Rating	C
Year of Establishment	1992
Land Area	1.93 km²
Location	Haikou, Hainan
GDP	RMB 15.2 billion, 44.4% up
FDI	US$143.77 million, 13.49% up
Utilized FDI	N.A
Major Investors	Haima Auto, Mingfang Machinery, Yangshengtang Pharmaceuticals, Zhonghe Pharmaceuticals, Bright Future Pharmaceuticals
Major Industies Encouraged	automobiles, information technology, bio-pharmaceuticals

Source: Administrative Committee of Haikou Free Trade Zone

Introduction

Located south of downtown Haikou, Haikou Free Trade Zone (Haikou FTZ) is a state-level free trade zone set up by the State Council in 1992.

Haikou FTZ is located 3 km from Haikou Port, which is Hainan's busiest port, 18 km from Haikou Meilan International Airport and 10 km from the railway. Nanhai Road passes close to Haikou FTZ, connecting it with major highways in Hainan.

Haikou Port is a major port in the southern coastal area of China. It offers 23 international sea routes. Ships setting sail from this port can reach South Korea, Japan, Malaysia, Singapore, Thailand, Indonesia, Kuwait, Saudi Arabia and Australia.

Investment Climate

In 2011, the gross industrial output from Haikou FTZ increased 14.71% to RMB 15.56 billion. Haikou FTZ’s pillar industries are biopharmaceuticals, information technology and automobiles. In 2010, the gross industrial output from biopharmaceuticals rose 49.53% year on year and reached RMB 3.85 billion, accounting for 25.31% of the zone’s total.

Yangshengtang Pharmaceuticals, Zhonghe Pharmaceuticals and Bright Future Pharmaceuticals are major investors in this sector. The automobile industry in Haikou FTZ is rather strong. Haima Auto, the largest enterprise in Haikou FTZ, achieved a gross industrial output of RMB 8.17 billion in 2010, more than one-half of the zone’s total gross industrial output. Haima Auto was set up by China’s second-largest auto manufacturer, First Auto Works, in 1988 when Hainan was established as a province. It has two vehicle assembly factories that have a combined output capacity of 150,000 cars per year. A third factory is under construction and will increase Haima’s total annual production capacity to 400,000.

In 2011, the foreign trade value of Haikou FTZ increased by 13.49% year on year to US$143.77 million, accounting for 2.27% of the city’s total.

Investment Cost

Winning Edge and Limitation

Winning Edge

Located on the southern island of China, Haikou boasts easy access to marine transportation
The success of Haima has boosted the development of the auto parts industry in Haikou FTZ
Haikou has good environmental conditions. It has relatively little air and water pollution

Limitations

Although it is a free trade zone, the development of the zone’s logistics industry is slower than that of the other FTZs in coastal areas
Despite being a free trade zone, the zone’s foreign trade value accounts for only 6.3% of the city’s total
The city has a hurricane season

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