On April 13, 2018, the Party Central Committee decided to support the construction of a free trade pilot zone on the whole island of Hainan, and support Hainan to gradually explore and steadily promote the construction of a free trade port with Chinese characteristics. The Hainan Free Trade Zone and Free Trade Port are the symbolic explorations of China's new round of opening up to the outside world.
What is the core of the construction of Hainan Free Trade Zone and Free Trade Port? Reflecting on the past thirty years, what lessons are worth thinking about in Hainan? In Hainan's new round of expanded opening up, how to balance opening up and risks? On these issues, the Beijing News interviewed Cao Yuanzheng, an adviser to the People's Government of Hainan Province and chairman of BOC International Research Corporation, and an economist during the Boao Forum for Asia's 2019 Annual Conference.
In Cao Yuanzheng's view, the key to the construction of the Hainan Free Trade Zone is to set standards and explore the creation of Hainan standards and guidelines, which can be copied and promoted to the mainland and promote the reform and opening up of the mainland. In addition, the core of the development of the Hainan Free Trade Zone and the Free Trade Port must also handle the economic ties between Hainan Island and the mainland, and while opening up with the international community, it must be open to the mainland. Compared with the hinterland, Hainan's reform and opening up cannot go too fast or too slowly, and it must properly handle this "gap" with the process of reform and opening up in the hinterland.
For Hainan's exploration, Cao Yuanzheng said bluntly that in the new round of expanded opening up, Hainan's biggest risk is not to open up and dare not do anything. Hainan should be bolder and follow the spirit of exploration in the reform and opening up of that year to "kill a road."
"The key to the construction of Hainan Free Trade Port is to establish Hainan standards"
Beijing News: Hainan has a thin financial foundation, how to innovate in finance when developing free trade zones and free trade ports?
Cao Yuanzheng: The opening up of the Hainan Free Trade Zone and the Free Trade Port is mainly the opening of the service industry, and Hainan's financial services should be linked with the opening up of the service industry. Therefore, Hainan's financial innovation is mainly the innovation of financial products related to the service industry, rather than the opening of the financial market and the construction of a financial center in the general sense. For example, after the opening up of Hainan's education industry and medical industry, cross-border transactions have increased, requiring multi-level financial institutions to provide rich and diversified financial products. The core of Hainan's future financial innovation is the innovation of financial products related to cross-border and cross-island related to individuals.
The construction of the Hainan Free Trade Port can not only promote the innovation of financial products, but also play a great role in promoting the internationalization of the RENMINBI with the increase of cross-border transactions.
Beijing News: How can Hainan attract more financial institutions to participate in the construction of the free trade zone?
Cao Yuanzheng: The relevant documents make it very clear, "Only when there is something to do is there a person." For example, after the opening up of the education industry, if Hainan allows Sino-foreign joint ventures to run schools, the world's well-known universities gather in Hainan, cross-border transactions increase, and financial demand is strong, financial institutions will naturally come together. Attracting more financial institutions cannot simply rely on policy inclination, but to develop industries that need financial services. If there is nothing to do, no matter how good the policy is, what is the point of financial institutions coming here?
However, to attract institutions, affairs, and people to gather, we must explore and establish a set of standards, and form a set of systems, methods, and international common practices. For example, Hainan now has a Boao Medical Pilot Zone, if a foreign patient who comes to seek medical treatment has a doctor-patient dispute, what standards and practices are used to adjudicate this dispute? This requires a specific criterion to solve.
There are three models of global free trade ports: the Singapore model, the Hong Kong model, and the Dubai model. The Singapore model is a free trade port with a high degree of consistency between sovereignty and governance, and the sovereignty and governance of the Dubai model are between consistent and inconsistent free trade ports. Among them, there are about 20 free trade zones in Dubai, and the financial regulatory policies in these free trade zones are different from the financial regulatory policies and regulations in other parts of Dubai, but adopt British legal provisions, and these laws and regulations do not only work in the United Kingdom, but are internationally accepted.
Returning to the issue of medical disputes in the free trade zone, is it possible to solve this problem by referring to the experience of other free trade zones and free trade ports in the world? It is not that the construction of the Hainan Free Trade Zone is completely based on the Dubai model and the Hong Kong model, but in the medical or educational special zones, etc., in response to disputes and other issues in the industry, the international law is adopted, rather than Chinese law. This special arrangement is somewhat similar to extralegal jurisdiction, which is not governed by Chinese law, but abides by international practices and laws. Only by fixing these special arrangements and forming a fixed set of rules, guidelines and standards can the free trade port be built and can people and things be attracted.
The key and core of the construction of the Hainan Free Trade Zone is to set standards and explore the creation of Hainan standards, which can be copied and promoted to other regions.
"The core of Hainan's economic development lies in whether to properly handle the economic ties between Hainan Island and the mainland."
Beijing News: It has been more than 30 years since Hainan established a provincial special economic zone, but there seems to be some gap between the development status and everyone's expectations. Standing at a new starting point, in order to develop better, is it necessary to reflect on the exploration of the past thirty years?
