risk identification and systematic risk prevention, establish and improve risk prevention & control supporting measures, improve the system & mechanism for prevention and control of major epidemics, and improve the public health emergency management system, carry out the work of normalized assessment, and rectify the deviation and the error in time, thus ensuring the correct and healthy development of the construction of Hainan Free Trade Port.

(III)Developmental goals

By 2025, we will initially establish the free trade port policy & institutional system, which focuses on trade and investment liberalization and facilitation. Build an overall business environment that reaches top level in China, with substantial increase in market entities, significant improvement in industrial competitiveness, effective risk prevention and control, gradually improved legal system that adapt to the construction of the Free Trade Port, and significantly improved quality and efficiency of economic development.

By 2035, the institutional system and operation mode of the Free Trade Port will be more mature. The trade & investment rules that are characterized by freedom, fairness, law-based order and high-level process supervision will be basically constructed, thus realizing freedom & convenience of trade, investment, cross-border capital flow, personnel entry & exit, and transportation, as well as data security and orderly flow. The business environment will be more optimized, the legal system will be more sound, the risk prevention and control system will be more rigorous, and the modern social governance pattern will be basically formed, thus forming a new highland of China's opening-up economy.

By the middle of this century, the high-level Free Trade Port with strong international influence will be fulfilled in an all-round way.

(IV)Implementation scope

The implementation scope of Hainan Free Trade Port is the whole region of Hainan Island.


II.Design of Institutional System

The policy & institutional system of Hainan Free Trade Port should be constructed through focusing on the liberalization and facilitation of trade & investment; being supported by the free, orderly, safe and convenient cross-border flow of various production factors as well as modern industrial system; being guaranteed by special tax system arrangement, efficient social governance system and sound legal system; and establishing on the premise of clear work division and mechanism measures, and keeping the bottom line of avoiding systemic risk.

(I) Free and convenient trade.Under the premise of effective supervision, a Special Customs Supervision Zone shall be constructed for closed operation on the whole island. The institutional system of liberalization and facilitation with "zero tariff" as basic feature shall be applied to trade in goods. Liberalization and facilitation policy & measures with the basic characteristic of "permitting both entry and operation" shall be applied to trade in service.

1.Open up the "front line". We shall set up the "front line" between Hainan Free Trade Port and other countries and regions outside the customs territory of the People's Republic of China. At the "front-line" border-entry/exit link, we shall strengthen entry/exit safety supervision, and enhance public health & safety at port, bio-safety, food safety, and product quality & safety control at national border. Under the premise of ensuring the fulfillment of obligations stipulated in the international treaties to which China is a party or a member, the list of goods and items that are prohibited or restricted from import and export shall be formulated in Hainan Free Trade Port. The goods and items out of the list shall be freely imported and exported and supervised by the customs authority according to law. We shall formulate a catalogue of goods that are subject to import duties at Hainan Free Trade Port, and goods out of the catalogue will be exempted from import duties when entering the Free Trade Port. The trans-shipped goods delivered by the Through B/L(TBL) shall be exempt from taxes or inspection. The goods and items departing the border from Hainan Free Trade Port shall be subject to export control regulations. We shall implement convenient and efficient customs supervision, and build the "single window" for high-level international trade.

2. Regulate the "second line" well. A "second line" shall be established between Hainan Free Trade Port and other areas within the customs territory of the People's Republic of China (hereinafter referred to as “the mainland”). When goods enter the mainland from Hainan Free Trade Port, relevant formalities shall be handled according to the import regulations in principle, and customs duties and import-related taxes shall be levied according to the regulations. For goods that are produced by the encouraged industrial enterprises and do not contain imported materials or with an added value to the imported materials that are processed in Hainan Free Trade Port of more than 30% (including), the import tariff should be exempt when they enter the mainland through the "second line", and the import value-added tax and consumption tax shall be levied in accordance with the regulations. Posted articles shall be supervised and taxed according to regulations when they enter the mainland from Hainan Free Trade Port. We shall simplify the import management of the transportation means from Hainan Free Trade Port to the mainland. Goods, articles and transportation means shall be managed in accordance with domestic circulation regulations when entering Hainan Free Trade Port from the mainland. The mainland's goods do not need to go through customs declaration formalities on condition that they are transferred to the mainland via Hainan Free Trade Port. Yet they should be loaded and unloaded at the customs-supervised workplace (site) in the Free Trade Port, and should be stored separately from other customs-supervised goods, with obvious marks. The site operating enterprise shall obey the supervision requirements of the customs, and transmit the information of goods in and out of the site to the customs.

