Share on facebook
Share on twitter
Share on telegram
Share on whatsapp
Share on linkedin
Share on print
Share on email

Politics Watch: Decoding Xi’s Hainan Free Trade Port Move

◎ Xi consolidating power is a vital prerequisite for the economic liberalization to happen.


On April 13, the Chinese Communist Party (CCP) and the State Council announced that a free trade zone would be built in Hainan by 2020, and a free trade port by 2025. Multinationals are encouraged to establish their regional and international headquarters there, according to the announcement document.

The backdrop:
Last November, new Politburo Standing Committee member and then vice premier Wang Yang wrote about “comprehensively opening up” China in a People’s Daily article. In the article, he brought up the creation of free trade zones and ports with greater autonomy from the central authorities. Wang listed Hong Kong, Singapore, Rotterdam, and Dubai as model examples of free trade ports

On April 12, President Donald Trump said in a meeting with Republican governors and lawmakers that the trade conflict may never transpire if Beijing is willing to further open up China’s markets to American goods. “Now we’re really negotiating and I think they’re going to treat us really fairly. I think they want to,” Trump said.

Our take:
1. Xi Jinping had announced plans to open up China’s economy further and establish autonomous free trade zones during the Third Plenum of the 18th Central Committee in 2013. The Xi administration, however, was unable to follow through on many of the economic reform plans made at the Third Plenum because the Jiang Zemin faction and other CCP interest groups offered stiff resistance. So Xi spent most of his first term in office eliminating rivals and consolidating power more fully.

2. Xi highly centralized authority at the 19th Party Congress and the 2018 Two Sessions. Shortly after, Trump announced the levying of $150 billion worth of tariffs on Chinese imports and requested that Xi open up the markets.

3. We believe that Trump’s “trade war” is really aimed at pushing China to open up further, and Xi consolidating power is a vital prerequisite for the economic liberalization to happen. Without strong external pressure from the U.S., Xi would find it very difficult to carry out economic reform in the face of internal opposition from various CCP interest groups. With the Chinese regime being unable to withstand a trade war given severe internal issues, the CCP interest groups would likely accept the reality of the situation and go along with Xi’s opening up measures.

"I’m a very happy, satisfied subscriber to your service and all the deep information it provides to increase our understanding. SinoInsider is profoundly helping to alter the public landscape when it comes to the PRC."
James Newman, Former U.S. Navy cryptologist
“Prof. Ming’s information about the Sino-U.S. trade war is invaluable for us in Taiwan’s technology industry. Our company basically acted on Prof. Ming’s predictions and enlarged our scale and enriched our product lines. That allowed us to deal capably with larger orders from China in 2019. ”
Mr. Chiu, Realtek R&D Center
“I am following China’s growing involvement in the Middle East, seeking to gain a better understanding of China itself and the impact of domestic constraints on its foreign policy. I have found SinoInsider quite helpful in expanding my knowledge and enriching my understanding of the issues at stake.”
Ehud Yaari, Lafer International Fellow, The Washington Institute
“SinoInsider’s research on the CCP examines every detail in great depth and is a very valuable reference. Foreign researchers will find SinoInsider’s research helpful in understanding what is really going on with the CCP and China. ”
Baterdene, Researcher, The National Institute for Security Studies (Mongolian)
“The forecasts of Prof. Chu-cheng Ming and the SinoInsider team are an invaluable resource in guiding our news reporting direction and anticipating the next moves of the Chinese and Hong Kong governments.”
Chan Miu-ling, Radio Television Hong Kong China Team Deputy Leader
“SinoInsider always publishes interesting and provocative work on Chinese elite politics. It is very worthwhile to follow the work of SinoInsider to get their take on factional struggles in particular.”
Lee Jones, Reader in International Politics, Queen Mary University of London
“[SinoInsider has] been very useful in my class on American foreign policy because it contradicts the widely accepted argument that the U.S. should work cooperatively with China. And the whole point of the course is to expose students to conflicting approaches to contemporary major problems.”
Roy Licklider, Adjunct Professor of Political Science, Columbia University
“As a China-based journalist, SinoInsider is to me a very reliable source of information to understand deeply how the CCP works and learn more about the factional struggle and challenges that Xi Jinping may face. ”
Sebastien Ricci, AFP correspondent for China & Mongolia
“SinoInsider offers an interesting perspective on the Sino-U.S. trade war and North Korea. Their predictions are often accurate, which is definitely very helpful.”
Sebastien Ricci, AFP correspondent for China & Mongolia
“I have found SinoInsider to provide much greater depth and breadth of coverage with regard to developments in China. The subtlety of the descriptions of China's policy/political processes is absent from traditional media channels.”
John Lipsky, Peter G. Peterson Distinguished Scholar, Kissinger Center for Global Affairs
“My teaching at Cambridge and policy analysis for the UK audience have been informed by insights from your analyzes. ”
Dr Kun-Chin Lin, University Lecturer in Politics,
Deputy Director of the Centre for Geopolitics, Cambridge University
" SinoInsider's in-depth and nuanced analysis of Party dynamics is an excellent template to train future Sinologists with a clear understanding that what happens in the Party matters."
Stephen Nagy, Senior Associate Professor, International Christian University
“ I find Sinoinsider particularly helpful in instructing students about the complexities of Chinese politics and what elite competition means for the future of the US-China relationship.”
Howard Sanborn, Professor, Virginia Military Institute
“SinoInsider has been one of my most useful (and enjoyable) resources”
James Newman, Former U.S. Navy cryptologist
“Professor Ming and his team’s analyses of current affairs are very far-sighted and directionally accurate. In the present media environment where it is harder to distinguish between real and fake information, SinoInsider’s professional perspectives are much needed to make sense of a perilous and unpredictable world. ”
Liu Cheng-chuan, Professor Emeritus, National Chiayi University
Previous
Next