Key Points:

  • The Counsel has spelled out six strategies for development of the island
  • Measures include expanding the lottery business, extension of a favorable visa-free policy and encouraging foreign cruise companies to operate in Hainan

On the last day of 2009, the PRC State Counsel issued Several Opinions Regarding Boosting Hainan to Develop Into an International Tourism Island (the Opinions). The Counsel hopes to develop the southern island of Hainan, China’s only tropical province, into a top international tourism destination by 2020. The Opinions explicate six strategies for the development plan, which include developing Hainan into a pilot region for China’s tourism industry reform, building the island into a world-class leisure travel and holiday tourist destination, establishing a demonstration zone for China’s ecological development, making Hainan an important platform for international economic cooperation and cultural exchanges, developing resources in the South China Sea, and developing Hainan into a service base as well as a modern national tropical agricultural base.

Among other things, the measures include:

  • Lottery Business – According to the Opinions, Hainan will be allowed to “explore and develop” pari-mutuel sports betting and instant betting on international sporting events, which offer an alternative to mainland government-sanctioned gambling. At present, only two kinds of wagering are legal in mainland China: sports betting overseen by the PRC Sports Lottery Center and the welfare lottery issued by the China Welfare Lottery Center. Given the Opinions, new kinds of lotteries can be issued in Hainan with less government scrutiny and more creativity.

While it is unclear what new types of gambling will be issued and when, there has been quite a lot of speculation that horseracing could be introduced to the island, or that Hainan would even become China’s answer to Las Vegas. Such speculation, however, has no legal basis. China is a country that strictly controls gambling; allowing Hainan to build casinos or become another Las Vegas would require amendment to China’s fundamental laws, such as the Criminal Law.  

  • Visa-Free – The Opinions extend the favorable visa-free policy beyond the previous 21 nations (including the United States, Japan and Canada) to five other nations including Finland, Denmark, Norway, Ukraine and Kazakhstan. In addition, the visa-free policy previously applied only to five or more people applying as a group; the Opinion lowers that number to two for tourists from Russia, Korea and Germany and extends the permitted period of visitation from 14 to 21 days. It is expected that the relaxed policy will be applied to more countries.  
  • Foreign Cruise and Travel Agency – The Opinions explicitly encourage foreign cruise companies to establish an operational presence in Hainan and provide international cruise services. Currently, a few foreign cruise companies have established foreign-invested travel agencies in China. Foreign-invested travel agencies, however, are not allowed to provided outbound travel service, – i.e., they can bring in customers but cannot solicit customers from China to go abroad. Therefore, under the current law, it does not make much sense for foreign cruise companies to establish a presence in China. It is unclear whether the Opinions would allow the “operational” presence of foreign cruise companies to solicit customers from China. Detailed implementation rules may provide further explanation.