The new title allowed Hainan to import, duty-free, any materials necessary for the production of exported or domestically sold goods.
The province was also exempt from the government’s export quotas. In addition to unlimited export internationally, Hainan-produced goods would now be favored for sale in mainland China as well. Foreign investors were also exempt, for the first two years, from any government profit taxes, and land rights on the island could be bought from the government for 70 years.
The new policies were enormously successful in promoting foreign investment. In the province’s early months, investments of over USD110 million poured in from over 100 different companies. In 2007, industry in Hainan exceeded agriculture for the first time as the main economic resource.
Hainan today remains both the smallest and southernmost of China’s provinces. The island has gained a reputation both domestically and internationally as a vacation hotspot, for its beautiful beaches and tropical climate, and it continues to grow and develop as an economic frontrunner.
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