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Hainan Celebrates 20th Anniversary Special> Hainan Celebrates 20th Anniversary
UPDATED: June-18-2008 NO. 26 JUN. 26, 2008
Preservation and Progress
Hainan has put the future expansion of environmentally friendly industries as its major priority in developing the economy of the province

EFFECTIVE MEDICINE: Hainan Province is well known for its pharmaceutical industry, which is one of the pillar industries of the province (WEI YAO)

Besides tourism, Hainan Province is also known for three other industries: pharmaceutical, car manufacturing, and air transportation.

The pharmaceutical industry of Hainan became well known during the time when China was combating SARS (severe acute respiratory syndrome) in 2003.

Jiang Yingqiong, a communications director of Hainan Province, said during that period, 25 kinds of medicines were manufactured in Hainan that helped save the lives of many people. Many medicine retailers queued in front of pharmaceutical factories to purchase the medicine.

Hainan consists of one main island and several smaller ones, and as such, is surrounded by ocean, with full sunlight, pure water, and abundant in raw materials suitable for producing medicine. It is in a unique position to develop the pharmaceutical industry without polluting the environment. That is why many domestic and foreign pharmaceutical companies are willing to set up factories in the province.

In July 2003, the provincial government proposed to set up a "medicine valley" in the province, attracting pharmaceutical companies to establish factories in a reserved piece of land.

To date, there are 26 domestic and foreign pharmaceutical companies in the "medicine valley" in Haikou, the provincial capital, including several large production bases for some medicines. For instance, Hailing Chemipharm Corp. Ltd., the biggest base for producing azithromycin; Hainan Aike Pharmaceutical Co. Ltd., the biggest producer of raw material for producing antibiotics; and Haikou Kangliyuan Pharmacy Co. Ltd., the largest producer of freeze-dried powder injection.

The auto manufacturing industry started in 1992 when Hainan Mazda Auto Co. Ltd., a joint venture with the Japanese Mazda Motor Corp., was established.

After 10-plus years of development, the Hainan Mazda brand has taken a considerable part of market share in the Chinese auto market. In 2007, the production capacity of the manufacturer reached 150,000 and sold 130,000.

Hainan also has the fourth largest airline in the country--Hainan Airlines Co. Ltd. It is different from the other big three carriers: It is the first shareholding airline and is the first China-foreign joint venture aviation company in the country.

Currently, Hainan Airlines has 70 billion yuan ($10 billion) worth of assets, with an annual turnover of 30 billion yuan ($4.29 billion). It has 155 aircraft, which fly over 500 routes at home and abroad.

Although the province has well-known large enterprises, Hainan is still at an early stage of industrial development compared with other economically developed provinces in the country.

Luo Baoming, Governor of Hainan Province, said Hainan is now committed to developing environmentally friendly industries. Luo stated that investment there must be in accordance with low energy consumption, little pollution, and high in technology content.

"The most important principal in developing industry in Hainan is that it should not pollute the environment, destroy the resources, and we must avoid repeated construction," said Luo.

Luo also noted some other principles in developing industry in the province. For instance, the province refuses to allow outdated production practices (for example, high energy consumption and high carbon emissions); the industries are only allowed to set up factories in the western part of the province.

According to the development plan of the provincial government, the east coast of the province is for developing tourism, while the west coast is for new industries.

Mu Kerui, a policy researcher at the Hainan Provincial Government, said Hainan is forming five industrial circles: chemical engineering, forest-pulp-paper integration, car and spare parts, pharmaceutical, and farm goods processing.

Mu said in terms of its petrochemical industry, Hainan has established a refinery with the capacity to refine 8 million tons of oil and produce 300,000 tons of polyester. At the present time, it is planning to set up an ethene base with a capacity of 1 million tons. In terms of forest-pulp-paper integration, it has created an 80,000-hectare forest for producing paper, and an assembly line for producing 1 million tons of pulp. In the area of processing farm goods, there are over 3,500 processing enterprises across the island with 83,600 employees. The number of farm goods processing enterprises above 5 million yuan ($714,000) of yearly sales revenue is 75, with total output revenue of over 1.9 billion yuan ($271 million).

"By 2012, the value-added produced by the above mentioned five industries will account for no less than 90 percent of all industrial value-added of the whole province," said Mu.

The total industrial output of Hainan Province in 2007 only stood at 36.38 billion yuan, far less than that of the agricultural and service industry, said Mu. When Hainan Province was set up in 1988, the Chinese Academy of Social Sciences proposed to build an industry-led province, which meant the province should be focused on developing industries. But it was turned down eventually. The provincial government at that time adhered to the principle that it would rather slow down the speed of economic growth to protect the only non-polluted clean land in the country, something that has been achieved with precision planning.

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