December 2023
Yanting Pei and Teresa Huang
On November 7, 2023, Measures on Supporting Taiwan Compatriots and Taiwan-funded Enterprises to Participate in the Construction of Hainan Free Trade Port (hereinafter referred to as the “Measures”), which was jointly issued by 10 departments, including the Taiwan Affairs Office of Hainan Province and the Development and Reform Commission of Hainan Province, was formally released at the 2023 Taiwan Business Summit. [1]
There are 17 articles in the Measures, covering investment support, recommendation of key areas, cultural exchanges and several other aspects. It aims to further deepen cross-strait integration and development, attract Taiwan compatriots to fully participate in the construction of Hainan Free Trade Port, and create a new platform for exchange and cooperation with Taiwan at a higher level. Specifically, it includes but not limited to the following:
I. Investment support
1. Investment and settlement can enjoy the support of use of land and sea, and industrial policies
As per Article 2 of the Measures, Taiwan-funded enterprises are encouraged to invest and settle in the key parks of Hainan Free Trade Port and relevant cities, counties and autonomous counties, and the key parks of Hainan Free Trade Port and relevant cities, counties and autonomous counties may, according to the actual needs, support Taiwan-funded projects that are in line with the industrial development of the parks in the use of land and sea, as well as industrial policies.
2. Eligible enterprises can receive tax incentives
As per Article 8 of the Measures, eligible Taiwan-funded enterprises are supported to enjoy the same treatment as Mainland enterprises in terms of preferential tax policies, government procurement and listing on the mainland.
II. Encouraged areas of investment
1. Taiwan businessmen are encouraged to participate in the investment of four leading industries of Hainan
As per Article 1 of the Measures, Taiwan compatriots and Taiwan-funded enterprises are encouraged to focus on the four leading industries of Hainan Province, namely, tourism industry, modern service industry, high-tech industry and high-efficiency agriculture with tropical characteristics to integrate into the new structure of coordinated regional development comprising of “Three Poles, One Belt and One Area” (“Haikou Economic Circle”, “Sanya Economic Circle”, “Danyang Economic Circle”, Coastal City Belt and Central Ecological Conservation Area), and participate in the creation of “Two Bases” (headquarters base for Chinese enterprises to go to the international market and headquarters base for overseas enterprises to enter the Chinese market), “Two Networks” (air and sea international transportation network and international economic and trade cooperation network) and “Two Hubs” (the international shipping hub of the new western land and sea corridor and the aviation regional gateway hub facing the Pacific Ocean and the Indian Ocean). The Measures actively promote Taiwan-funded enterprises investing in the Mainland to expand their industries to Hainan Free Trade Port according to the needs of industrial development.
2. The agriculture and fisheries are also key recommended areas in the Measures
As far as agriculture and fisheries are concerned, the Measures have particularly proposed some favorable policies:
(1) The Measures encourage Taiwan compatriots and Taiwan-funded enterprises to participate in the investment, development and construction of central fishing port economic zones and modern sea ranches in Hainan Province. The Measures support the creation of “Hainan-Taiwan Modern Fisheries Cooperation Demonstration Zone” in parks with mature conditions, and strives to build an influential cross-strait fisheries cooperation demonstration base.
(2) The Measures support Taiwan compatriots and Taiwan-funded enterprises to standardize and safely introduce Taiwan’s high-quality seedlings and breeding, accelerate the promotion of the construction of a number of demonstration farms and production, research and learning bases of Taiwan’s high-quality fruits and vegetables, flowers and sea and freshwater products in the whole province, and promote the transformation and upgrading of Taiwan-funded agricultural enterprises in Hainan Province.
(3) The Measures support Taiwan compatriots and Taiwan-funded enterprises to participate equally in the production and operation of forest and grass seed in Hainan Province, and as for enterprises in line with Methods for Management of Import & Export, Production and Licencing of Seeds of Hainan Free Trade Port, the Measures further simplify the processing process, reduce the time limit for processing, and verify and issue the forest and grass seed production and management license well.
(4) The Measures give full play to the advantages of the whole island of Hainan as a pilot area for cross-strait agricultural cooperation, and step up efforts to support the construction of Chengmai Demonstration Base in the pilot area for cross-strait agricultural cooperation.
(5) The Measures encourage cities, counties and autonomous counties to set up “Taiwan Processing Parks” in industrial parks under their jurisdiction to attract Taiwan-funded agricultural product processing enterprises to invest and settle, thus forming industrial clusters.
3. Other areas of support
(1) The Measures encourage Taiwan-funded enterprises to actively declare key R&D specialties in Hainan Province.
(2) The Measures encourage Taiwan-funded consumer brand enterprises to strengthen cooperation with Hainan’s duty-free enterprises.
III. Cultural exchange promotion
In the aspect of culture, the Measures provide supportive policies on youth entrepreneurship, cultural exchanges among ethnic minorities, religious exchanges and university exchanges:
(1) The Measures support the construction of “Cross-strait Youth Employment and Entrepreneurship Demonstration Sites”.
(2) The Measures strengthen the construction of Baoting Cross-strait Exchange Base, make good use of the Hainan minority festival platform, carry out cross-strait minority cultural exchanges, and continue to deepen the kinship exchanges between minority compatriots in Hainan and Taiwan.
(3) The Measures support cities and autonomous counties inhabited by ethnic minorities to carry out the creation of cross-strait ethnic minority-friendly villages and towns, relying on the construction of ethnic minority characteristic villages.
(4) The Measures support the development of exchanges of Buddhism, Taoism and folk beliefs between Hainan and Taiwan.
(5) The Measures encourage universities in Hainan Province to carry out inter-university exchanges and cooperation with universities in Taiwan, introduce Taiwan’s outstanding faculty and expand the number of Taiwanese students enrolled.
In general, favorable policies proposed by the Measures are more targeted for Taiwan compatriots and Taiwan-funded enterprises, and for enterprises already prepared investment plans, Hainan is also an attractive investment destination.
[1] https://mp.weixin.qq.com/s/8TkS2SwJ_9zklHeq4y0o6A
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