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Opinion
Is Hainan the next Hong Kong? That’s the wrong question to ask
If it leverages its special status to enhance Hainan’s experiment, Hong Kong would not be boosting a rival but securing its own indispensable role
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Dr Devin Lin is a program director at HKU SPACE and a practicing lawyer in China and California, specialising in property and construction law.
On December 18, China made a bold move on the global economic chessboard. It launched a massive free-trade experiment by turning the entire island province of Hainan – an area, comparable in size to Belgium, whose gross domestic product was US$113 billion last year – into a duty-free customs zone. A new narrative has now taken hold: with its free-trade port status, Hainan is on track to rival or even supplant Hong Kong.
Having followed this development closely, I believe this comparison is fundamentally flawed because it ignores a critical structural difference. Hong Kong is a special administrative region operating under “one country, two systems” and Hainan is not. This is not a minor legal detail; it is the core reason Hainan should be viewed not as a competitor but Hong Kong’s most promising partner on the mainland.
This distinction changes everything. Hong Kong’s status as a special administrative region grants it a unique constitutional position, with its own legal system based on common law, a fully convertible currency and independent membership in international organisations such as the World Trade Organization. Its success is built on this framework, which offers global businesses a trusted, rules-based gateway to China.
Hainan operates on a completely different model. It is a province of China undergoing an unprecedented economic experiment within the national system. Its free-trade port status is a policy innovation, not a constitutional one. Its zero-tariff focus is on raw materials and production equipment, designed to build a high-end manufacturing and logistics base, particularly for trade with Southeast Asia.
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