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Unveiling growth catalysts: Three narratives driving Hainan Free Trade Port’s Momentum

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By Cao Wenxuan, People’s Daily

On Dec. 18, 2025, the Hainan Free Trade Port officially launched island-wide special customs operations. Since then, many businesses have shifted from a wait-and-see stance to strategic layout, and from tentative trials to in-depth development.

Statistics show that between the launch of island-wide special customs operations and May 31, 2026, a total of 172,100 new market entities were registered in Hainan, a year-on-year increase of 61.07 percent. Among them, 139,500 were newly established enterprises, up 123.04 percent.

What underpins this magnet effect? How do policy advantages translate into developmental thrust? Three illustrative cases provide insights:

Global Repair Hub Redefining Value Chains

On the first day of island-wide special customs operations, the Haikou branch of SonoScape Medical Corp fulfilled the first order of bonded maintenance services for both-ends-abroad clients for endoscopes. The company, headquartered in Shenzhen, south China’s Guangdong province, sells independently developed products to more than 170 countries and regions.

A July 2025 Hainan policy revision classified endoscopes among 38 approved items eligible for internationally oriented bonded maintenance. As general manager Li Xiaoxi explains, offshore service centers often lack advanced repair capabilities, while some replaced components historically faced import restrictions. The Free Trade Port now enables comprehensive refurbishment, reuse, and value-chain upgrading.

“This facilitates the repatriation of high-value industrial segments previously anchored overseas,” Li emphasized.

Six Hainan enterprises now hold bonded maintenance licenses, with three activating operational frameworks. Fifteen international maintenance batches exceeding 3.5 million yuan ($516,620) have been processed under the updated regulatory regime.

Advanced Manufacturing Anchor Ignites Development

At the Yangpu Economic Development Zone in Danzhou, Hainan, construction is in full swing on the Siemens Energy Hainan Gas Turbine Assembly Base and Service Center, which is scheduled to begin operations in 2027.

“This is a comprehensive facility integrating manufacturing, final assembly, engineering services, and research and innovation,” said Li Rui, deputy general manager of the energy development department at Yangpu International Investment Consulting Co., Ltd. “It is also the first landmark foreign-invested manufacturing project to be established in Hainan after island-wide special customs operations were launched.”

The relationship between Yangpu Economic Development Zone and Siemens Energy dates back more than three decades.

“In 1994, just two years after the Yangpu Economic Development Zone was established, development was still in its early stages. We introduced two Siemens gas turbines to address power shortages,” recalled Hu Cheng, chief engineer of Yangpu Power Plant. 

At the time, the turbines were among the most advanced in the world and played a crucial role in supporting the development zone’s early growth. Over the years, Siemens Energy regularly dispatched specialists for maintenance work, and engineers from both countries forged lasting friendships.

Siemens Energy conducted inspection tours for potential cooperation in 2023, set up its Hainan innovation center in 2024, and has now launched a brand-new facility here. The company keeps ramping up investment out of not only long-standing ties but also full confidence in the Hainan Free Trade Port’s long-term growth, an executive of Siemens Energy Greater China explained.

While serving Hainan, the facility will also be developed into a regional center for high-end clean-energy equipment manufacturing and services covering Southeast Asia.

“Hainan enjoys clear geographical advantages and is building itself into a clean-energy island. Yangpu has a deep-water port located close to major international shipping routes. Combined with free trade port policies such as zero tariffs and visa-free access, the conditions for development are highly favorable, ” the executive added.

Longtime partners are expanding their presence, while new investors continue to arrive. Between the launch of island-wide special customs operations and May 31 this year, Hainan registered 1,240 new foreign-invested enterprises, representing year-on-year growth of 37.62 percent.

A New Exploration

Before island-wide special customs operations, the Hainan Free Trade Port’s hallmark policies, characterized by zero tariffs, low tax rates, and a simplified tax system, were primarily designed to support industrial development and businesses.

How can these benefits more directly reach everyday consumers?

In February this year, Hainan introduced a new policy granting zero-tariff treatment to imported goods purchased by residents within the Hainan Free Trade Port. The first five duty-free stores for daily consumer goods opened in Haikou, Sanya, and Danzhou.

 The initiative spans 202 categories of high-turnover consumer goods, including foods, personal care items, household essentials, and maternal & infant products. Eligibility extends to Hainan-registered residents, local residence permit holders, and qualifying foreign permanent residents, each entitled to shop duty-free with an annual cap of 10,000 yuan. This enables island residents to globally source premium goods locally — without leaving Hainan.

