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Way for China's Largest Economic Zone Back on Fast Track: Economist
Opening up resource-rich industries is considered an effective way to run Hainan's economy, an island province and China's largest special economic zone in the southern most part of the country.
Chi Fulin, a renowned economist on regional economy, said if Hainan could lead the country in opening up agriculture, tourism and marine industries, it could regain a fast growth rate boosted by overseas capital, technology, managerial practices as well as overseas markets.
Hainan is still suffering from the aftermath of a bubble economy in 1995, when its gross domestic product dropped to 4.3 percent, the lowest among all provinces in the country that year.
Chi, also the head of China (Hainan) Reform and Development Institute, said China's gradual incorporation into the global economy, especially the country's anticipated accession into the WTO, has provided Hainan with unprecedented opportunities.
For example, Hainan accounts for one-third of the country's tropical land coverage and has the advantage of developing a high-yield tropical agriculture. So far, Hainan, one of China's designated agriculture cooperation zone with Taiwan, has introduced 95 percent of Taiwan's high-grade tropical fruit strains.
The province, surrounded by the South China Sea, is considered the most important processing center for tapping into abundant marine resources, such as fishing, offshore oil and natural gas.
Chi said although Hainan is designated as an economic zone, over half of the island is farmland, orchards and forests. The only effective way of boosting the local economy is to open up resources for overseas investors.
Established in 1988, the Hainan economic zone has attracted a large sum of capital from at home and abroad, amounting to 136 billion yuan (16 billion US dollars). This capital accounts for two-thirds of the province's total fixed infrastructure investments.
In the next 15 years, Hainan needs to draw in 900 billion yuan (108 billion US dollars) in order to sustain a double digit growth, said Chi.
He said unlike many inland provinces, Hainan has laid a solid and sound free market economy, since the province was turned from virgin land into an investment magnet.
Hainan has the potential of further attracting foreign investment.
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