Hainan still lacks Hong Kong’s light. It lacks the restaurant options of Hong Kong, Tokyo, Paris and New York. Some of the most popular luxury brands are missing. Kering, a Paris-based luxury fashion house, has opened Gucci Sunglasses and Gucci Fragrances in the Sanya, Hainan coastal city, but not upscale Ulysse Nardin and Girard-Perregaux watches. Kering declined to comment.
“You can imagine what the shopping atmosphere was like there,” said Rachel Qian, a 33-year-old Shanghai resident who regularly went shopping in Tokyo before the pandemic. She is giving Hainan a card to avoid rubbing against people who will buy high-end brands just to sell them elsewhere in China.
“People don’t go there to shop but to make money,” she said.
In terms of skills, too, officials are trying to fix Hainan’s shortcomings. The central government has sent experienced officials to the province, who have overseen successful development programs. Hainan Governor Shen Xiaoming previously ran the Shanghai free trade zone and helped persuade Tesla to set up its first overseas car assembly plant there.
In order to attract skilled workers, the Hainan government acquired private preschools across the island last spring and made them public, with admission incentives for children of all levels. Well-educated parents moved there.
Yu Lei, a telecommunications engineer who moved there from Chongqing City and just enrolled his 3-year-old daughter in a new public preschool predicts: “There will be more and more senior talent in future.
To lure rich companies and people, Hainan officials reduced taxes. They cut their personal and corporate taxes by about 15%. In mainland China, high-income individuals are subject to a high income tax of 45%, while a series of corporations pay 25%.
Some wealthy individuals rushed to set up individual companies on the island to move part of their salaries there and save taxes, people who work with them say. Similarly, Chinese companies are exploring the establishment of subsidiaries there.