3. Freedom in the island. The customs implements low-intervention, efficient and precise supervision on the enterprises and institutions in Hainan Free Trade Port, so as to realize free production and operation of the enterprises that are located in the Free Trade Port. The customs formalities shall be simplified for those transit goods that are shipped from abroad, reloaded, sorted and assembled at Hainan Free Trade Port, and then transported to other countries or regions. There is no storage period for the goods in Hainan Free Trade Port, and the storage place can be chosen freely. The goods that are subject to "zero-tariff" policy is exempt from routine supervision by the customs.

4. Promote free and convenient trade in service. We should implement the system of negative list of cross-border service trade, break down all kinds of barriers under such service trade modes as cross-border delivery, overseas consumption and natural person movement, and give national treatment to overseas service providers. We should carry out the fund payment and transfer system that is matching with cross-border service trade. We should standardize domestic regulations that are affecting free and convenient service trade further in terms of notification, qualification requirements, technical standards, transparency, regulatory consistency, etc.

(II) Freedom and convenience of investment. We should significantly loosen market access in Hainan Free Trade Port, strengthen property rights protection, ensure fair competition, create an open, transparent and predictable investment environment, and further encourage the vitality of various market entities.

5. Implement the "market access upon commitment" system. We should strictly implement the "non-prohibition is equal to permitting access" policy, cancel the license and approval for the fields with mandatory standards in principle on the premise of "being able to manage", establish and improve the filing system, and allow the market entities to carry out investment and business activities on condition that they promise to meet the relevant requirements and submit relevant materials for filing. From the time of receiving the filing, the filing-accepting institution shall assume the censoring responsibility. We should implement the management system of pre-access national treatment plus the negative list for foreign investment, and substantially reduce the prohibiting and restrictive provisions.

6. Innovate and improve the system of investment freedom. We should implement the investment facilitation system that is focusing on process supervision, establish such policies and systems as the establishment convenience that is mainly based on electronic licenses, the operation convenience that is mainly based on "responding promptly", "avoiding interruption", the cancellation convenience that is mainly based on the announced commitment and optimized procedures, and the bankruptcy convenience that is mainly based on diligently-performed duties.

7. Establish and improve the fair competition system. We should strengthen the basic position of competition policies, and ensure that all market entities that are featured with different types of ownership enjoy equal treatment in terms of factor acquisition, standard setting, access licensing, business operation, preferential policies, etc. We should treat domestic and foreign enterprises equally in the process of the government procurement. We should strengthen and optimize anti-monopoly law enforcement, break administrative monopoly, prevent market monopoly, and maintain the fairly-competitive market order.

8. Improve the system of property rights protection. We should protect the right of private and legal persons in terms of acquiring, using, disposing and inheriting property according to law, as well as the right of the owner of the property that is expropriated to get compensation when expropriating private and legal persons' property according to law. We should implement the Company Law and other laws & regulations, and strengthen the protection for the small and medium-sized investors. We should increase penalties for infringement of intellectual property rights, and establish and improve the mechanisms of market entities' classified supervision and punishment for dishonesty in the field of intellectual property rights. We should strengthen the application of Blockchain technology in intellectual property transactions, proof-filing and other aspects, and explore new models that are suitable for the development of the Free Trade Port.

(III) Free and convenient cross-border capital flow. We should adhere to financial services for the real economy, focus on trade & investment liberalization and facilitation, open up capital projects in stages, and orderly promote the free & convenient capital flow between Hainan Free Trade Port and foreign countries.

9. Establish a multi-functional free trade account system. We should establish the foundational platform for Hainan's financial opening to the outside world on the basis of the existing domestic accounts of local and foreign currencies and free trade accounts, and set up the "electronic purse seine" of capital through the isolation of financial accounts, so as to provide basic conditions for realizing the free and convenient cross-border capital flow between Hainan Free Trade Port and foreign countries.

