Apr 10, 2021, 09:15
Guideline sets out 33 detailed measures to further facilitate free trade on island
The central government on Friday launched a series of financial measures to turn Hainan Free Trade Port into a focal point of China's deepened reforms, showing the nation's latest efforts to further open up to the world, said experts.
The People's Bank of China, together with three other top financial regulators, released on Friday a guideline with 33 detailed measures, which are set to further facilitate free trade in Hainan, perfect its financial market system, further open up its financial market, enhance innovation, improve financial services and strengthen financial regulation.
The guideline will also help to strengthen Hainan's weak links and consolidate its financial base, the central bank said on its official website.
Chi Fulin, president of the Haikou-based China Institute for Reform and Development, said that financial opening-up is integral to systematic policy innovation in Hainan. In order to facilitate the flow of cross-border capital, financial reform and innovation is vital while offshore financial businesses should play a bigger role in Hainan, he said.
Under the recently announced guideline, the financial market in Hainan should shoulder more responsibility in serving the real economy. As such, competitive companies in Hainan are encouraged to go public or to expand via the multi-tranche equity market in the area, according to the guideline. Mergers and acquisitions aimed at transformation and industrial upgrading are supported, while qualified companies based in Hainan will be encouraged to issue corporate bonds.
Further financial opening-up is another highlight of the guideline. Banks in Hainan are encouraged to introduce qualified overseas strategic investors to improve their equity structure. By working more closely with insurers in the Hong Kong and Macao special administrative regions, Hainan should seek opportunities in offshore reinsurance businesses. Overseas institutions are allowed to set up wholly owned or jointly held futures companies in the area. Foreigners working in Hainan are allowed to participate in domestic securities investment.
Mark Wang, president and CEO of HSBC (China) Co Ltd, said that the construction of a free trade port is inseparable from financial services, especially cross-border financial services.
"The supportive policies announced today will help to attract more international institutions and capital, providing capital support for the construction of various projects, including infrastructure projects. The measures will activate Hainan's financial market in all aspects and accelerate the construction of Hainan Free Trade Port," he said.
Meanwhile, Hainan is allowed to carry out the outbound investment Qualified Domestic Limited Partner scheme. Qualified Foreign Limited Partners in Hainan are also allowed to freely manage their capital based on their balance. In addition, the foreign exchange registration process will be simplified.
Experts from Jingtian & Gongcheng Law Firm explained in a note that foreign equity investment firms will meet no threshold under the QFLP management rules in Hainan, and stand on a totally equal footing with similar domestic firms. The negative list mechanism is adopted for the investment scope of QFLPs in Hainan, which will help more foreign capital to invest in private equities and venture capital in the area.
Tao Jin, deputy director of the macroeconomic research center of the Suning Institute of Finance, said that Hainan Free Trade Port has gained paramount policy support, which will be translated into an unprecedented concentration of resources. The area's economic scale and efficiency will thus be largely enhanced. Successful experiences in Hainan are also likely to be promoted nationwide in the future, he said.
A master plan for Hainan Free Trade Port was released in June, which requires establishing a basic free trade port policy system with a key focus on facilitating free trade and investment by 2025.
By 2035, the free trade port system and operations in Hainan will be more mature. By the middle of the century, a high-level free trade port with strong international influence will be fully established, according to the plan.
What Shenzhen was in the 90s, Hainan can be in the 20s. An experimental hub for unique market reforms targeting specific sectoral transformations.
Lessons from Hainan can then be refluxed to Shanghai to make it the 21st century financial center of the planet.
Meanwhile, US naval fleets prowl nearby while inciting Taiwan separatists by ignoring the Shanghai Communique until some are now slyly qualifying the phrase 'there is but one China' to inveigle it with 'but we didn't say which one'.
All these are US attempts at deflecting attention away from its own domestic problems whichever hint its own diminishment.
It's trying to smear and tar China in order to whitewash its own misdeeds and self-only interests while continuing the tradition of imperialist sinophobia now targeted at the most successful CPC government in the world.
With its sycophants, expect the west to continue in conspiring to diminish China's growth but with depleting ammunition down to telling lies repeatedly about Xinjiang.
The present travails for China are however just a pitstop episode in her very long march of history.
Mischief's afoot from the cacophonic western barrages - so just be nimble to sidestep traps by calibrating responses in concert with proactive readings and preemptives.
Put more back into faster, more precise and intelligent public statements carefully assembled to preempt any attempt to twist facts.
The present escalation of prices for raw materials and shipment is also an opportunity to raise margins so as to apportion more funds for product improvement to scale up the value chain while riding on the supply chain advantage.
Globally achieve highest precision in manufacturing to remain the preferred global manufacturing powerhouse bar none on the success of the 5G-IoT rollouts.
Continue to expand trade with the 120 countries but hold fast to global resources without risking exposure to debt defaults. Count every cent and make every cent count. Don't flimflam anymore with funds.
Network the 10 megacities by networking all the digital platforms together so as to synergistically create unbeatable scale, speed and sourcing besides giant valuations from a single honeypot mega-market made accessible by the world's most modern megasized infrastructure.
Accelerate by blockchaining the digital currency as the twin to the supply chains, catalyst to the platform networks, and engine of capital flows.
Achieve chip autonomy by two converging paths : DUV-to-EUV reversed engineering, and ASML-bypassed graphene optoelectronics ecosystems. Once chip autonomy is achieved, fullscale digistisation will deliver new products, systems and high-precision engineering while capturing and unlocking richer stores of big data to enrich market efficiencies, reduce wastes, increase opportunities and motivate more investments.
Make fundamental research more engineering-specific by making and testing advanced materials in an algorithmic setting to achieve set parameters.
Create a national think-tank for business and financing models, international legal framework and marketing communications; coming together under one roof, the three are important components to achieve soft business power; once rolled out, the universities can tap into it to widen its output-input feedloops.
To bypass double-taxation agreements, make China the only tax-marginal oasis for best talents of the world.
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