Target Duo: The Project of “International Tourism Island” in Hainan Special Economic Zone, China

Introduction

Hainan is the smallest and southernmost island province of the People's Republic of China (PRC) since 1988, consisting of various islands in the South China Sea. Hainan Island, the largest and most populous island under administration by the People's Republic of China, and the 42nd largest island in the world (The People’s Government of Hainan Province, 2021). The Chinese government established the Hainan province on what was then a closed-off and underdeveloped border island. Since 1988 Hainan was designated as the fifth Special Economic Zone (SEZ) in China, since the establishing SEZs was considered a breakthrough in China's opening-up. Aiming to be comprehensively developed by foreign investors, the establishment of SEZ in Hainan Province has made its coastal attractive resources for commerce and business, especially in the tourism sector. The relations between SEZ and tourism economy are tide in Hainan. In the past three decades, a series of initiatives have been set in order to seek the development of Hainan SEZ, especially to encourage the tourism economy development in Hainan. Due to the difficulty for bureaucratic reasons such as visa obtaining, travel restrictions, etc., Hainan has become an exotic substitute for Chinese economic elites, offering the opportunity for more social liberal activities. There has been a focus on domestic tourism from mainland China to this Island SEZ. The initiative of “International Tourism Island” has been developed since 2010. Along with its designation as a SEZ, this unique “SEZ Island” became as a “sandbox” of economic development policies, to attract foreign investment with its preferential tax rates and favorable business environment. However, as the largest SEZ and the first to encompass an entire island, Hainan SEZ did not receive a significant development as expected, but it has experienced an irregular development path. After an initial surge in tourism development following its establishment, Hainan SEZ received the reputation hindered by corruption, as well as a real estate bubble.

This chapter article studied the target duo of the Hainan SEZ in China, combining the SEZ as well as the International Tourism Island, to discover the facts about the economic development of Hainan SEZ since its designation in 1988, and the future way out of this southernmost island province of China.