On December 18, 2025, Hainan Free Trade Port officially launched a full-island lockdown. The Chinese authorities have emphasized it as a “opening to the outside world” measure while also stressing the importance of “the centralized and unified leadership of the Party Central Committee.” Even the pro-Beijing camp has shown concerns and skepticism towards the Hainan Free Trade Port project, as the political control exerted by the Chinese Communist Party has raised eyebrows.
According to Xinhua News Agency on December 18, all eight open ports and ten “secondary ports” on Hainan Island have been put into operation. The island, covering over 30,000 square kilometers, has now officially become a customs-monitored special area, with the slogan of “frontline opening, secondary line control, and internal freedom.”
The Chinese state media has emphasized that the Hainan Free Trade Port is something personally planned, deployed, and promoted by the Chinese leader, Xi Jinping.
Professor Xie Tian from the School of Business at the University of South Carolina pointed out to the Epoch Times that the Hainan Free Trade Port is one of Xi Jinping’s pet projects. Comparing it to the previous Shanghai Free Trade Zone, it is evident that the Chinese government has not been able to provide these areas with real special privileges, including internationalization of the internet.
In the initial stages of the Chinese “reform and opening up” in the 1980s, several economic zones were established. Over the next few decades, at least 22 free trade zones were set up nationwide, with the Shanghai Free Trade Zone established in 2013. Claims of lifting internet restrictions in these zones have been denied. Many of these free trade zones have faced stagnation in development and criticism in recent years.
Due to the necessity of funds from mainland China flowing through Hainan to overseas markets, but with the lack of a conducive legal and political environment for free economic development, early investors have faced setbacks. As China’s economy slows down, the inevitable bursting of the Hainan Free Trade Zone’s bubble is foreseeable.
The Hainan economy witnessed a boom in 1988 when the province was formally established and designated as an economic zone. Funds poured in from various parts of China with hopes that Hainan could become the “Hawaii of the East.” However, in the early 1990s, the real estate bubble in Hainan burst, compounded by financial crises, leading to a downturn in the economy. Although in 2000, Hainan took the initiative with visa-on-arrival policies to attract tourists from Japan, the United States, and Russia, the dream of becoming the “oriental Hawaii” remained unfulfilled.
On April 13, 2018, Xi Jinping announced the establishment of a free trade pilot zone across Hainan Island, aiming to build a so-called “Chinese characteristic free trade port.” Subsequently in 2020 and 2021, authorities issued the “Overall Plan for the Construction of Hainan Free Trade Port” and the “Hainan Free Trade Port Law,” outlining zero tariffs across the island.
The People’s Daily today stated in an article that it aims to transform the Hainan Free Trade Port into a crucial gateway for external opening. However, the same media outlet also emphasized that the work at the free trade port must “adhere to the centralized and unified leadership of the Party Central Committee.”
Former Shenzhen lawyer Zhou Junhong expressed to the Epoch Times that although the Chinese authorities have long promoted reform and opening up, they have failed to address fundamental issues of centralized power and low levels of marketization.
She highlighted that the Chinese government has maintained its political stability by excessive intervention through internet censorship, speech restrictions, and suppression of civil society. This overbearing political control poses a significant obstacle to the desired liberalization of the Hainan Free Trade Port. By sealing off Hainan in the name of “opening up,” the Chinese Communist Party’s facade of governance has been laid bare in this political maneuver between selective openness and closure, exposing the hypocrisy of the CCP rule.
In fact, in June 2020, Hainan Province Secretary Liu Cigui publicly stated that unlike many other free trade ports globally operating under capitalist systems, Hainan Free Trade Port operates under the socialist system of Chinese characteristics and doesn’t allow the disruption of the socialist regime in ideological areas.
The recent official closure of the Hainan Free Trade Port amidst the backdrop of the US-China trade war is seen as a regression by the Chinese government in the view of international society. It is feared that Hainan may not evolve into a true global hub but might end up as an economic isolated island under CCP control.
Criticism towards the Hainan Free Trade Port has been mounting within the pro-Beijing camp as well.
An article in Hong Kong’s Ming Pao on May 5 this year mentioned the preparations for the Hainan Free Trade Port that have been in the works for over six years but coincided with a global trend towards protectionism and the escalation of US-China trade tensions.
Researcher Chen Bo from Hainan University and Liaoning University mentioned to Ming Pao that since the initiation of the Hainan Free Trade Port construction in 2020, it has faced challenges, such as the impact of the COVID-19 pandemic, with actual construction time being less than two years. Currently, the port is still in its early stages and has several shortcomings, including a weak economic base compared to the mainland Chinese economic circle in terms of industrial chains and comprehensive support capabilities.
The article in Ming Pao also noted that as of March this year, Hainan had attracted 851,000 various talents. The region has policies in place to attract high-end talent with full support. However, due to its geographical isolation and a lower income level with a lack of large-scale enterprises, it still fails to attract young talent for employment and development opportunities.
Chow Bing from the Institute of China Studies at the University of Malaya mentioned last October that Hainan resembles China’s border regions, lacking concentrated talent and a robust industrial ecosystem.
At the Boao Forum for Asia this year, the former Vice Minister of Foreign Trade of the Chinese Ministry of Commerce, Long Yongtu, remarked that the current unfavorable international trade environment makes Hainan Free Trade Port somewhat untimely.
In October last year, Dai Lin, Director of the China (Hainan) Reform and Development Institute, mentioned at a forum in Hainan that the challenges faced by the Free Trade Port outweigh the opportunities, with limited attractiveness to American and European capital due to policy restrictions.
Dai Lin further hinted that the national security policies of the CCP have become hurdles in establishing the Free Trade Port. Under the background of the authorities’ emphasis on “coordinated development and security,” the policy implementation of the Hainan Free Trade Port faces increased difficulty. In the CCP’s Third Plenary Session of the 20th Central Committee Decisions, the word “security” appeared 44 times. Under strict regulation, certain policies have lost their appeal.
He mentioned that private equity funds in Hainan may be utilized for high-net-worth individuals to transfer assets offshore, leading to the suspension of related external investment approval policies, among other issues.
The US magazine The Wire cited Alicia García-Herrero, Chief Asia Economist at French investment bank Natixis, expressing that the main problem with Hainan is that the commitments to remove trade barriers have not been met. While many regulations in the free trade zone were supposed to be abolished, such as negative investment lists, investment laws, and industry-wide openness, reality does not reflect this.
There has been a persistent belief that the CCP intends to mold Hainan into “Hong Kong on the South China Sea” following the closure. However, Liu Chang, a visiting professor at the Belt and Road Institute of Hainan University and Executive Chairman of the Hong Kong Entrepreneurs Association, stated in an interview with “Dianxinwen” that Hainan is an inland province of China, subjected to Chinese laws entirely, with the closure serving as a special supervision both domestically and internationally.
An article by Liang Haiming, Director of the Belt and Road Institute at Hainan University published in Hong Kong01, mentioned that Hainan Free Trade Port is not meant to be a replacement for Hong Kong but rather to complement each other for coordinated development.
Xie Tian pointed out that the CCP did indeed have aspirations for Hainan to replace Hong Kong, but the island lacks the freedoms that Hong Kong once enjoyed. Furthermore, given the recent economic downturn in Hainan, the CCP wanting to partner with Hong Kong would only burden the latter.
Since the CCP imposed the National Security Law on Hong Kong in 2020, tarnishing its international image, the economic landscape in Hong Kong has deteriorated significantly. There are even claims that Hong Kong has become a “ruin of an international financial center”.