“China on Thursday split off a Belgium-sized island with an economy comparable to a mid-sized country from the mainland for customs processing, part of a bid to join a major trans-Pacific trade deal and establish a new Hong Kong-style commercial hub.

Officials hope that turning the southern province of Hainan into a duty-free zone will spur foreign investment, with goods that achieve at least 30% local value add able to move on into the world’s second-largest economy tariff-free. Foreign firms will also be able to operate in service sectors that are restricted on the mainland.

China is also seeking to boost its free-trade credentials to convince members of one of the world’s largest free-trade deals, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), that it can meet the bloc’s high standards for trade and investment openness through pilot projects such as the Hainan Free Trade Port.”

From Reuters.