Can Hainan Island after the customs closure replace Singapore and Hong Kong to complement each other and jointly promote opening up! Hainan’s customs closure does not mean it will replace Hong Kong. On the contrary, the purpose of Hainan’s customs closure is to form complementary advantages with Hong Kong and jointly promote China’s further opening up and economic development.
Some people believe that after Hainan closes its customs, it will implement a zero-tariff policy, causing purchasing agents and goods to flow directly to Hainan, thus affecting Hong Kong’s status. This view is wrong. Hong Kong’s biggest advantage lies in its financial status. As a financial channel connecting the mainland and the world, this is something Hainan cannot replace in the short term. Hong Kong’s historical background makes it a more open and international city. In Hong Kong, almost all public facilities provide services in Chinese and English, and taxi drivers can speak English. These soft powers have made Hong Kong an international financial center.
In addition, Hong Kong has obvious advantages in talent and capital, and the Hong Kong Stock Exchange is also one of the largest exchanges in the world. These are difficult for Hainan to catch up in a short period of time.
The significance behind Hainan’s customs closure lies in manufacturing and commodity transit, with the goal of replacing Singapore and intercepting U.S. manufacturing. Currently, most goods from Southeast Asian countries need to bypass Singapore for transit when coming to China. However, with Hainan, these countries can transport goods directly to Hainan and then from Hainan to the mainland, which is more efficient and cheaper. For example, goods from Thailand to Shanghai are transited through Hainan five days faster than through Singapore, and the cost is 30% lower. The processing efficiency of Hainan Yangpu Port is also higher than that of Singapore Port.
Hainan is also backed by the huge market of mainland China. For international companies, they can choose to build factories in Hainan, enjoy the tax-free policy, and use Hainan’s location advantages to reach the entire mainland of China, Japan, South Korea and Southeast Asia. This allows Hainan not only to not compete with Hong Kong, but to complement Hong Kong’s capital and policy advantages and jointly become an important engine for China’s economic development.
Understanding this new trend will help grasp the direction and business opportunities of China’s economic development in the future.