Cao Yuanzheng: It should be said that this is a very big topic, and it really needs to be reflected.
The establishment of the special zone in Hainan has brought tremendous changes to Hainan, and it has suddenly changed from the bottom of the pocket of reform and opening up to the forefront of reform and opening up. In the past 30 years, Hainan has developed very fast. But there are indeed many lessons worth learning, such as Hainan is the only region in the country where there is a real estate bubble, the only province where banks have gone bankrupt, and the only area where development zones have failed. Basically, Hainan has enjoyed the policies that should be enjoyed, and where it is necessary to wrestle, Hainan has fallen once.
Summarizing hainan's development in the past 30 years or so, it can be said that "success is also an outlying island, and defeat is also an outlying island", and Hainan's development must properly handle its relationship with the mainland.
From the perspective of development advantages, Hainan and the hinterland are not linked, and the special arrangements made for them will not affect the overall situation of the whole country. But on the other hand, Hainan's 32,000 square kilometers, 9 million people, this market is not enough to support a larger economy.
In order to support the development of Hainan, Hainan encouraged tourism, and when the mainland was still in the era of housing division, Hainan had already seen the earliest commercial housing in China, and eventually a real estate bubble appeared.
The future success of the Hainan Free Trade Port and the Free Trade Zone lies in whether to handle the economic ties between Hainan Island and the mainland, compared with the mainland, Hainan can not go too fast, nor can it go too slowly, we must deal with this "gap". The development of the Hainan Free Trade Zone and the Free Trade Port must be connected with the mainland while opening up with the international community, and the construction of the free trade zone and the free trade port must be linked with the reform and opening up of the mainland, and cannot become an isolated island hanging overseas.
Therefore, as just mentioned, the core of the construction of the Hainan Free Trade Zone is to set standards and explore the creation of Hainan standards, which can be copied and promoted to the mainland and promote the reform and opening up of the mainland. This will be Hainan's greatest contribution to China's reform and opening up.
Beijing News: Just now you also mentioned that Hainan has experienced a real estate bubble. But now in order to curb speculation, strict regulatory policies are being implemented. The normal market should be a dynamic market, in this round of reform and opening up, how can the Hainan real estate market both develop and avoid bubbles?
Cao Yuanzheng: The market should develop, and at the same time avoid the kind of real estate bubble that appeared before, and the development direction is mainly based on the rental market.
Because we see two phenomena, first, the real estate volume in Hainan is indeed very low, and all good resources are wasted. Second, Hainan wants to develop tourism, the population is increasing, houses are sold, and the vacancy rate is very high. To solve the above problems, it is necessary to revitalize the utilization rate of stock, so that a house can be used by more people, and the development of the rental market is the direction of reasonable arrangements for existing stock housing.
In addition, in the future, the development of real estate in Hainan will also go in the direction of building intensification, freeing up more space for ecological protection. Now Hainan is building houses in the east and west, not only in Sanya Haikou, but also in the town near Wuzhishan, there are high-rise buildings, such a layout will definitely affect the ecology. The layout of Hainan real estate should be dispersed to concentrated, concentrated in Haikou and Sanya.
"We must carefully analyze and summarize the lessons of history."
Beijing News: In Hainan's new round of expanded opening up, how to balance the relationship between opening up and risk prevention?
Cao Yuanzheng: I think that in the new round of expanded opening up, Hainan has no risk, and the biggest risk in Hainan is that it is not open and dare not do anything. Hainan should be bolder and follow the spirit of exploration in the reform and opening up of that year to "kill a road." During the reform and opening up, everyone thought that the introduction of foreign industries was terrible, but in the end China could not only dance with wolves, but even eat the "wolves". Trump has also said that China's accession to the WTO is a big mistake made by Americans. For the opening up of Hainan's service industry, the most important thing is to introduce it as it was 40 years ago, and then talk about going out.
Ten thousand steps back, after the introduction, what if it is broken? Fall in the middle and get up in the middle. Of course, in the new reform and opening up, Hainan must seriously analyze and sum up the historical lessons and experience -- where are Hainan's shortcomings and what problems exist in Hainan?
Beijing News: In the long run, how should Hainan be positioned?
Cao Yuanzheng: The Hainan issue should be discussed in the context of a new round of opening up. Hainan should take the strategic vision as the starting point, face the sea, develop the marine industry, become the strategic fulcrum of the strategic gateway to the Indian And Pacific Ocean, become the core intersection of the China-ASEAN Free Trade Area, and create the South China Sea Economic Cooperation Zone. Conceptually speaking, Hainan should be renamed Nanhai Province, and the South China Sea should be skimmed away with its back to the mainland and facing the sea.
The rise of the West in the 19th century relied on the rise of the marine economy, the core of which was a market economy and free trade, and China was unfamiliar with this set of ideas. Hainan should work in this direction from the bones, embrace the marine civilization, embrace the mainland, and become the hub of China's passage through the South China Sea, which is the big historical pattern that the South China Sea should have.
Beijing News reporter Hou Runfang Intern Xie Bilu Editor Liu Xiaoyang Proofreader He Yan