PRESIDENT Xi Jinping on Friday announced a decision to develop the island of Hainan into a pilot free trade zone.

“Here I solemnly announce that the Communist Party of China Central Committee has decided to support Hainan in developing the whole island into a pilot free trade zone, and gradually exploring and steadily promoting the establishment of a free trade port with Chinese characteristics,” Xi said.

A free trade port is the world’s most open form of economic zone, which has brought prosperity to places like Singapore and Hong Kong thanks to its broad-based preferential policies on trade and investment.

Policies and institutional systems for building a free trade port in Hainan will be established “step by step and stage by stage,” Xi said at a gathering celebrating the 30th anniversary of the founding of Hainan Province and the Hainan Special Economic Zone.

Hainan will be China’s largest free trade zone enjoying higher-level opening-up policies. It will also be the country’s first free trade port since the founding of New China.

Calling the decision a major move, Xi said it highlighted the country’s resolution of further opening up and promoting economic globalization.

China is aiming to achieve “important progress” in building Hainan into a pilot free trade zone by 2020 and “basically establish” a free trade port system in Hainan by 2025,  according to a document unveiled Saturday by the Central Committee of the Communist Party of China and the State Council.

Multinational companies are encouraged to set up international and regional headquarters in Hainan and China will support the “all-round participation” of foreign firms, the document said.

In developing the island into a pilot free trade zone, Hainan will be granted more autonomy to reform, and speed up the fostering of a law-based, international and convenient business environment as well as a fair, open, unified and efficient market environment.

The pilot free trade zone will implement high-level trade and investment liberalization and facilitation policies, and overseas businesses there will receive pre-establishment national treatment with a negative list management system, Xi said.

Focusing on sectors including seeds, medical care, education, sport, telecommunication and finance, the pilot free trade zone will push forward opening up of modern agriculture, high-tech industries and modern services, boost the development of service trade, protect the interests of overseas investors and promote the gradual opening up of the shipping industry.

The president noted that Hainan should focus on the development of tourism, modern services and high-tech sectors, instead of intermediary trade and manufacturing. Hainan should also enhance cooperation with countries and regions along the Belt and Road.

The 35,400-sqkm province administers two-thirds of China’s sea areas and is an important link on the 21st Century Maritime Silk Road.

Hainan is China’s largest special economic zone. The southern-most island province also won the Central Government’s approval to develop itself into an international tourism island in 2010.(Xinhua)