China

How is China’s Smallest Province Hainan Attracting Fintech Giants Like Tencent

Since president Xi Jinping announced a plan to gradually turn Hainan into a pilot free trade zone by 2020 and transform the location into a free trade port by the year 2025, Internet giants and fintech firms are flocking in.

Hainan is the smallest and southernmost province of China, consisting of various islands in the South China Sea. Part of president Xi Jinping’s plan for the province involve attracting and encouraging foreign and multinational companies to set up their regional and international headquarters there and establishing exchanges in commodities and carbon trading, international energy, and shipping.

Image: Hainan, China, Pixabay

An emphasis is being placed on the development of service industries including tourism, the Internet, healthcare, finance, as well as conference and exhibitions hosting.

Since the launch of the program, Hainan has signed more than 150 contracts with major companies, including a 10-billion-yuan (US$1.45 billion) deal with Baidu to build the Baidu Hainan Eco-village.

The Baidu Hainan Eco-village will integrate resources from Baidu, Baidu Union, Baidu-CKGSB Academy and the firm’s partners, and is being planned and built by the Hainan Resort Software Community.

In addition, Baidu has officially released the XuperChain blockchain system, and announced that its blockchain subsidiary, Dulian, will be based in Hainan.

The Hainan Provincial Department of Industry and Information Technology, Baidu, and the Hainan Resort Software Community also committed to jointly build the Hainan Baidu Blockchain Laboratory and launch the Standard Committee of the Hainan Pilot Free Trade Zone and the Free Trade Port Blockchain Pilot Zone with Chinese characteristics, the entities said last year.

Besides Baidu, Hainan has also attracted Internet giants Alibaba and Tencent to its shores.

Other blockchain initiatives recently unveiled in Hainan include the strategic cooperation agreement between Huobi Labs and Tianya Community to open a blockchain lab and fund, and the establishment of the Oxford University Blockchain Research Center (Hainan) by the Hainan Software Park and the Blockchain Research Institute of Oxford University.

Fintech in Hainan

On the topic of fintech, the province has already welcomed several projects.

In July 2018, the Sanya University launched a fintech academy in collaboration with Denmark’s Saxo Bank. Called the Saxo Fintech Business School, the academy intends to position itself as a leading provider of fintech education, and “[strives] to cultivate and train fintech talent that meets the demands of Chinese and global financial enterprises.”

Leading experts on monetary policy and technology from the People’s Bank of China occupy executive positions at the school, while Saxo Bank provides its own experts in economics, finance and computing to serve as teachers.

Cementing Hainan’s ambition to become a leading fintech hub, the province has also hosted its first fintech-focused events.

The inaugural Global Fintech Innovation Summit in Haikou, for instance, held in Haikou in January 2019, attracted a number of well-known domestic and overseas investors, leaders of investment institutions and representatives of financial schools.

During the two-day event, experts discussed the current situations and industrial prospects of fields such as finance, blockchain technology and cross-border e-commerce.

Jim Rogers, a famous American businessman and financial commentator, shared his views on Hainan’s aspirations, stating that the province had every chance to become the next Silicon Valley. Rogers said:

“You have fabulous weather, you have a fabulous lifestyle in Hainan if you continue to open up, and make it easy for people to come here, Hainan probably will become the greatest place in China. The people I met in Hainan are very smart, so I have great expectations.”

The Global Fintech Innovation Summit also saw the establishment of the Hainan Fintech Industry Alliance, which aims to offer services and facilitate cooperation among fintech practitioners and new entrepreneurs so as to expand the influence of the fintech industry in Hainan and optimize the allocation of resources.

Image: Establishment of the Hainan Fintech Industry Alliance at the Global Financial Innovation Summit, Haikou, January 2019, via Finwex

In May, the International Fintech Innovation Conference (IFIC) will be held under the guidance of the People’s Daily and the Sanya Municipal Government. Leading enterprises, experts and investment institutions in the fields of fintech, blockchain and cross-border e-commerce are expected to attend. They will share their visions and explore how Hainan can become the forefront of China’s fintech industry.

Featured image: Hainan, China, Pixabay.