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Indonesia expects to benefit from Hainan Free Trade Port

The Hainan Free Trade Port is expected to focus on tourism, modern services, high-tech industry and tropical agriculture, and was designed to be a hub for Chinese companies aiming to enter the ASEAN market while also serving as a base for ASEAN companies trying to gain access to the Chinese market. 

Teddy Trilaksono (The Jakarta Post)
Beijing, China
Wed, September 13, 2023

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Indonesia expects to benefit from Hainan Free Trade Port This aerial photo taken on February 13, 2023, shows shipping containers at Haikou Port in China's southern Hainan province. (AFP/STR)

T

he government of the Chinese city of Hainan has introduced the Hainan Free Trade Port, which is projected to become the world’s largest free trade port by 2035.

The Hainan Free Trade Port is expected to focus on tourism, modern services, high-tech industry and tropical agriculture, and was designed to be a hub for Chinese companies aiming to enter the ASEAN market while also serving as a base for ASEAN companies trying to gain access to the Chinese market. 

Indonesia, as art of ASEAN, is expected to benefit from the new trade hub and the Indonesian Embassy in Beijing believes that there could soon be an increase in the flow of Indonesian products to China.

Chargé d'Affaires of the Indonesian Embassy in Beijing Irwansyah Mukhlis said he had high hopes that more products from Indonesia and other ASEAN countries will enter Hainan through the new port.

"In 2022, trade between ASEAN and Hainan reached US$5.88 billion, comprising 19.59 percent of Hainan's total trade, and Indonesia is Hainan's largest trade partner, with total trade between the two reaching $1.58 billion," Irwansyah said.

Data from the embassy shows that ASEAN exports to Hainan reached $2.99 billion, of which $1.01 billion were from Indonesia. Meanwhile, ASEAN imports from Hainan were valued at $2.88 billion, with $570.87 million in imports to Indonesia.

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ASEAN was China's largest trading partner in 2022, with total trade valued at $975 billion, an increase of 15 percent from the previous year. In the first semester of 2023, the total trade volume between ASEAN and China reached $428.96 billion, an increase of 5.4 percent year-on-year (yoy).

"The same applies to investment relations. In 2022, ASEAN remained China's main destination for outbound investment," Irwansyah said.

He also believes that a successful ASEAN chairmanship could contribute to the expansion of trade between the Southeast Asian region and China.

"Indonesia, as ASEAN chair for 2023, will ensure that ASEAN is a region of inclusive, robust and sustainable economic growth, which includes strengthening health architecture, food security and financial stability while ensuring energy security," Irwansyah said.

Separately, secretary general of the ASEAN-China Center (ACC) Shi Zhongjun said that the new port could benefit from its geographical and cultural proximity to Southeast Asian.

"We believe that the Hainan Free Trade Port will make full use of its geographical advantage and play an important role in advancing exchanges and cooperation between ASEAN and China," Shi said.

Shi added that Indonesia's relationship with Hainan province regarding people-to-people projects has shown an upward trend, especially following an agreement to make Bali and Hainan twin provinces.

"Hainan is at the forefront of China's interaction with ASEAN because of the geographical and cultural proximity," he said.

Director General of the Hainan Foreign Affairs Office Dai Zhen said that a cultural affinity between the Southern part of China and some Southeast Asian countries, as is exemplified by Hainanese chicken rice, could indicate a strong bond between the two regions.

“There’s a shared taste of home in the dish. As a symbol of family, joy and harmony, [Hainanese chicken rice] is an essential part of any festival or family ceremony in Hainan. The spread of Hainanese chicken rice throughout ASEAN has created a familial link among us,” Dai said, adding that the world at large could soon benefit from the opening of the Hainan Free Trade Port.

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