Beijing’s plan to open up “China’s Hawaii” as a gateway for Indo-Pacific investment and economic ties is an attempt to counter the United States’ efforts to form alliances against China in the region, analysts say.

The Hainan plan, unveiled by President Xi Jinping in Haikou, the provincial capital, on Friday, will have “genuine value” for China’s trade with countries in the Southeast Asian and Pacific regions, according to Iris Pang, chief Greater China economist with banking and financial services provider ING. 

Richard A. Bitzinger, visiting senior fellow with the Military Transformations Programme at the S. Rajaratnam School of International Studies, said a more developed Hainan would serve as “a better jumping-off point for the Chinese military”.

“The island is already home to a major base for nuclear submarines,” he said. “Hainan is a good base for reinforcing Chinese military facilities in the South China Sea, especially Woody Island and the artificial islands in the Spratlys.

“And it puts the Chinese military and economic capability about as close as possible to the Malacca and Singapore straits and the entry into the Indian Ocean.

“In other words, Hainan is a win-win for China. It is geographically well suited for the ‘Belt and Road Initiative’ and politically safe as well. Modernising Hainan can only help China’s presence in the south.”

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