A couple of months ago SCALA China announced its latest project, ‘The SCALA Hainan Overseas Factory Project of 2025’ and as part of this recent announcement we are writing a series of articles as to why doing business in Hainan (an island province at the southern tip of China), is a good strategic choice.
In this short piece we will be exploring which industries can benefit the most from Hainan’s policies.
- Logistics industry
The logistics industry is set to boom. As Hainan plans to become a large free trade port, its location will naturally attract a huge demand for logistics. It is expected that the demand for logistics will also become more diversified as foreign logistics companies engage with Hainan’s incentives. There are a lot of opportunities for small businesses wishing to expand into Asia to improve the efficiency of their existing transport routes. The free trade port will increase transit logistics flights and help improve the global flow of goods. And, with the further promotion of global trade, the logistics industry is set to benefit massively from Hainan’s FTP.
- Real estate industry
The real estate industry is set to benefit as residential policies look to curb speculative demand and support end-users. The property market looks to augment commercial and industrial development bringing with it more opportunities. It is suggested that developers pay extra attention to the long-term policy goals and seize upon the upcoming opportunities after thorough due diligence. The aim is to strengthen the real estate market and the sector has become a key recipient of Fixed Assets Investment (FAI). Despite the decline in real estate development investment due to the government’s restrictions on land use, due to favorable policies and the heavy influx of capital, there will be a great increase in the demand for housing.
- Financial Services Industry
The financial service industry also will benefit massively from Hainan’s policy. China’s financial regulators have introduced several polices that will help streamline the flow of capital. These new sets of policies include increased yuan convertibility and market access for foreign investors. Indeed, to enhance foreign participation in Hainan’s sector, regulators have supported the establishment of joint-venture banks that allows the set-up of Qualified Limited Partners (QFLP). Regulators will also grant quotas for qualified fund managers to raise money in China for overseas investments. Hainan has the potential to become a huge financial center as the island also plans to relax restriction on the personal use of foreign exchange and allow residents purchase properties in Hainan.
- Traveling – Dining, Hotels, Shopping
The last industry is tourism. Regulators have introduced lots of policies all aimed to boost the tourist sector. Some of the policies introduced include: expanding duty-free, promoting medical tourism and potentially allow forms of gambling not found in the mainland such as sports lotteries. In a further effort to boost tourism, Hainan will ease market access requirements for foreign investors to host temporary exhibitions and festivals. The aim is to make Hainan into an area like Hong Kong with modern services including health and elderly care.
Want To Find Out More?
Please contact Juliette Pitt SCALA’s International Business Executive at [email protected] for more details and we will be happy to clarify any further questions you may have.