Small Hainan takes on huge strategic role

Developments in the island province of Hainan get more interesting every year. It’s sometimes observed that it has not caught up with economic growth in southern China, especially the Greater Bay Area, despite its strategic position in the north of the South China Sea.

But it may become the most important strategic province to the nation – because it is home to the most advanced naval hardware being built; it is key to defending China’s claims over maritime territories contested by at least four other countries and Taiwan.

In this context, it’s even more intriguing that the 35,000 sq km island at the southernmost tip of the country is being turned into the world’s largest free-trade port with low taxes and more relaxed regulations to match, under a plan pushed by President Xi Jinping himself.

As a free port and a naval hub, Hainan will likely become a main marker of Xi’s rule and its legacy, much like Shenzhen was for Deng Xiaoping. The Yulin Naval Base has been rapidly expanded in just the past two years. It can now reportedly berth up to 16 submarines, both conventional and nuclear, and host two aircraft carriers.

Its proximity to the Paracel and Spratly archipelagos makes it the ideal jump-off point for naval operations. As well, with the submarines, it can coordinate underwater detection and surveillance with advanced remote sensors.

To an extent, Australia’s drive to build its own nuclear submarines under the Aukus security pact with Britain and the United States may be seen as a counterpose to the ever-expanding naval capabilities of the Yulin base.

Meanwhile, Beijing wants to lure both foreign and domestic investors, businesses and tourists to Hainan with low taxes, a more relaxed regulatory regime, and separate customs and border control, much like Hong Kong. That will serve as part of the so-called dual circulation strategy to promote domestic consumption and to diversify from external or foreign trade and investment for economic growth.

With its economic and military capabilities, perhaps it will become like Singapore. Suppose it all works out, it will be a welcome magnet for foreigners and expatriates. It may be mere speculation for now, but what will their presence mean for the island province as a strategic target for rival countries?

In China’s search for new sources of economic growth, naval expansion and modernisation, and strategic dominance in the South China Sea, Hainan is now the key.

Source: https://www.scmp.com/comment/opinion/article/3176206/small-hainan-takes-huge-strategic-role