China’s largest tropical island Hainan will expand visa-free travel to tourists from 33 countries from May.

The list of new countries added to the list of visa-free travel can now by-pass China’s cumbersome visa process and stay for 30 days. They include the UK, Russia, France, Germany, the US, Canada, Monaco and Gulf countries UAE and Qatar.

The move is designed to draw not only tourism, but trade and investment to the island billed as China’s Hawaii. China aims to establish a free trade zone in Hainan by 2020.

Nadejda Popova, travel project manager at Euromonitor International, told Verdict:

This is part of a bigger effort of the government to open up this region to not only tourists but businesses.

Popov said that introducing visa-free travel is the ‘first step in opening up new markets’.

It also follows government plans to ‘open up’ the island with reforms allowing and encouraging companies to set up their headquarters there, and invest in projects, such as the construction of a new free-trade port, she said.

It’s definitely their ambition to diversify and open new areas within China to international activity.

Visa-free stay for up to a month can boost tourism flows, and we see similar trends happening in Dubai. They have opened their practices for visa regulation for Russian travellers boosting that flow of travellers.

The announcement also comes days after China’s President Xi Jinping unveiled plans to designate Hainan a pilot free-trade zone.

In statements made at the Boao Forum For Asia, dubbed China’s Davos, Xi outlined hopes that the island’s new autonomous status would help it emerge as a hub for tourism, agriculture, medicine and high-tech sectors.

Xinhua said:

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Hainan will be granted more autonomy to reform, and speed up the fostering of a law-based, international, and convenient business environment as well as a fair, open, unified, and efficient market environment.

The 59 countries with visa-free access to Hainan

Albania Argentina Australia Austria Belarus Belgium
Bosnia and Herzegovina Brazil Brunei Bulgaria Canada Chile
Croatia Cyprus Czech Republic Denmark Estonia Finland
France Germany Greece Hungary Iceland Indonesia
Ireland Italy Japan Kazakhstan Latvia Lithuania
Luxembourg Macedonia Malaysia Malta Mexico Monaco
Montenegro Netherlands New Zealand Norway Philippines Poland
Portugal Qatar Romania Russia Serbia Singapore
Slovakia Slovenia South Korea Spain Sweden Switzerland
Thailand UAE Ukraine UK US

New era of openness

The Chinese Government is using Hainan as a testing ground for new trade reforms that address US President Donald Trump’s criticism of China’s trade practices.

At this year’s Boao Forum, held on the island, President Xi proposed reforms to help increase imports to reduce the trade deficit with some countries, expand financial and automobile industry market access and enforce intellectual property protection policies from both foreign and domestic companies.

China economist at Capital Economics, Chang Liu said:

Hainan is China’s largest socioeconomic zone so has traditionally been a place where China has tested out some of their polices. If it is successful it will be implemented throughout the country.

The timing could also be related to recent pressure on Chinese companies being too closed on fair-trade practices.

The declaration of the free-trade zone was also a big deal for the markets, with shares in some of the island’s biggest companies on the Hong Kong index surging 10% on their daily limit on Monday, Chang added.

Developer and resort manager Hainan-based HNA Innovation, Hainan Dadonghai Tourism Centre Holdings, Hainan RuiZe New Building Material, China Hainan Rubber Industry and beverage maker Hainan Yedao all leapt 10%.

Chang said:

Any companies with links to Hainan, their stocks surged.

The movement came as the island’s biggest conglomerate, HNA Group, tries to balance debt woes and offset pressure from creditors after a global acquisition spree.

Xinhua news agency quoted deputy of China’s State Immigration Administration Qu Yunhai as saying:

The eased visa-free access to Hainan is part of China’s effort to build the province into ‘a free trade port with Chinese characteristics’.

By extending the policy to individuals and the stay to up to 30 days, the government aims to attract more international tourists, nurture the tourism industry and meet the needs of foreign individuals.

The island has become a famous tropical resort for overseas tourists in recent years, with the number of overseas tourists exceeding 1.1 million in 2017, up nearly 50% year on year.