In April 1988, Hainan, China's southernmost and second largest island became the country's newest province and was simultaneously declared a special economic zone (SEZ). Twenty years on, Hainan's governor Luo Baoming spoke to China.org.cn about the island's development and future prospects.

"Hainan has traveled a remarkable road. We have made great social and economic progress. People's lives have improved immensely," said Luo. "I am very confident about the future; we are opening up more and more to the outside world, and our standard of living is going up."

The governor summarized the success of the past two decades: Economic output up eightfold; fiscal revenue up 50 times; disposable income in urban areas up 11 times and rural per capita net income up sevenfold; urban bank deposits 39 times their 1988 level. These achievements have laid a solid foundation for future development, said Luo.

Hainan is now a major communications hub with 460 air routes to the mainland and the rest of the world. There are 31 ports with a capacity of over 10,000 tons, up from 3 twenty years ago.

With convenient communications, beautiful landscapes, and a healthy environment, the province has become a top tourist destination. Eighteen million tourists visit every year, 750,000 of them from overseas. Many have bought property on the island; second homes account for about 60 percent of commercial house sales in Haikou and 80 percent in Sanya.

Showcase events like the Boao Forum For Asia and the Miss World Contest have put Hainan in the international spotlight and Hainan is increasingly viewed overseas as a place to do business as well as relax.

As a SEZ, Hainan was an economic and political pioneer. The province was the first in China to introduce the concept of a socialist market economy and run the economy on market lines. It created a human resources system, promoted the service sector and reformed fuel surcharges, all unprecedented in China. It pioneered governmental reform by streamlining bureaucracy. When the provincial government was established, it immediately slashed 20 departments and 200 jobs. It continues to battle red tape. Planning and approval procedures are being simplified in another move emphasizing government's role as a service provider.

Governor Luo said Hainan is pinning much of its hope for future growth on its Yangpu Economic Development Zone. The government plans to develop Yangpu into a major shipping and logistics hub for Southeast Asia.

The governor revealed that, in another first for China, central government plans to devolve control of land reclamation and cultivation policy to the Hainan authorities. The province will introduce major reforms to encourage agro-business.

The province is determined to improve its citizens' quality of life. A new medicare system will provide health care to all, with the island's 670,000 farmers getting equal treatment with city dwellers. The province also plans major reforms to improve housing provision.

Hainan's tourist industry will be boosted by central government visa relaxations that allow citizens of more countries to make visa-free trips to the island. The province will also be allowed to build more tax-free stores.

Governor Luo vowed to protect the province's environment. A clean environment is not just a pre-condition of development but one of development's main aims, he said.

(China.org.cn by Pang Li, March 31, 2008)