KPMG is helping to build Hainan Island into a quality free trade zone as a gift for China’s 70th birthday
Building Hainan Island into a quality free trade zone
On 28 May 2019, KPMG Advisory (Hainan) Co., Ltd. officially opened in Haikou, and on the same day it also held a sharing session that looked at Hainan’s development path from a third-party perspective.
Since signing an investment cooperation agreement with the Haikou Municipal Government in 2018, KPMG has been studying and exploring the development paths that may apply to the Hainan Free Trade Zone. In addition to being the 70th anniversary since the founding of New China, 2019 is also the first year in which the pilot free trade zone and free trade port’s policies will be fully implemented. With this in mind, KPMG will assist in effectively building a quality free trade zone in Hainan by cultivating an international business environment and providing enterprises in the province with first-class, in-depth services.
Benny Liu, Chairman of KPMG China, said: “Hainan is facing an unprecedented opportunity brought about by China’s strategic initiative to develop a pilot free trade zone and free trade port with Chinese characteristics. The government has issued a series of preferential policies that provide Hainan with a greater mission and a strong impetus to deepen reform and opening up. The province will serve as a ‘trial zone for deepening the opening up process, a trial zone for a national ecological civilisation, an international tourism destination, and a key area for major strategic services. We are full of confidence with regard to its future.”
Faced with the opportunities and challenges brought about by the new pattern of globalisation and new rules on international investment and trade, building the pilot free trade zone is a major, meaningful step to deepen China’s reform and opening up. The Hainan Free Trade Port—which features business conditions and policies that are much more favourable than the general free trade zones—is currently the only one of its kind in the country. Since the beginning of this year, Hainan has gained 31 new enterprises whose shareholders are involved in global companies, China’s top 500 enterprises and China’s state-owned enterprises. As of the end of this April, the province’s actual use of foreign capital amounted to USD 102 million, a twenty-fold year-on-year increase. In this new era, enterprises should adopt a proactive attitude and join hands with Hainan to work towards new successes and achievements.
Ronald Sze, Vice Chairman of KPMG China, said: “The free trade zone’s most important aim is to develop a range of industries. Haikou is the province’s capital city and is also located along the Belt and Road. It serves as the province’s political, economic, cultural and technological centre, has significant environmental advantages and is an international tourist destination, in addition to being a special economic zone. With this in mind, KPMG will spare no effort in exploring how to help construct a free trade port with Chinese characteristics and enhance innovation in the reform and opening up process.”
The Hainan Free Trade Zone has been strategically positioned as China’s key gateway to the Pacific and Indian Oceans. On the one hand, this zone can encourage Southeast Asian countries to increase imports and exports and their direct investment in China. On the other hand, it will bring new opportunities to neighbouring countries and regions by promoting the flow of production factors between Southeast Asia and the rest of the world. At present, the province has taken a series of measures to cultivate an atmosphere that is more law-based, internationalised and convenient in order to create the conditions necessary to achieve benefits for both enterprises and the region in general.
Ricky Wong, Managing Partner of KPMG Southern Region, added: “In only one year, the free trade zone has made remarkable achievements in deepening the reform and opening up process. As a gift for the country’s 70th anniversary year, KPMG will help explore development paths and speed up the construction of ‘multiple economic pillars’ by analysing the province’s actual economic landscape, industrial development and geographic advantages.”
As China’s newest free trade zone, the Hainan Free Trade Zone features more open and globalised characteristics. Going forward, KPMG will help turn Hainan into a successful pilot free trade zone that serves as a model for high-quality economic growth. In order to accomplish this, KPMG will strive to identify opportunities and strategies for institutional innovation and carry out these strategies in a practical and forward-looking manner.
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