China is looking to establish Hainan, a lush tropical island in the South China Sea, as China's first "Free Trade Port" (FTP) to deepen its position as an economic lynchpin for the region. The FTP blueprint aims to establish the 35,000 sq km island as China's most open economic region by 2025, with the ultimate goal of building a tropical Dubai in the middle of the South China Sea by 2035. Hainan will essentially establish itself as a separate administrative trading entity within China, with the "free flow through the first line, control at the second line" model at its heart. The plan proposes "five frees" referring to free trade, investment, cross-border capital flows, transportation, and exit and entry, with the broader idea of attracting foreign enterprises, particularly from Southeast Asia, to use Hainan as a base for trade, offering incentives such as zero tariffs and the lowest tax rate in China.
