On April 13, 1988, with the approval of the 7th National People's Congress, Hainan Island, formerly an administrative region of Guangdong Province, became a province and was proclaimed the fifth and largest special economic zone in China.

The move was publicly hailed as another major step by the Chinese government towards opening to the outside world. It is also an important part of the strategy for developing an export-oriented economy in China's coastal areas. The Preparatory Group for the Establishment of Hainan Province has been formed to take care of the work involved in the development of the new province.

Location and Resources

Situated between the South China Sea and the Beibu Gulf, Hainan Island faces Leizhou Peninsula across the Qiongzhou Strait. With an average annual temperature of between 22oC and 26oC and rainfall of about 2,000 mm, Hainan is a lush tropical island. China's second largest island (next only to Taiwan with an area of 36,000 square km), it covers an area of 34,000 square km. Hainan also administers other islands in the South China Sea.

By sea, Hainan is convenient to Hong Kong, Taiwan and Japan. Its 1,500-km coastline is dotted with over 60 well-equipped harbours. It could very well become an important shipping centre for the Asian-Pacific region.

Minerals

Hainan is richly endowed with minerals. Iron ore mines in Shilou boast verified reserves of about 260 million tons. The ore mined here has an average iron content of 51 percent, and can be up to as high as a 70 percent iron content. Shilou is one of the eight largest mines in Asia. Shilou also produces high-grade cobalt and copper.

An iron and steel complex will be built in Shilou with an expected capacity of 1 million tons a year. The production target for the first stage of the project is 35,000 tons of steel.

Hainan is also rich in titanium which is very much in demand in modern industry. Verified deposits of 1 billion tons of titanium ore are concentrated in the east coastal areas.

Some foreign oil companies have long coveted the oil and natural gas reserves in the north of Hainan Island and the Beibu Gulf and Yingge Sea. Since 1980 China has invited oil companies from France, the United States and Australia to work in the area. Thus far, they have found some oil-bearing layers and sunk one well which gushes out 1.8 million cubic metres of natural gas a day.

Hainan is rich in about 30 different kinds of minerals including brown coal, oil shale, aluminium, manganese, lead, zirconium, gold, uranium, crystal, precious stones, quartz, limestone and refractory clay. Most of these reserves are still totally unexploited.

Tropical Plants

Hainan produces upwards of 130,000 tons of rubber a year, about half China's total output. Rubber trees are to be seen everywhere on the island.

Pepper and coffee are also rich sources of income for Hainan farmers. The island now has 10,000 hectares of pepper plants, an output in the forefront of the nation. At present, only one eighth of the 20,000 hectares of land suitable for coffee growing has been exploited, but foreign investors have expressed a willingness to invest in coffee plantations on Hainan.

Hainan is considering plans to process up to 60 million coconuts each year. The Haikou Canned Food Factory exports coconut jam and the newly developed salted coconut chips and coconut milk.

Hainan's economic crops also include sugar-cane, tea, oil, cashews and sisal hemp. The cultivation of these crops takes up an area of 400,000 hectares. Pineapples, lychees, mangoes, bananas, Chinese flowering quinces, lemons, breadfruit and oranges have become the island's major export items.

Hainan also has four primitive forests with some 1,100 different species of trees, 20 of which have a great deal of economic potential.

Marine Products

Hainan has 24 fishing ports and fishing grounds which cover 100,000 square nautical miles. Major marine products include groupers, Spanish mackerel, silver pomfrey, hairtails, ink fish, abalone, tuna, lobsters, green turtles, sea cucumber, sea horses and agaragar. Annual catches amount to about 100,000 tons. Specialists estimate that the waters around Hainan Island are 100-200 metres deep, with potential annual catches of over 200,000 tons.

The artificial breeding of marine life in Hainan has a good future. Surrounding waters of 5-10 metres deep covering an area of 25,000 hectares provide perfect conditions for the breeding grounds.