WeChat QR Code

Home>Events>>News & Events

Integrated Institutional Innovation Is Needed in the Construction of Hainan Free Trade Port

2023-05-06 19:45:09       source:NISCSS

May 5, 2023

As the largest special economic zone in China, Hainan has unique advantages in deepening reform on all fronts, being the testing ground of the policies for high-standard opening-up. It is a major reform and opening-up initiative which was planned, deployed, and promoted by General Secretary Xi Jinping himself. In addition, its development was a strategic decision made by the Communist Party of China (CPC) Central Committee in light of the domestic and international situations after in-depth study and sound planning. The objective of the decision is to support Hainan in gradually building itself into a free trade port with Chinese characteristics, and establishing the free trade port policy and institutional systems step by step.  

General Secretary Xi Jinping has made it clear that we must uphold the leadership of the CPC and keep to socialism with Chinese characteristics, keep up with international economic and trade rules, facilitate the free and smooth movement of production factors, and establish a free trade port that follows the principle of high quality and high standards. He also came up with the idea that we should give priority to integrated institutional innovation, which provides a foundational guideline for the development of the Hainan Free Trade Port.  


During the construction process of the free trade port, we need to accelerate the adaption to a new round of changes in international trade and economic rules. In addition to this, we should take the initiative in addressing the uncertainty and complications exhibited in global economy and trade. Especially we should work on integrated institutional innovation, which will be the drive behind China’s active participation in the reconstruction of international economic and trading order and its creation of new systems for a higher-standard open economy.  

To do so, firstly, we need to install a talent-managing system that allows for smooth flow of personnel and minimizing barriers to their mobility based on the development needs of the Hainan Free Trade Port. This is a key objective of promoting integrated institutional innovation. General Secretary Xi Jinping has emphasized on various occasions that "talent is the primary resource,” and required that the construction of a free trade port in Hainan show Chinese characteristics, stay in line with China's national conditions, comply with Hainan's development positioning, and learn from the advanced operation practices and management methods of other free trade ports.  

Under this guideline, promoting integrated institutional innovation to build a large pool of talent has become an important task of the Hainan Free Trade Port. We need to establish an appealing and internationally competitive talent system, make better use of global innovation resources, bring in urgently needed and rare talent, and implement more active, open, and effective talent attraction policies.  

On the one hand, to satisfy the demands of Hainan in building a modern industrial system, we need to learn from advanced international experience and introduce a more open residence policy for the talent sought after in high-end industries. On the other hand, it is also necessary to adhere to a holistic and balanced approach so as to form a coordinated system of high efficiency to attract, train, manage, and serve talent. It should also be noted that the smooth flow of personnel requires cross-sector and cross-discipline cooperation. We therefore need to make the integrated institutional innovation more systemic, targeted, synergistic, and sustainable. 

Secondly, we need to create a business environment based on the rule of law, internationalization, and business facilitation, which is an important task that needs to be accomplished through integrated institutional innovation. Since following the rule of law can create the best business environment, constructing a business environment based on the rule of law should be given a high priority. Supporting legislations should be introduced under the Hainan Free Trade Port Law of the People's Republic of China.  

Specifically, we must equally protect the legitimate rights and interests, including property rights, of all types of market entities in accordance with the law in all aspects of legislation, law enforcement, judicature, and law observance. We must use the rule of law to regulate the boundary between government and market, respect the rules of the market economy, and adjust the interests of all types of market players within the framework of the rule of law through market-based means. We should also strengthen the awareness of observing the law among enterprises, and protect and serve high-standard opening-up.  

In practice, we need to build an evaluation index system, with scientific and dynamic quantitative indicators to make a comprehensive and objective evaluation of the business environment. While drawing on the principles and methods of international indicator systems, this system should be adjusted and optimized in accordance with Hainan's characteristics. At the same time, we should strive to establish a service-oriented government by improving its capacity to serve businesses and projects, and by bolstering relevant authorities' capacity for coordination and service.  

Thirdly, we need to launch a stress test for high-standard opening-up, which will serve as a critical channel for the further advancement of trade and investment liberalization and facilitation, as well as integrated institutional innovation. General Secretary Xi Jinping said, "The central authorities and relevant departments must put the country’s interests first, support the reform and innovation in Hainan, and promote the construction of the Hainan Free Trade Port to achieve new progress." He stressed that "with institutional innovation at the core, greater reform autonomy should be granted to Hainan to encourage bold trials, adventures and reforms.”   

During the process of building the free trade port, Hainan should play an active role as a testing ground for further opening-up and reform, by implementing clauses of certain international agreements on a trial basis before their application nationwide. Reform, innovation and its policy system will give the Hainan Free Trade Port particular advantages, making it a globally competitive platform for institutional opening-up in the fields of commodity, service, and digital trade. In this way, it will boost the deep integration of digital technology and the real economy. This in the end will enable China to take the initiative when participating in the making of economic and trading rules during the process of accelerating trade and investment liberalization and convergence with international standards in Hainan.  

YU TAO is director of the Research Center for Hainan Free Trade Port with Chinese Characteristics, National Institute for South China Sea Studies.