China’s economic planners have made the decision to tailor Hainan, a province in the South China Sea, into a Free Trade Port (FTP). In Hainan, a Smart City is welcoming not only many high-tech industries but could also be a game-changer for the global fintech industry.
Hainan’s Free Trade Zone Smart City has been built on the base of Hainan Resort Software Community (RSC), one of the largest technological parks in the world, which is a strategic joint project between the Hainan Provincial Government and China Electronic Corporation, a Global Top 500 company. This ecosystem has already attracted more than 5,000 enterprises which include internet giants Tencent, Baidu, XiaoMi, Huawei, Huobi with multi-billion projects such as Tencent Eco-village, China Game Cyber Port and The BlockChain Research Centre of Oxford University to name a few.
These nods of approval are encouraging for any high-tech industry, but even more so for fintech as it continues to ride the wave of digital economies alongside the industries of Telecommunications, Internet of Things, Blockchain and Artificial Intelligence. Already these verticals have found a home in the Smart City, side by side with other fintech opportunities.
William Suen, the International Business Director in Hainan Resort Software Community Group, Hainan FTP Blockchain Pilot Zone said: “The Hainan FTP Smart City has always been an aspirational project. Besides all the tech, service trade and advanced manufacturing, we are also keen to welcome the fintech industry as this is an ideal location for these businesses to thrive in.”
The Hainan FTP Smart City has also been announced as a pilot Zone and a sandbox for Blockchain technologies. The Blockchain Trial Zone was launched in October 2018 by the RSC to develop the digital industry in the area. Besides the research institution, a Blockchain institutional innovation centre will also be launched by the RSC in a joint collaboration with the Renmin University of China. Through its collaboration with Oxford University, the officials aim to gather global talent in the blockchain technology industry.
Suen has been involved in the project since 2015, but the cooperative project between Hainan Provincial Government and China Electronic Corporation, was officially set up in 2008 with an authorized capital of 1.6 Billion RMB. RSC has since become a leading high-tech industry park under the principle of a market-based operation with governmental support and has developed the high-tech Park into a mini-city that continues to nurture Business, Innovation, Health, Education and Communication. He said, “The RSC receives more than 200 groups of visiting delegations every day, from many enterprises from all over the world. Already K&G, an enterprise from ASEAN, has set up its global operation centre in Hainan RSC, a British Esports and AR/VR firm that has set up its Asia-Pacific headquarters in Hainan RSC and an Italian game company decided to relocate its team from other parts of Asia to RSC. the RSC has more partners from nations such as Israel, USA, Canada, Russia, India, Australia, France, Russia and Switzerland and we have launched an Innovation Fund of 10 Billion has to invest worldwide in innovative projects. The RSC is founding a Global Gaming Industry Alliance and Global Innovation and Entrepreneurship Union.”
Hainan’s FTP is determined to highlight China’s reform and opening up to globalisation. This year, Hainan has more than 100 international airlines in operation and adding three new international airlines every week, including recent news that China Eastern is set to launch a new Hainan based airline with Juneyao.
By promoting duty-free shopping, cultural immersion and medical tourism including in particular healthcare, the destination is about to become one of the most sought after locations for global companies to grow in Asia and has been coined the ‘new Singapore’. Hainan has one of the least pollution levels in China and is known as a unique and clean tropical island with pleasant all-year-round weather.
The lifestyle opportunities will encourage many western fintech companies to consider Hainan as a new base with its Ecological Zone, where residents enjoy the beauty of nature within green zones of Hainan Island. Coupled with an international infrastructure boasting kindergarten to primary school, middle school, high school education, and international network access, it seems may seem to some a wonderful location to start a business, study, work and live.
Adds Suen, “It reflects the Chinese dream for a fulfilling future and a desire for the preservation of human values such as harmonious lifestyle piece in mind, happiness in heart, healthy food and environment, physical activities and affordable joy of life, as well as mindfulness. This lifestyle alongside the development of high technologies. Creativity and invention makes it one of the most exciting projects in the word today and an area which is the most open in the entire country.”
The benefits for entertainment companies to look at the opportunity in Hainan are well established but Suen summaries it best when he says: “Compared with China’s other 18 free trade zones and the Hong Kong Special Administrative Region, Hainan’s main advantage is institutional innovation. Through institutional innovation to unleash the potential of industries such as fintech, Hainan will act as China’s regulatory sandbox, implementing new access and regulatory policies for all fields and industries. This will help existing industries take full advantage of Hainan’s free trade port policies to unlock their business potential and achieve new growth in Hainan. As a pilot zone of Hainan Free Trade Port, Hainan RSC has taken the lead in exploring institutional innovation.”