10. Facilitate the capital flow of cross-border trade and investment. We should further promote the facilitation of trade settlement in terms of cross-border goods trade, services trade and new-type international trade, and turn the bank's authenticity censoring from pre-event audit into post-event audit. We should simplify the management according to the mode of national treatment plus negative list before access in the link of cross-border direct investment transaction, improve the convenience of registration and exchange in the exchange link, and explore a new form of cross-border investment management to adapt to the market demand. In the field of cross-border financing, we should explore the establishment of a new foreign debt management system, pilot the foreign debt management framework in the link of merger and transaction, improve the filing and registering management in terms of enterprises' foreign debt issuing, comprehensively implement the macro prudential management for full-caliber cross-border financing, steadily expand the scope of cross-border asset transfer, and improve the level of foreign debt's fund exchange facilitation. In the field of cross-border securities investment and financing, we should focus on serving the needs of real economy investment and financing, support the development of Hainan's industries with characteristics and comparative advantages, give priority to them in terms of overseas listing and issuance of bonds, and simplify exchange management.

11. Further open up the financial industry. Hainan Free Trade Port should take the lead in implementing the opening-up policy in the financial markets. Support should be given to building international marketplaces of energy, shipping, property rights, equities and so on and also to speeding up the establishment of settlement centers.

12. Speed up financial reforms and innovations. Support should be given to the innovation and standardized development of financial services in the housing rental market and to the development of REITs. Industrial financing channels in various forms should be expanded with steady steps, and restrictions on the scope of foreign-invested enterprises’ utilizing their capital funds should be relaxed. Innovations should be made in the policies, products and instruments of scientific and technological finance.

(IV) Access freedom and facilitation. As per the development requirements of Hainan Free Trade Port, more open talent policies and stay and residence policies for high-end talents should be enacted so as to foster the formation of talent clusters. More exit and entry management facilitation policies should be enforced on the premise of effectively controlling foreign-related security risks and hazards.

13. Access facilitation should be provided to high-level talents of foreign nationalities in terms of investment and start-ups, lecturing and exchanging activities, and business and trade. The foreign talents evaluation mechanism should be improved, the category of human resources should be evaluated with the level of remuneration as the main indicator, and a market-oriented talent mechanism should be gradually established. A negative list management mode should be enforced regarding to work permit of foreign personnel in Hainan Free Trade Port, and more liberal stay and residence policies on foreign professional and technical staff should be adopted. Qualified overseas personnel should be allowed to hold the post as legal representatives of the statutory bodies, public institutions and state-owned enterprises in Hainan Free Trade Port. Easy temporary entry and exit policies on commercial personnel should be issued.

14. Establish and improve talent service and management system. Efforts should be made to realize the share and linked approval and linked inspection of information on work permit, visa, and stay and residence. The establishment of talent service centers should be advanced to provide services on employment, education and living and safeguard the lawful rights and interests of talents.

15. Implement more convenient entry and exit management policy. Visa-free access policy that’s applicable to a broader range should be phased in and the visa-free duration of stay should be gradually extended. Entry-exit frontier inspection and management should be optimized to facilitate the customs clearance of commercial personnel and cruise ships.

(V) Transportation freedom and facilitation. A highly free, convenient and open transportation policy should be effected to advance the construction of international shipping and aviation hubs along the new land and sea channel in western China and to speed up the construction of a modern comprehensive transportation system.

16. Establish more free and open shipping system. Progress should be made to build the “Yangpu-Port-of-China” home port and support ship registration at Hainan Free Trade Port. Researches should be conducted to set up a shipping operation and management system and a ship crew management system of Hainan Free Trade Port. Limitations on airspace control and sea routes and traffic rights should be further loosened, shipping routes should be optimized, transport capacity should be built up, and more shipping routes and ships should be added.

17. Advance transportation facilitation and service guarantee level. Advancement should be made in the joint boarding inspection of ships. More efficient, convenient and more quality flag country special supervision policies should be formulated. High-quality and high-efficient financial services should be provided for ship and aircraft financing, including revoking ship and aircraft outbound financing limitations and exploring methods of replacing security deposit with insurance. More emphasis should be laid on constructing the transportation and customs clearance facilitation facilities between other parts of China and Hainan Free Trade Port, assigning personnel as appropriate, and making the transportation between them more free and more convenient.

