China’s economic experts say the Communist Party is preparing to recreate a Hong Kong in Hainan after destroying it. This is an aerial photo of Haikou Port, the capital of Hainan Province.
The announcement of the Communist Party’s plan to seal off the entire island of Hainan by 2025 comes nearly one year after the announcement of the plan. The Chinese Communist Party has recently announced the progress of the “Hainan Free Port” project. According to Xie Tian, an expert on Chinese economic issues, the CCP’s plan to destroy Hong Kong and then recreate a free trade port in Hainan is a joke.
On May 18, Jin Xiandong, a spokesman for the National Development and Reform Commission of the Communist Party of China (NDRC), said at a regular press conference in May that since the release and implementation of the “General Plan for the Construction of Hainan Free Trade Port” on June 1, 2020, the initial framework of the free trade port system has been established. However, Jin Xiandong did not disclose any substantive content.
CCP’s building of Hainan free port was strongly criticized
Last June, the Chinese Communist Party launched a plan to make Hainan a “zero-tariff free trade port” like Hong Kong by 2025, while pushing through a “Hong Kong version of the national security law. The Beijing authorities said that the policy and institutional system of the free trade port will be established in steps and stages, “with the aim of having the hardware conditions for customs clearance by the end of 2023 and completing the preparatory work for customs clearance by the end of 2024.”
However, the CCP requires that the Hainan free port must be socialist. Liu Zhigui, secretary of the CCP’s Hainan Provincial Committee, declared at the launch of the General Plan for the Construction of Hainan Free Trade Port on June 8 last year that “unlike many free trade ports in the world, which are capitalist in system, Hainan Free Trade Port is a free trade port with a socialist system of Chinese characteristics” and “does not allow the The Chinese Communist Party (CCP) has issued a statement to attract foreign investment.
To attract foreign investment, the Chinese Communist Party has issued 60 preferential policies for the Hainan FTZ, but current affairs commentator Liu Rishao argues that “the Hainan FTZ is actually not much different from the form of FTZ advocated by Beijing in the past. In a place where the rule of law does not manifest, the free trade port is difficult to do big, Shanghai, Shenzhen free trade zone did not a climate”.
Experts: Recreating a Hong Kong is a fool’s errand
In response to Hainan’s preferential conditions and the latest official announcement by the Chinese Communist Party, the Epoch Times reporter interviewed Xie Tian, a professor at the University of South Carolina’s Aiken School of Business and an expert on China’s economy.
Xie Tian said, “Hainan’s policies are basically on par with Hong Kong’s in terms of economics and tariffs, but the Chinese Communist Party’s dream of recreating a Hong Kong is a fool’s dream. It hasn’t figured out why Hong Kong became Hong Kong. Zero tariffs are only superficial, and many countries can adopt zero tariffs or create free trade zones, but in reality it’s not that simple.”
He said, “Hong Kong is successful because it used to have a very good legal system. From speech to justice, freedom of speech, independence of the judiciary, Hong Kong had a very well-developed social security system left by Britain. The Chinese Communist Party basically destroyed the Hong Kong free port, and now it’s ready to create another free port, isn’t that a joke.”
Xie Tian also said, “Hainan sealed the island, creating a country within a country, the mainland needs to enter the customs to enter. But now there is a question of what kind of legal system to adopt? Who will arbitrate? Does Hainan have the right to independent arbitration? If a dispute goes to the Supreme Court of Hainan, will it still have to be decided by the Supreme Court of the Communist Party of China? In that case, Hainan is still a province of China, not a free port.”
He said, “Another issue is the currency. If products from all over the world can be freely imported and exported, what currency will be used to trade? If the yuan is used, and if it is freely convertible, then Hainan will become a haven for money laundering for senior Communist officials. In that case, the yuan would depreciate rapidly and significantly, and instead of the current 1:6 exchange rate, the yuan (to the U.S. dollar) could be 1:30, or even 1:60. then China would have two exchange rates, a double track.”
Xie Tian concluded, “The Chinese Communist Party is actually painting a tiger from a cat; it has not figured out and is unwilling to recognize the fundamental guarantee and prerequisite for Hong Kong to prosper and become a free port. The most crucial thing is that one is an independent judicial system and the other is a legal system for business and trade, and it is useless to just lower the tariff. That’s why I say it is talking in dreams and painting a big picture.”
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