If you ask most expats in China what they know about Hainan, their knowledge is probably very limited. Ask someone outside of China and they might very well have difficulty placing the island on a map. But Hainan is so much more than just an island with beautiful beaches and great weather. It is part of an impressive government project to put the island on the international tourism radar—to make it the ‘Hawaii of the China’ and a rival to traditional tourist hotspots in the region like Thailand and Bali.

Famed for generations for its isolation, with a reputation as a place of exiles and years of underdevelopment, it was not until the late 1970s when China flung open its doors to the world that Hainan really started its journey. Thirty years later, with the Chinese economy powering ahead, the government announced its plan to make Hainan an "international tourism destination" by 2020.

Visa rules

In fact, the government has already put in place a number of pilot schemes on the island to help achieve its goal. In 2000, the island introduced a visa-upon-arrival policy for international tourist groups (defined as at least five people) to stay in Hainan for a maximum of 15 days. At present, this scheme is available to tourists from the following countries: Australia, Austria, Canada, Denmark, France, Finland, Germany, Indonesia, Italy, Japan, Kazakhstan, Malaysia, the Netherlands, Norway, the Philippines, Russia, Singapore, South Korea, Spain, Sweden, Switzerland, Thailand, Ukraine, the United Kingdom and the United States.

Money matters

In many ways, Hainan province is able to operate free from the regulations set in Beijing. The province is allowed to acquire investment directly from foreign countries and all Hainan registered companies whose exports amount to $1.5 million per year are able to apply for an Import/Export License.

Business freedoms are not restricted to the Chinese alone. Foreign companies enjoy rights and business opportunities not seen elsewhere on the Mainland, paving the way for international tourism players to set up shop. This will not only enhance the services already provided, but also raise the tourism industry on the island to the next level and help it achieve its 2020 deadline.

The province not only allows foreign companies to set up and separately run their own tourism businesses, but welcomes investment in power, sea transportation, ports, motorways, stores and many others—something that is tightly controlled back on the Mainland. With the government monopoly on tourism alleviated, Hainan is definitely more than just an island; it is an island with its eyes set firmly on putting itself center on the world stage.

Duty-free

To go with its growing international exposure, a duty-free program was initiated in April 2011 to increase sales of luxury goods and to persuade Chinese tourists to holiday at home rather than abroad. Initially, a cap of 5,000 RMB (approximately $804) worth of goods was set for domestic tourists, although this was raised to 8,000 RMB (approximately $1,286) in October 2012 and extended to international visitors. This makes luxury goods purchased in China 10 to 35 percent cheaper—another step in the government’s master plan to make Hainan an international tourist destination.

China, never content to do anything on a small scale, currently has the world’s largest duty free shopping center, the China Duty Free Group-built Sanya Haiting Bay International Shopping Center under construction on the island. Once open at the end of the year, it will cover an area of nearly 70,000 square meters. 23 world famous brands have already signed up to house their goods in this temple of unabashed commercialism, ready to tap into Hainan’s growing market.

International versus domestic

Despite all of Hainan’s grandiose plans, the question still lingers: who is all this really for? The government wants it to be a world-class tourist destination by 2020 and with the business freedoms and relaxed visa rules it would seem that the target audience is the big bad world. However, Hainan is in a great transitional period. The vast majority of tourists are still from the Mainland, lured by the blue skies, tropical weather and simply the island’s ability to provide everything Chinese tourists complain is not provided overseas (services in Chinese, authentic Chinese food to name just a few).

However, with prices rising out of the reach of most ordinary Chinese, Hainan understands it needs to quickly attract foreign visitors. At present, Japanese and Russians make up the vast majority of the island’s international presence, with its proximity to their countries no doubt a pull factor.

Hainan understands that more than just shopping and relaxed business regulations are needed to cater to the international crowd and lure them in. The Ritz Carlton has established itself in Sanya and the Sheraton is now a familiar face in Haikou. Meanwhile, Mission Hills, a branch of the Shenzhen golf club opened in January 2010 to much fanfare. 

Not satisfied with mere real estate, the island is now home to a number of important events. The Boao Forum for Asia, where regional and world leaders meet to discuss issues related to the continent and the greater world, is held annually in Hainan. Even the Miss World beauty pageant has graced Hainan a number of times, adding to the allure and reputation of the island (at least with the male tourists).

Gambling, banned on the Mainland, requires potential gamblers to travel to Macau or fly overseas. However, the recently opened Casino Bar at the Mangrove Tree Resort in Sanya Bay is changing all of that. Currently gambling is permitted, but there are no cash prizes. Instead your winnings are used to buy luxury goods at the hotel or even used to pay for your stay. It might be early days and a far cry from the hedonistic gambling culture of places like Las Vegas but it is a step in a direction not taken by the Chinese government on the Mainland.

The sky’s the limit!

The reality is Hainan has come a long way. The famed Song era poet Su Shi helped put the island on the radar during his second period of exile, but its metamorphosis into an up-and-coming tourist hotspot has been long in the making. China has proven time and time again, its ability to reinvent itself and put on a good show. According to a 2011 China Daily report, the country hosted 2 billion domestic trips in 2010 and hopes to raise this to 3.3 billion by 2015, with Hainan no doubt playing a substantial role. China likes to think big and making Hainan an international tourist destination in the next seven years is no small feat. But if there’s one country that can do it, it’s China.