(VI) Secure and orderly data flow. On the conditions of ensuring secure and controllable data flow, to expand the openness in the data field and innovate the design of security systems for the purpose of realizing sufficient data aggregation and fostering the development of a digital economy.

18. Orderly open up communication resources and businesses step by step. Value-added telecommunication services should be opened up and limitations on the proportion of share of foreign capital should be lifted gradually. Enterprises registered in Hainan Free Trade Port in substance or whose service facilities are at the port should be allowed to conduct online data processing and transaction processing and other businesses across the entire port and the globe and to gradually conduct businesses across the country on the premise of controllable security. Basic telecommunication services should be opened up in a safe and orderly manner. International pilot projects on internet data interaction should be put on agenda, international submarine optical cables and landing stations should be laid out, and an international communications entry and exit bureau should be set up.

(VII) Modern industrial system. More efforts should be made to develop tourism, modern service sector and high-tech industries and continuously enhance the foundation and competitiveness of real economy.

19. Tourism. Ecological and green development should always be put first. Focusing on building international tourist consumption centers, progress should be made in deepening the integration of tourism with culture and sports, medical care, elderly care and health promotion. Besides, efforts should be made to improve the development level of Boao Lecheng International Medical Tourism Pilot Zone, build culture and tourism industrial parks, develop characteristic tourist industry clusters, nurture new business forms and patterns of the tourism industry, and create a tourism demonstrative province across the area. Meanwhile, the development of Sanya into a home port to international cruise ships should be accelerated by building the cruise ship tourism pilot zone and attracting more international cruise ships to register. Pilot areas for reform, development and innovation of the yacht industry should be established. Support should be given to developing tourist holiday resorts and 5A scenic areas at national level.

20. Modern service industry. Efforts should be made to pool global innovation elements, deepen opening up both inwardly and outwardly and attract trans-national companies to set up their headquarters at the port. The port management system and mechanism should be innovated to facilitate the integration of port resources, expand the shipping service industrial chain, promote the growth of bonded warehousing, international logistics distribution, transit trade, bulk commodity trade, sales exhibitions of imported goods, distribution processing, container assembly and disassembly, and other businesses, improve the management and service capacity of global supply chain, develop international shipping hubs, and advance the integrated development of ports, industries and cities. The opening of the service sector to the outside world should be expanded by building Hainan into an international design island, an innovative island in international education in science, engineering, agriculture and medicine, and a regional international exhibition center. Efforts should also be made to improve marine service infrastructure, develop marine logistics, marine tourism, marine information services, marine engineering consultation, marine finance, marine commerce, etc., and build a marine service system with international competitiveness. National foreign cultural trade bases should also be established.

21. High-tech industries. By focusing on platforms and carriers, industrial capacity and scale should be proliferated and prioritize the development of the IoTs, AI, blockchain, digital trade and other information industries. Relying on Wenchang International Space City and Sanya Deep Sea Science and Technology City, major science and technology facilities and platforms should be laid out and deep sea and deep space industries should be fostered. The advanced manufacturing industry should be strengthened with emphasis on Eco-environment protection, biomedicine, new energy vehicles and smart cars. The advantages of Nanfan Scientific and Research Breeding Base should also be exploited to the full to establish the global tropical agriculture center and the transfer base for introducing global animal and plant germplasm. All will serve to the building of a smart Hainan.

(VIII) Tax system. A tax system that is applicable to high-level free trade ports should be established step by step according to the principles of zero tariff, low tax rate, streamlined tax structure, strengthened law enforcement, and phased implementation.

22. Zero tariff. Before closing off of customs, some imported goods should be exempted from import tariff, import value-added tax and consumption tax. After closing off of customs and streamlining the tax structure, the goods excluded in the catalogue of taxable imported goods and allowable for being imported by Hainan Free Trade Port are exempted from import tariff.

23. Low tax rate. Preferential corporate income tax rates should be applied to enterprises running their businesses at Hainan Free Trade Port, and preferential individual income tax rates should be applied to eligible individuals.

