Hainan Officials Appeal to Beijing for Support as Free Trade Port Faces Strain

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The request came during an open media session of the Hainan provincial delegation on March 8 in Beijing, according to Chinese state-controlled media Southern Metropolis Daily.

This was part of the annual meetings of China’s rubber-stamp National People’s Congress and the top advisory body, the Chinese People’s Political Consultative Conference, known collectively as the “Two Sessions.”

Analysts say the move reveals mounting fiscal strain in the province, noting that it’s relatively uncommon for China’s local governments to directly appeal for funding and policy concessions at such national political events.

Among the proposals were calls for stronger regime support for foreign investment, development of market-access policies for domestic and foreign companies, relaxation of restrictions on foreign investors, and permission for Hainan to issue local government bonds to overseas investors.

Liu also urged Beijing to support the early development of a new airport in the resort city of Sanya. He further called for the launch of a new high-speed rail project connecting the island to the mainland, as well as accelerated investment in offshore wind power and other industrial initiatives.

Some analysts say the unusually direct appeals underscore financial pressure facing Hainan’s free trade port project.

Zeng, a China-based finance scholar, told The Epoch Times that the regime’s local governments rarely present extensive funding requests during the “Two Sessions” unless fiscal difficulties have become difficult to conceal.

“Local officials publicly asking for policy support and funding at such an important political event suggests the financial pressure behind the Hainan free trade port project has already been laid on the table,” he said.

However, Zeng said the project has relied heavily on central regime funding and policy backing since its inception.

“In practice, the project still depends on fiscal and policy ‘transfusions’ from Beijing,” he said.

“Once local finances become tight, provincial authorities have little choice but to seek more resources from the central government.”

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A general view as delegates attend the closing session of China's rubber-stamp legislature, the National People's Congress, at the Great Hall of the People in Beijing on March 11, 2025. Lintao Zhang/Getty Images

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A Hainan-based journalist also questioned whether large infrastructure projects proposed by local officials could realistically move forward.

“Some companies are already struggling to pay wages,” the journalist told The Epoch Times. “When projects require tens of billions or even hundreds of billions of yuan, where will the funding come from?”

Without sufficient corporate tax revenue, the journalist added, local governments may struggle to finance new infrastructure construction.

The journalist said some contractors had already suspended work on projects because funding had not arrived, and migrant workers from rural China who had returned home for the Lunar New Year holiday were reluctant to return.

Hainan implemented a “customs closure” operation for the entire island on Dec. 18, 2025, a key milestone intended to transform the island into a free trade port with special customs supervision.

During the same delegation session, Hainan’s finance chief Cai Qiang acknowledged that the initial phase following the customs closure would be the most difficult.

Cai also appealed for additional central government investment and called on the NDRC to prioritize Hainan in allocating major national projects.

He revealed that the scale of central regime investment earmarked for Hainan in the 2025 national budget was lower than the levels provided in 2023 and 2024.

Some analysts say Hainan’s fiscal pressures were predictable given the structure of the free trade port project.

A China-based economist told The Epoch Times that the initiative has relied heavily on central regime funding from the beginning because the province lacks a strong industrial base and stable tax revenue sources.

“The so-called free trade port looks like a major economic initiative,” he said. “But in reality, it has long depended on financial support [from Beijing] to keep operating.”

As China’s central regime itself faces fiscal constraints, the economist said such support could become more limited.

“With fiscal pressure growing at the national level, the central regime has begun reducing support,” the economist said.

Officials told Chinese state-controlled media Hainan Daily that since the customs closure began, the island’s ports had recorded 653,000 inbound and outbound travelers, a year-on-year increase of 35.1 percent. Visa-free arrivals reached 158,000, up 53.7 percent from a year earlier.

In addition, more than 51,000 new business entities had been registered, including 41,000 new companies—a 43.6 percent increase—while the number of newly established foreign-funded firms and registered foreign-trade companies rose by 30 percent and 74 percent, respectively.

Officials also highlighted planned tax reforms. According to Cai, the proportion of goods eligible for zero tariffs is expected to rise from 21 percent to 74 percent after the customs closure, eventually reaching 90 percent.