Hainan’s New Law Will Allow Foreign Companies and Chinese Firms to be Governed by the Same Rules

After updating its cross-border business regulations, Hainan province in the South of China has become the first location in the nation to enable foreign businesses to conduct commercial activities under the same laws that oversee other Chinese enterprises. According to the Chinese Ministry of Commerce, “this is a significant milestone towards improving the increased accessibility of the Chinese international trading system, and is vital for the continuous growth of Hainan’s Free-Trade Port.” On Saturday, Hainan’s officials issued a list of limitations that could impact 11 sectors governed by the Provincial Bureau of International Economic Development and contains 70 control measures for all foreign firms operating in its territory.

Foreign firms will now be able to operate on the same terms as Chinese businesses in all circumstances of the non-specified services trade. Earlier, “exceptions from what is forbidden” mechanisms, were harsher and more complicated for international companies to abide by. As a result of this, the province’s commercial dealings with foreign nations are expected to be more transparent, thereby subsequently boosting investor trust levels. Hainan’s international competence is expected to improve as a result of this new system. “The new procedures provide for an appropriate safety net from local systemic threats,” the Hainan authorities explained.

Beijing announced the construction of an experimental free-trade zone in Hainan on April the 13th, 2018. With this initiative, Hainan’s harbor and the complete island will be involved with international labor markets, as well as in promoting commercialization and globalization in the process. To encourage investments and to establish a dedicated research infrastructure, Hainan’s government set out to establish a favorable environment for them. It is envisioned that by 2050, Hainan would have an advanced economy, top universities, cutting-edge research facilities, and be considered as the headquarters for major high-tech firms.

Hainan’s authorities have begun putting up a series of experimental international offshore technology and commercial zones around the island. This initiative was created for offshore businesses to establish themselves on the island under this model, which will now be open to both Chinese and international enterprises as a means of boosting Hainan’s progression in the fields of science and engineering. According to the government’s blueprint, 9 offshore development and business areas will be established in the Hainan Free-Trade Port, to engage high-quality innovation assets from overseas parties, and to promote international high-tech exchanges in particular. This initiative will be expanded in the future to include up to 11 industrial parks around this province.