24. Streamlined tax structure. Efforts should be made to explore ways for streamlining the tax structure by combining with the orientation of China’s tax reform. Reform in the categories of taxes should be conducted to reduce the proportion of indirect taxes and make the structure of tax categories more simple and more scientific, the elements of tax system fully optimized, tax burden remarkably reduced, the attribution of incomes more explicit, and the government revenues and expenditures generally balanced.

25. Strengthened law enforcement. Tax administration departments should assess the tax payment behavior based on the places where substantial economic activities take place and value is created and publish early warnings. They should formulate concise and easy-to-enforce criteria for the substantial place of business and place of residence, intensify the recognition of tax evasion risks, prevent tax base erosion and profit shifting, and eradicate the possibility of “heaven of tax evasion”. They should also take active part in international tax collection and supervision cooperation and advance sharing of tax-related intelligence and information.

26. Phased implementation. This means to carry out the arrangements of zero tariff, low tax rate and streamlined tax structure according to the different phases of building Hainan Free Trade Port and eventually create an internationally competitive tax system.

(IX) Social governance. Focuses should be laid on promoting the reform of government bodies and transformation of government functions, advance the integrated application of blockchain and other technologies into the modernization of the governance system and capacity, and set up a systematic and complete, scientific and standard, and effectively-operated free trade port governance system.

27. Deepen the reform of government institutions. Efforts should be made to further promote the implementation of Hainan’s Large Department System, integrate the close and similar functions and responsibilities of different departments, and promote the merger of departments with similar functions. The proportion of comprehensive administrative civil servants should be controlled, the administrative staffing should be adjusted and targeted at supervision departments, and a market-oriented appointment system of professionals should be implemented.

28. Promote transformation of government functions. Progress should be made in strengthening supervision legislation and law enforcement, expanding the application of the social credit system, further developing the “double random selections and one publication” market supervision system, and conducting inclusive and prudential supervision of new business forms. The role of modern information technologies such as “Internet +”, big data, and blockchain should be given full play. Standard government service norms should be established through government services and other platforms so as to realize government process re-engineering and “all services to be accessed via one website” of government services. Coupled with orderly sharing of data, the services and governance level of the government will be improved. The promises made by the government must be fulfilled earnestly. Those who fail to fulfil promises or fail to fulfill them properly should make compensations without delay.

29. Create a social governance pattern of joint construction, joint governance and sharing. Efforts should be made to deepen the reform of the household registration system, further relax the residence relocation policy, and implement a unified residence permit system across the island that uses the citizenship number as the only identifier. Greater autonomy should be given to industrial organizations so as to play to their important roles in maintenance of market order, standards formulation and implementation, and mediation of industrial disputes. Greater authority for grassroots governance should be given to communities so as to improve community services and speed up governance innovations.

30. Innovate the ecological civilization system and mechanism. Progress should be made in promoting the construction of the National Ecological Civilization Pilot Zone (Hainan), establishing the system for efficient use of resources, and improving the natural resource property rights system and paid use system. Efforts should be made to solidly promote the construction of national land spatial planning system and implement differentiated control of the usage of natural ecological spaces; improve the natural resource assets franchise rights and other systems in nature reserves and explore the mechanism of realizing the value of ecological products; establish national parks such as tropical rain forests and build a system of natural reserves with national parks at the core; and to explore and develop a government-led, enterprise and society-involved, market-oriented, and sustainable ecological protection compensation mechanism. In addition, the construction of a unified investigation, evaluation, monitoring and rights registration system for natural resources should be accelerated, and the ecological environment monitoring and evaluation system should be improved.

(X) Rule of law. Efforts should be made to establish a free trade port law system with the Hainan Free Trade Port Law as the basis and local regulations and commercial disputes resolution mechanisms as important components so as to create a world-class free trade port legal environment.

31. Formulate and implement the Hainan Free Trade Port Law. Clarify in legal form each institutional arrangement in the free trade port so as to provide principle and basic legal guarantee for the construction of the free trade port.

32. Formulate laws and regulations of the special economic zone. Under the premise of following the Constitution LAW and basic principles of laws and administrative regulations, support Hainan to fully exercise the legislative power of the special economic zone and formulate the laws and regulations of the special economic zone based on the reality of free trade port construction.

