Off of China’s southern coast lies Hainan, the country’s smallest and southernmost province. It’s long been a popular tourist destination for both Chinese and international vacationers—but the South China Sea island may soon become a destination for a different demographic: tech startups.
China’s President, Xi Jinping, wants “China’s Hawaii” to become a leading spot for international tech innovation. And to do so, he enacted a series of measures in 2018 that will liberalize some of China’s most vital sectors, including expanding its imports. Xi predicts that these policies will increase China’s imports of goods and services by over $40 trillion over the next 15 years—but to reach that goal, China must first begin attracting international entrepreneurs.
Attracting Global Entrepreneurs: Why Hainan?
For the last six years or so, President Xi, his government, and Chinese media have touted the “Chinese Dream,” an ethos similar to the popularized “American Dream” that’s been rooted in western (and, to a lesser degree, global) vernacular for nearly a century. National rejuvenation is central to Xi’s Dream; he sees these measures as key steps towards realizing that vision, with Hainan as a cornerstone in China’s growing presence in the disputed South China Sea territories.
Xi’s decision to name Hainan as China’s tech innovation hub was made strategically, as part of its ever-expanding One Belt, One Road Initiative (OBOR). In summer 2018, he announced that Boao, a town in Hainan, would be in the running for China’s first free trade port. And, a few months later, its status as an international free trade zone was solidified. Not only that, but nationals from nearly 60 countries will be allowed in, visa-free. Xi believes that its status and ease of entry will entice enough foreign startups and businesses to bring in much-needed income to the island; while Hainan may be a tropical paradise to many, it’s also one of the poorest provinces in China.
Disruption in Paradise
Hainan’s economy isn’t very diverse; it produces roughly half of China’s rubber goods, with agriculture and tourism making up a significant portion of its economy as well. With westerners and a growing number of Asian nationals living the “digital nomad” lifestyle, Xi hopes to capitalize on location-independent workers, too: they can work wherever WiFI is available. Part of the plan assumes that Hainan’s tropical climate will be a draw for these digital nomads.
But digital drifters aren’t the only ones eyeing Hainan. The Hainan Resort Software Community’s (RSC) Blockchain research institute recently partnered with University College Oxford Blockchain Research Center to pilot China’s first official Blockchain zone. Further, RSC will launch an institutional innovation center in collaboration with Renmin University, aiming to attract top Blockchain talent from around the globe, and will explore numerous Blockchain application.
This digital disruption will begin the shift to an island that aims to be a foremost innovation hub, competing with the Silicon Valleys and Old Street Roundabouts of the world—but set in and around an idyllic, picture-perfect, politically disputed location.
Eying Hainan? Make the Move with an Experienced Partner
There will be no shortage of tech innovation to come out of Hainan—the only question is how long it will take for it to tilt towards a tech-centric island of digital innovation. For tech companies that are looking to plant roots in a business-friendly (and, perhaps tropical) environment, Hainan may be the best location for your goals. Whether it’s Hainan or a city in one of the other 186 countries in which Velocity Global has a presence, our International PEO (Professional Employer Organization) solution can have you up and running in as few as 48 hours—no entity required. Ready to establish your presence on the island before the rest? Let’s make it happen.