[Epoch Times, June 28, 2021](Reported by Epoch Times reporters Luo Ya and Liu Yi) The CCP has recently promoted the establishment of a Hainan Free Trade Port and claimed that it would close the island by 2025, but some financial experts have said this He is not optimistic and analyzed the purpose of the CCP’s move.
On June 10, the National People’s Congress of the Communist Party of China passed legislation to promote the island-wide customs operation of the Hainan Free Trade Port in 2025, claiming to surpass the status of Hong Kong and Singapore as free trade ports in 2050. In this regard, the Chinese Communist Party’s official media Xinhua News Agency published a special article on June 23 to tout this.
The article stated that Hainan Island will become a special area under customs supervision, which is different from other areas in the territory. Liu Jiacheng, a professor at the School of Economics of Hainan University, said that when goods enter the Hainan Free Trade Port from other parts of the country, the value-added tax and consumption tax that have been collected will be refunded in accordance with relevant regulations. This can balance the tax burden of goods in other parts of the country and overseas goods. Makoto Port truly embodies the characteristics of’low tax rates’.”
However, Taiwan’s general economist Wu Jialong is not optimistic about this and analyzed the reasons behind the CCP’s construction of the Hainan Free Trade Port.
Wu Jialong believes that the Chinese Communist Party’s move is mainly to attract foreign investment.
The real intention of the CCP is to attract foreign exchange in. If foreign companies and enterprises come here to open companies and do business, they need to bring in money, and foreign companies need to open companies and factories. If foreign investors come in, the money may be a lot of money. The CCP’s foreign exchange reserves are now tight, and when the financial market is opened, people may not come in much; open the trading port to see if it can attract foreign capital.
However, Wu Jialong believes that the Hainan Island Free Trade Port simply cannot be implemented.
First of all, what will happen after the funds enter Hainan Island? How do foreign exchange reserves differ from the foreign exchange reserves of the entire mainland?
Foreign banks, enterprises, and factories have come to invest in Hainan Island and want to bring in funds. Should these funds be placed in Hainan as Hainan’s foreign exchange reserves, or should Beijing be used for unified management? This is a big problem.
Secondly, there is no trust in the CCP in the world.
Because of the CCP’s breach of faith in Hong Kong, the CCP’s past promises are not credible. The CCP has not said how long the independent tariff field on Hainan Island will last and how long the new tariff field will last.
Once foreign capital invests in Hainan Island, many issues will be involved, such as the safety of funds and the safety of personnel. The CCP says it is zero-tariff. Everyone is still unclear about other things. Moreover, how long is the CCP’s promise effective? Does it count? The CCP’s speech has no credibility, which is a big problem.
Besides, is the CCP really open? You only open goods and personnel, so should you open up capital in and out? Does Hainan Island set up another Hainan currency to be exchanged with the US dollar, or is it to use RMB? If the RMB is used, can it be freely exchanged with the US dollar? Is there any degree of freedom in this exchange rate? There is a certain amount of free money in and out. It is not clear to what extent the situation is in this regard. Moreover, it involves the entry and exit of goods, personnel, and capital, and may also include many things such as tourism and transportation.
Wu Jialong believes that the CCP does not really want to establish a free port. If the CCP really wants to do so, Hong Kong will be a free port. If Hong Kong is done well, it will be enough. Moreover, Dongguan and Shenzhen near Hong Kong can be assigned to Hong Kong to the greater Hong Kong. To expand the scope of the Hong Kong Free Trade Port, border customs clearance can be established on the Dongguan side, which is easier and more convenient. Why do you start all over again and do it in Hainan?
Editor in charge: Gao Jing#
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