33. Establish a diversified settlement mechanism for commercial disputes. Improve the centralized trial mechanism for international commercial disputes and provide a variety of resolutions to non-litigation disputes, such as international commercial arbitration, and international commercial mediation.

(XI) Risk prevention and control system. Formulate and implement effective measures so as to prevent and reconcile major risks in trade, investment, finance, data flow, ecology and public health in a target-oriented manner.

34. Trade risk prevention and control. Build the infrastructure and regulatory facilities at open ports and "second-tier ports" with high standard, increase the investment in information system construction and technical equipment, implement intelligent and precise supervision, rely on the island's "people, logistics and capital flow" information management system, social management and supervision system and port supervision system "three lines of defense", form Hainan social management information platform and implement all-weather dynamic monitoring for non-designated areas. Strengthen the supervision of specific areas, set up comprehensive law enforcement spots in areas without port inspection agencies and conduct real-time monitoring and processing of transportation tools, goods and articles loading and unloading. All the goods, articles, personnel and means of transport between Hainan free trade port and the mainland shall be imported from the port. Improve the configuration of the supervision equipment and facilities in the port. The customs shall be responsible for the supervision and investigation of smuggling in the port and other customs surveillance zones. The government of Hainan Province is responsible for anti-smuggling comprehensive management of the whole province and evaluates the comprehensive anti-smuggling management of lower-level governments. Establish a joint anti-smuggling prevention and control mechanism with Guangdong Province, Guangxi Zhuang Autonomous Region and other places.

35. Investment risk prevention and control. Improve the process supervision system that adapts to the investment rules, and strictly implement the review responsibilities of the filing institutions and the filing responsibilities of the filing subjects. Make clear and strengthen the rules and standards for process supervision, consolidate regulatory responsibilities, implement effective supervision over the whole life cycle of investment and operation activities according to law, implement tolerant and prudent supervision over new technologies, new industries, new formats and new models, and implement key supervision over high-risk industries and fields. Establish and improve the legal liability system and formulate strict disciplinary measures for the filing subject that provides false filing information and running illegal operations and so on. Carry out a good security review of foreign investment and effectively guard against national security risks while creating a stable, transparent and predictable investment environment.

36. Financial risk prevention and control. Optimize the financial infrastructure and legal environment, strengthen the protection of financial consumers' rights and interests, rely on the information monitoring and management system for capital flows, establish and improve the system for monitoring and preventing capital flows and risks. Establish a macro prudential management system for cross-border capital flows in the free trade port and strengthen the identification of major risks and the prevention of systemic financial risks. Strengthen the review of anti-money-laundering, anti-terrorist-financing and anti-tax-evasion review, research and set up money-laundering risk assessment mechanism and regularly assess the money laundering and terrorist financing risks. Build a financial supervision and coordination mechanism suitable for the construction of Hainan free trade port.

37. Prevention and control of network security and data security risks. Implement thoroughly the network security level protection system, focus on key information infrastructure and data security, improve the network security system and improve the capacity and level of network security related to the construction of Hainan free trade port. Establish and improve the data exit security management system and improve data flow risk management and control measures.

