Xi Jinping gives his blessing to Hainan’s efforts to expand free trade policies

Xi Jinping sees a bright future for Hainan.

On Tuesday, Xi made a brief trip to the southern island province, where he heard reports from the Hainan provincial leadership and delivered a speech on Hainan's development.

Some context: Xi’s visit comes at a pivotal moment for Hainan.

• The entire island, spanning over 30,000 square kilometers, is slated to become a fully operational free trade port by the end of 2025.
• The long-term vision is to develop Hainan into a larger-scale version of Hong Kong or Singapore, capitalizing on its strategic location and economic potential.

Xi gave his blessing for the island’s full-speed development, directing Hainan's officials to:

• "Focus on achieving the free and efficient flow of trade, investment, cross-border capital, personnel movement, transportation, and the secure and orderly flow of data"

Get smart: Hainan Island has the potential to become an alternative destination for re-exporting and a remanufacturing hub in Asia, bolstered by its policies of zero tariffs on almost all imports, ultra-low corporate income taxes, and minimal investment restrictions.

Get smarter: That potential will not be realized until the island develops a robust and equitable legal system that protects investors and allows for the seamless flow of capital and data.

The bottom line: Hainan still has a long way to go in establishing itself as a prime destination for global investors.