Yangpu Economic Development Zone Surges Forward

The skies over Yangpu Peninsula in Beibu Bay are blue, and the clear ocean rolls gently onto the broad shores. Once a barren wasteland, this area is now home to a bustling scene of cranes, container trucks, and giant ships anchored at port.

In 1992, the State Council officially approved the construction of Yangpu Economic Development Zone, or simply Yangpu, in Hainan Province. Yangpu became the first state-level development zone in China to be funded by foreign investment and to benefit from bonded zone policies. On June 1, 2020, the Overall Plan for the Development of Hainan Free Trade Port—the Overall Plan for short—was released. The Overall Plan assigned to Yangpu a key role—it would be a pioneer and pilot zone for developing Hainan Free Trade Port, serving to accumulate practical experience for guiding the port's development and the implementation of separate customs controls for the whole island.

When he inspected Yangpu on April 12, 2022, President Xi Jinping pointed out that as a pilot zone and demonstration area for Hainan Free Trade Port, Yangpu should summarize Hainan's experience of developing a special economic zone, leverage the preferential policy making Yangpu a port of registry, and be bold in pursuing innovation and testing out new initiatives. Since then, Yangpu has embraced new historical opportunities and generated further vitality.

Xiaochantan Port Area at the Yangpu International Container Terminal. PHOTO BY DENG XIAOLONG

Boldly pursuing innovation and invigorating the Port of Yangpu

When he was touring Yangpu Exhibition Hall, President Xi halted in front of an exhibit which was a model of the China COSCO Shipping Corporation freighter Xing Wang, the first vessel to be registered at Yangpu after the policy making it a port of registry was issued.

The Overall Plan includes five unique policies for making "China Yangpu Port" a ship registration port, four of which are related to shipping. In line with its goals, Yangpu has concentrated on systems integration and innovation. With instituting a ship registration system as a priority, it has accelerated the implementation of shipping policies for a free trade port and worked continuously to attract and accumulate production factors important to its development, leading to the rapid growth of the port and shipping industry.

At present, 33 international vessels, equaling 5.16 million deadweight tons, are registered at China Yangpu Port, placing Hainan second in the country for registered international navigation ships in terms of total cargo tonnage. Its container throughput exceeded one million TEUs (20-foot equivalent units) for the first time in 2020. Since then, the port has posted the fastest growth rate among national seaports with a container throughput of over one million TEUs for two consecutive years. It has opened 39 domestic and foreign trade routes, which serve almost all coastal Chinese cities and major ports in Southeast Asia, to create a new configuration of shipping routes to serve domestic and foreign trade over both long and short distances.

Pioneering and testing new measures to create an attractive investment environment

Yangpu bonded port is lined with row after row of factories, bonded warehouses, and exhibition centers, reflecting how all kinds of business formats across diverse fields are flourishing here, from grain and oil processing to offshore international trade, testing and maintenance, and intelligent survey technology for product research and development.

The Overall Plan envisions that by 2025, all necessary preparations should be completed for the timely introduction of separate customs controls for the whole of Hainan Island. Yangpu Bonded Port Area has taken the lead in implementing an import-export management system featuring free flow past the "first line" into Hainan Free Trade Port and efficient controls at the "second line," which divides the island and other areas within China's customs territory, and is pioneering related preferential tax policies. As an important vehicle for implementing measures concerning free trade port policies and systems in the initial development stage, Yangpu Bonded Port Area helped boost a year-on-year GDP growth of 34.2% in 2021 for the Yangpu Economic Development Zone. Concrete policy incentives have attracted many enterprises to set up shop in Yangpu. As of July 4, 2022, there were 3,398 registered enterprises in Yangpu Bonded Port Area.

"A grain and oil processing plant with an annual production capacity of more than one million tons like this one would usually take two years to build," said Zhang Hui, chairman of Hainan AUSCA International Oils and Grains. She explained that the company was the first large-scale entity to establish a physical presence in Yangpu Bonded Port Area after the release of the Overall Plan. In just over six months, it built a modern production base for oil and fats processing, which has the largest domestic rapeseed-meal storage silos.

A good business environment is a hallmark of economic development. Yangpu Bonded Port Area has led the way in the innovation of government services, implementing a slew of new policies. These include granting approval for access and operation simultaneously, permitting projects to begin as soon as approval is granted, processing all administrative items through a single window, implementing a "declaration in advance" policy for port customs clearance, and a "two-step customs declaration" process that allows importers to complete the final step after delivery of goods has been taken, as well as a two-stage process where imported goods can first clear customs before approval is acquired for their sale and use in the Chinese market. Such measures are part of Yangpu's drive to become a trendsetter in policy and project implementation for developing a free trade port.

Coordinating development of Yangpu Port and Danzhou City

The strategic decision to promote the integrated development of Danzhou City and Yangpu Port was made with an eye to the overall imperatives of developing a free trade port on Hainan and promoting coordinatedregional development. As their develop-ment accelerated in recent years, Danzhou and Yangpu assumed a more prominent position in Hainan's coordinated regional development framework. At the same time, this exposed their respective shortcomings. Covering an area of only 114.78 square kilometers, Yangpu was hampered by limited space for development, inadequate urban functions, a heavy social burden, and insufficient development of market entities. The adjacent Danzhou had an unbalanced industrial structure, lacked development projects and talent support, and had poor capabilities in scientific and technological innovation.

At the end of 2021, Hainan made the decision to promote the integrated development of Danzhou and Yangpu in a bid to crack the problems hindering the development of both and build a third pole for high-quality development in Hainan. In May 2022, guidelines on supporting the integrated development of Danzhou and Yangpu were issued, along with supplementary measures. The guidelines called for a range of plans and policies concerning the initial development of a free trade port to be trialed throughout the Danzhou-Yangpu region in order to carry out stress testing and accumulate experience on a larger scale.

The Danzhou-Yangpu region boasts port facilities, production capacities, and an urban city. At the beginning of July 2022, several high-quality industrial projects with a total investment of 34.4 billion yuan were launched in the region. Amid the vibrant development atmosphere, a bright future is steadily unfolding for the integrated development of Danzhou and Yangpu.

(Originally appeared in Qiushi Journal, Chinese edition, No. 13-16, 2022)