38. Prevention and control of public health risks. Strengthen the construction of public health prevention and treatment system, establish surveillance and early warning of infectious diseases and public health emergencies, emergency response platform and decision-making command system and improve our capacity for early prevention, risk assessment and timely disposal. Strengthen the construction of disease prevention and control system, establish provincial centers for disease prevention and control with high standards, establish Hainan Branch of the National Tropical Disease Research Center, accelerate the infrastructure construction of disease prevention and control institutions at all levels and optimize the allocation of laboratory testing resources. Strengthen the construction of public health talent teams, and improve the capabilities for monitoring and early warning, inspection and testing, on-site epidemiological investigation, emergency response and medical treatment. Build a three-level bio-safety protection laboratory and an institute of infectious disease control, strengthen the capability of comprehensive testing and rapid screening, and optimize the reserve and production capacity guarantee system for important health emergency materials. Improve and optimize the treatment system for major epidemics, build a medical service network for infectious diseases, build provincial and municipal infectious disease medical centers based on general or specialized hospitals, and improve the infrastructure and medical conditions of infectious disease medical centers and infectious disease hospitals. Focus on strengthening the construction of medical service capacity for infectious diseases at the grass-roots level, and improve the diagnosis and treatment capacity of infectious diseases in county-level general hospitals. Build a close grid medical group to promote resource sinking and fusion of medical care and prevention. Improve the standardized construction of basic medical and health institutions, and strengthen the capacity for the diagnosis and treatment of common diseases, public health services, and health management. Strengthen the international health and quarantine cooperation and international epidemic information collection and analysis, improve the support for the health and quarantine technical facilities in the port, build a first-class international travel health care center, strictly implement the health declaration system for entry-exit personnel, strengthen the health quarantine of vehicles, personnel, goods and articles coming from key countries or regions, strengthen the joint defense and control and the port quarantine and prevention line. Strengthen the monitoring of global epidemic situation of infectious diseases, promote the early warning of the risk of infectious diseases abroad, and strictly prevent the cross-border spread of major infectious diseases. Establish a joint prevention and control mechanism for overseas epidemics and pests, which will be coordinated by the customs and other departments. Improve the risk warning and fast-response supervision capabilities regarding the quality and safety of import and export commodities, and improve the supervision of key sensitive import and export commodities.

39. Ecological risk prevention and control. Strictly implement the management system of entry and exit environmental safety access, and prohibit the import of foreign garbage. Promote the construction of facilities for the disposal of hazardous wastes, such as medical waste, and improve the emergency preparedness and response capacity for emergencies involving the ecological environment. Establish and improve the environmental credit evaluation system.


III.Phased Step-by-step Arrangement

(I)Key tasks to be completed before 2025. Focus will be granted to promote free and convenient trade and investment and exert effective supervision to carry forward opening up in an ordered way and convenient and effective flow of various elements, thus achieving early harvest and initiating independent customs operations throughout Hainan Island in appropriate time.

1.Strengthen construction of Special Customs Supervision Zones. An import and export management system featuring “free flow through the first line and efficient control at the second line” will be first adopted in Yangpu Bonded Port Area and other qualified Special Customs Supervision Zones. More special customs supervision zones will be set up based on the need for the construction of Hainan Free Trade Port.

2. Implement zero-tariff policy on certain imported goods. Except for goods prohibited from tariff exemption or import by laws and regulations, the zero-tariff negative list management will apply to production equipments imported by enterprises for own use; the zero-tariff positive list management will apply to ships, aircrafts, other means of transport and yachts imported to the island for transportation and tourism; the zero-tariff positive list management will also apply to raw and auxiliary materials imported for production within Hainan, or for production and processing (or in the process of trade in service) in a mode where final products would be exported to overseas markets; positive list management will apply to imported goods consumed by residents in Hainan without charging tariff. Goods and items under zero-tariff list management will be exempt from import duties, import value-added tax and consumption tax. The lists will be dynamically adjusted by relevant departments according to practical demand and supervision requirements of Hainan. The quota for offshore duty-free shopping will be raised to RMB 100,000 per person per year, and the categories for duty-free goods will be expanded.

3. Reduce restrictions on cross-border trade in service. Take Initiatives to standardize domestic rules and regulations that affect the facilitation of trade in service in key areas. Formulate and release the negative list of cross-border trade in service in Hainan Free Trade Port and grant national treatment to overseas service providers. Furthermore, establish the Hainan International Intellectual Property Exchange, foster institutional innovation in the transfer, utilization and taxation of intellectual property; and carry out law-based exploration for the securitization of intellectual property.

4. Implement “the most-simplified-approval” investment system. Roll out the special list for relaxing market access and the negative list for foreign investment access in Hainan Free Trade Port. Define the geographic range for business operations of foreign-invested enterprises in specific service sectors that are opened up at early stage. Meanwhile, establish and improve the national security review and environmental standards for industrial access, social credit system among other mechanisms to promote the most-simplified-approval system in all respects. Deepen the reform on streamlining business license approval from the business license Establish and improve a process supervision system based on credit supervision and compatible with the negative list management.

