Recently, Chinese Communist Party leader Xi Jinping inspected Hainan Province, urging local officials to advance the construction of a Free Trade Port. Legal expert Yuan Hongbing, currently living in Australia, revealed that behind the promotion of the Hainan Free Trade Port construction by the Chinese Communist Party lies a strategic conspiracy. On one hand, it aims to utilize foreign investment while ensuring the security of its regime, and on the other hand, it is preparing to use foreign companies as hostages in the event of a war in the Taiwan Strait or the South China Sea.
Xi Jinping, on December 17, in Sanya City, Hainan Province, urged local officials to accelerate the implementation of core policies for the Hainan Free Trade Port. According to Xinhua News Agency, Xi demanded Hainan province officials to plan the work before and after the port closure to ensure smooth and orderly operations.
The Hainan Free Trade Port was initiated by Xi Jinping himself. On April 13, 2018, Xi Jinping announced the establishment of a free trade zone on the entire island of Hainan, building the so-called “China Special Free Trade Port.” Subsequently, in 2020 and 2021, the authorities respectively issued the “Overall Plan for the Construction of Hainan Free Trade Port” and the “Hainan Free Trade Port Law,” planning for zero tariffs across the island.
According to the plan, the Hainan Free Trade Port is expected to complete pre-closure preparations by the end of this month and achieve operational closure by the end of 2025.
In an interview published by “Watching China” on December 23, Yuan Hongbing stated that promoting the construction of the Hainan Free Trade Port by the Chinese Communist Party involves a strategic conspiracy.
Yuan Hongbing mentioned that Xi Jinping holds an extreme attitude of distrust towards foreign companies, viewing them as important bases for foreign “hostile forces infiltrating China.” Therefore, the Chinese Communist Party has actually implemented a policy of repression towards foreign companies similar to how they treat private enterprises. For example, Communist Party organizations are established in all foreign companies, subjecting them to internal monitoring. Meanwhile, under the leadership of Minister Chen Yixin, the State Security Department of the Chinese Communist Party has significantly expanded its power and imposed a series of laws, such as the “Anti-Espionage Law,” placing some senior executives of foreign companies in dangerous situations as “pawns of the Party.”
He stated that this has triggered a trend of numerous foreign companies and investments withdrawing from China, severely impacting the Chinese economy. Therefore, Xi Jinping’s intention to attract foreign investment to the island of Hainan is to create a “special zone” to attract foreign companies while also being separated from mainland China, ensuring the so-called “national security” of the Chinese Communist Party.
Yuan Hongbing expressed that this is just Xi Jinping’s superficial idea. His deeper intention is to prepare for a war in the Taiwan Strait and the South China Sea.
He analyzed that Hainan Island serves as a strategic nuclear submarine base of the Chinese Communist Party and also the base of the South China Fleet. Currently, Hainan Island has preset dozens of missile launch sites. In the event of a war, a large number of missile troops can quickly enter Hainan and engage in combat. Consequently, Hainan Island has become one of the most important military bases for the Chinese Communist Party to launch wars in the Taiwan Strait and the South China Sea in the future.
Yuan Hongbing believes that Xi Jinping’s attraction of foreign capital to Hainan Island is to use these foreign investments as hostages. When the war breaks out, it will deter the United States and other countries from targeting Hainan Island, ensuring the security of the military base in Hainan.
In October of this year, the Chinese Communist Party held the “Hainan Free Trade Port Legal Week” to attract foreign investment. According to official Chinese media reports, participants included legal professionals from various provinces in mainland China as well as from Hong Kong, Malaysia, Singapore, and other overseas regions.
However, during this legal forum on the Hainan Free Trade Port, advisor to the Hainan Provincial Government and director of the China Reform and Development Research Institute, Chi Fulin, stated that the challenges of the Hainan Free Trade Port outweigh the opportunities.
Chi Fulin pointed out that the policy of the Hainan Free Trade Port has limited appeal to American and European capital. In 2022, only the UK invested $350 million in Hainan, and the United States invested a measly $53,000. From 2018 to 2022, actual foreign utilization in Hainan has shown an increasing trend, but in 2023, there was a 12.1% year-on-year decrease.
Chi Fulin also rarelượ�y suggested that the Chinese Communist Party’s national security policy has become an obstacle to creating the Free Trade Port. He mentioned that under the authorities’ so-called “coordinated development and security,” the difficulty of implementing the Hainan Free Trade Port policy has increased. The term “security” appears 44 times in the Decision of the Third Plenary Session of the Twentieth Central Committee of the Chinese Communist Party. Under strict supervision, the attractiveness of some policies has declined.
For example, due to the possibility that private equity funds in Hainan may be used by high-net-worth individuals to transfer assets overseas, related policies for outbound investment have been temporarily suspended, and so on.