When celebrating the 30th anniversary of establishing Hainan special economic zone on April 13, 2018, President Xi Jinping called for turning the province to a world-class tourism destination and realizing a high-quality, sustainable growth. In December the implementation plan has been officially released, outlining the specific targets and measures for upgrading the island province to an internationalized center for tourists and consumers.

Currently, the major challenge facing the transformation of Hainan into a center of international tourism is the rising domestic demand for tourism and related services, and a serious shortage of internationalized products and services.

In the third quarter of 2018, according to the tourism department of Hainan, per capita daily spending of overnight visitors in the island was 814.85 yuan ($118.95). Of that figure, the spending for basic items such as transportation, accommodation and catering accounted for 70 percent, while shopping, entertainment, tailor-made services and rental services only accounted for 22 percent. It reflects the fact that there are few alternative tourism products in Hainan to meet consumers’ demand.

Therefore, the acceleration of building a center of international tourism should focus on innovating institutional mechanisms, optimizing the developmental environment and widening the field of tourism consumption.

It should also actively explore new ways to develop the consumption-driven economy, and create an international tourism consumption resort boasting a wealth of businesses, brand zone clusters, comfortable and clean environments and unique features.

Against the backdrop of domestic consumption upgrade, people now like high-end tourism more featuring holiday resorts, healthcare, culture and sports.

The implementation plan issued in December has listed a number of major tasks in building this international hub of tourism and consumption. These include expanding the space for tourism consumption development, innovating the mode of tourism consumption, improving the quality of tourism services, creating a tourist-friendly environment, etc.

Given this, Hainan should leave room for tourism consumption and foster new highlights in this field. And Hainan is capable of creating multiple such opportunities for consumption.

First, the province should accelerate moves to adjust its duty-free shopping policy to meet the needs of tourists. Thanks to the tax exemption policy implemented in the past seven years, total sales volume has reached 37.59 billion yuan in the region, and that figure can still go higher.

The newly-released plan offers Hainan a more favorable tax-free shopping policy. For example, the annual tax-free shopping quota will be raised to 30,000 yuan ($4387), without restrictions on the number of purchases for offshore travelers. The new policy will play an important role in addressing the tourism shopping demands of middle- and high-end income groups, and be conducive to expanding domestic consumption and attracting overseas consumption.

Second, healthcare is an important part of people’s growing needs for a better life. With the consumption upgrade, the rise in the aging population and the fast pace of urbanization, Hainan should further focus on the establishment of an inclusive health industry, turning healthcare and medical tourism into a trump card on the island. This could serve as a mode for the development of the health service industry and the expansion of healthcare tourism across the nation.

For instance, the implementation plan regulates that in the Hainan Boao Lecheng International Medical Tourism Pilot Zone, a list of medicines (vaccines excluded) for clinical use can be imported upon the approval of the Hainan provincial government. Also, some medical equipment and instruments will be included on the duty-free product list, such as hearing aids, visual training machines and household respiratory support equipment.

Third, Hainan should also pay more attention to tourism from cruises, and prioritize it as a pioneer industry in the Pan-South China Sea tourism and economic cooperation circle. The implementation plan also proposes the expansion of cruise tourism and the development of yacht tourism. This would not only greatly enrich the products line of Hainan, but also promote the leading role Hainan plays in the sector.

To this end, Hainan should strive to build the Sanya cruise port, encourage cross-border cruise tourism and cooperate with world-renowned cruise companies to integrate Hainan into global routes, and to create a tourism exchange platform on the 21st-Century Maritime Silk Road.

Thanks to unique geography, abundant tourism resources and healthy ecological environment, Hainan boasts favorable conditions for the establishment of an international tourism and consumption center. In 2017, Hainan's total tourism revenue was 81.2 billion yuan ($11.87 billion), only accounting for 11.7 percent of the same figure in Yunnan, 11.4 percent in Guizhou, and 6.8 percent in Guangdong. It's clear that Hainan’s tourism potential is far from being unlocked.

Transforming its resource advantages into a competitive edge is the most important task in transforming the island into an international tourism and consumption center. It is also the primary problem to be solved in Hainan’s journey to building the best possible free-trade pilot zone.

The implementation plan also proposes the building of a "tourism mechanism innovation pilot zone" on the island. The key to achieving the task lies in reforming administrative divisions and administrative systems in accordance with the idea of "one city, one island", cutting through all of the red tape, and unifying land use, infrastructure, industrial layout, environmental protection, urban and rural development policies. In this way, Hainan can create a mode to achieve a comprehensive tourism plan that benefits the entire island.

The author is president of the China Institute for Reform and Development. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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