5. Promote pilot reform on cross-border securities investment and financing policy. Support domestic enterprises registered in Hainan Free Trade Port to issue stocks abroad according to their domestic and overseas financing schemes and priority will be given to support enterprises in financing through issuing bonds overseas. The Development and Reform Department of Hainan province will be in charge of the registration management of foreign debt issued by domestic enterprises. Pilot programs on cross-border asset management businesses will be explored to further facilitate foreign exchange operations for cross-border securities investment and financing. A pilot program will also be developed for enterprises in Hainan Free Trade Port to register foreign exchange directly at banks when they go public abroad.

6. Accelerate the opening up of financial sector to both domestic and overseas markets. Promote financial institutions in Hainan in developing and building up the capability of serving the opening up process, and supporting Hainan Free Trade Port to take initiatives to implement opening policies in the financial sector. Support qualified overseas institutions dealing with securities, funds, and futures businesses to set up wholly or jointly owned financial institutions in Hainan Free Trade Port and support financial institutions to develop new financial products and improve quality and efficiency of services in Hainan based on development needs of key industries such as tourism, modern service, and high-tech industry, etc. Meanwhile, promote the development of relevant over-the-counter derivative businesses to address needs for the construction of Hainan Free Trade Port. Hainan will be supported in building property rights trading venues on the basis of optimizing and upgrading existing trading venues, and non-residents will be allowed to participate in trading and fund settlement according to relevant regulations. Besides, support the established trading venues in Hainan Free Trade Port to roll out rules and institutional systems aligned with international practices in terms of membership, trading, taxation, clearance, settlement, protection of investor rights, and anti-money laundering; and support the establishment of property insurance, life insurance, reinsurance, mutual insurance and self-insurance institutions and companies in Hainan Free Trade Port within the framework of relevant laws and regulations.

7. Enhance the real economic capability of financial services. Support the issuance of corporate credit bonds, project revenue notes and special bonds for housing lease, etc.; promote pilot projects on the securitization of high quality tourism assets with stable cash flow; support financial institutions to carry out premium financing, warehouse receipt loans, receivables pledge, intellectual property pledge and other businesses in the field of trade in service provided that the laws and regulations are obeyed and risks are effectively prevented; support marine-related high-tech enterprises to take advantage of equities and intellectual properties rights, and promote the regulated and controllable development of shipping, logistics and supply chain-related financial products. Take initiatives to apply research achievements in the fields of artificial intelligence, big data and cloud computing in Hainan Free Trade Port in a law-abiding and orderly way; explore to establish commercial medical insurance services connected to international commercial insurance payment systems and support financial institutions in the insurance industry to cooperate with overseas organizations to develop cross-border medical insurance products.

8. Apply a more convenient visa-free entry policy. Open up more visa-free application channels to foreigners including self-declaration and invitation and reception by local entities, apart from invitation and reception by travel agencies. The restrictions on foreigners to apply for visa-free entry will be relaxed and foreigners will be allowed to apply for visa-free entry to Hainan for reasons including commercial trade, visit, family reunion, medical treatment, exhibition and sports event, etc. Apply the 15-day visa-free stay policy to foreign tourist groups traveling by cruise ships.

9.Apply a more open shipping policy. Yangpu-Port-of-China will be set as the port of registry, to simplify the inspection process, gradually release restrictions on the statutory survey of ships, establish the Hainan Free Trade Port international ship registration center, and creatively establish convenient and efficient ship registration procedures. Remove the restriction on foreign shareholding proporation for ship registration body. Under the premise of effective supervision and risk control, domestically built ships registered in Yangpu-Port-of-China and engaged in international shipping are entitled to export rate rebates as in the situation of export. Domestic ships with both domestic and foreign trade goods on board which transit at Yangpu Port are allowed to refuel with bonded oil required for the voyage, or tax rebate could be claimed if the ships refuel with locally produced fuel oil for the voyage. For container cargoes that meet relevant conditions and transit at Yangpu Port for final departure from China, a trial policy of tax rebate at port of departure will apply. Speed up the integrated development of shipping and port in Qiongzhou Strait.

10.Apply a more open policy on air transport. Promote the realization of the third and fourth freedom rights fo

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