The new policy quickly attracted widespread attention. Shao Yuanyuan, manager of a duty-free daily consumer goods store operated by China Duty Free Group, recalled that hundreds of shoppers packed the store on the opening day, eager to explore the new shopping experience.

According to Haikou Customs, between the launch of island-wide special customs operations and May 31 this year, sales for offshore duty-free shopping reached 20.34 billion yuan, up 20.5 percent year on year.

“I believe the duty-free policy for Hainan residents will continue to be refined, just as the offshore duty-free policy has evolved over time,” said Hao Zhiqiang, deputy general manager of Haikou International Duty Free City. “It will enhance the quality of life for local residents while creating even greater opportunities for businesses.”

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Hermann Simon: China fuels global growth for “hidden champions” 

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By Liu Zhonghua, People’s Daily

German management scholar Hermann Simon coined the term “hidden champions” to describe small and medium-sized enterprises (SMEs) that operate below the public radar yet dominate their niche markets — typically ranking among the top three globally in their sector. These firms are distinguished by deep specialization, relentless innovation, and a fundamentally global mindset.

Having visited China over 70 times and closely tracked its industrial evolution, Simon remains deeply optimistic about the vitality of its SME sector. In an exclusive interview with People’s Daily in Hasborn, Germany, he noted that China has systematically cultivated a new generation of “hidden champions” through a phased support framework tailored to different stages of enterprise development.

He spoke highly of China’s achievements in technological innovation, industrial upgrading, and through a phased support framework tailored to different stages of enterprise development. He emphasized that Chinese companies have already emerged as global innovators across several cutting-edge industries.

“The outdated notion that China merely replicates foreign technology no longer holds,” he said. “Chinese enterprises are now leading the way in innovation within multiple advanced fields.”

According to Simon, China’s approach centers on long-term strategic commitment. “The country guides its specialized firms to focus on foundational technologies and pursue continuous, incremental innovation. This disciplined approach is essential for overcoming core technological bottlenecks and securing dominant positions in global niche markets.”

He highlighted China’s five-year plans as a key driver of industrial clarity and strategic foresight. “Well-calibrated assessments of emerging sectors provide businesses with clear developmental pathways, showcasing strong institutional coordination,” Simon explained. 

Strategic top-down planning, he added, helps consolidate resources, foster fair competition, and nurture globally competitive leaders. Strategic top-down planning, he added, helps consolidate resources, foster fair competition, and nurture globally competitive leaders. For other developing nations seeking to industrialize, he suggested studying China’s long-term strategy: leveraging domestic strengths to target distinctive niche industries and cultivate high-value-added champion enterprises offers a practical, scalable model.

Beyond macroeconomic growth, Simon underscored the role of these specialized firms in advancing balanced regional development and shared prosperity. 

While large corporations typically concentrate in megacities, many “hidden champions” are rooted in counties, smaller cities, and townships.

He pointed to Shandong Moris Tech, based in Shouguang, east China’s Shandong province, which expanded its specialty chemical operations across regions while remaining rooted locally. “Nurturing these highly specialized enterprises distributes high-skilled jobs and value creation across broader urban and rural areas,” Simon observed. 

“This provides a viable pathway toward more equitable regional development and inclusive prosperity.” Simon also pointed to China’s unparalleled industrial ecosystem as a major competitive advantage. With over 2,000 German firms operating manufacturing facilities in the country, he noted that dense supply chains and clustered industrial parks remain powerful draws. 

“Comprehensive infrastructure, a vast talent pool of engineers, and a massive domestic market make China an ideal testing ground for advanced manufacturing technologies and their large-scale deployment,” he said. “Ignoring the Chinese market would mean forfeiting access to one of the world’s largest industrial hubs, which accounts for nearly one-fifth of global industrial output.”

He added that China’s resilient domestic demand offers multinational companies valuable medium- to long-term certainty.

Consequently, many German “hidden champions” have established R&D centers and integrated value chains in China, leveraging the country’s open, dynamic ecosystem to extend their corporate lifecycles.

China’s well-developed and open market is not only a growth engine for “hidden champions” worldwide, but also an important source of their core competitiveness, Simon said.

As competition intensifies across niche industries worldwide, greater coordination and collaboration among specialized companies in Europe and China could become an important force in reshaping the global industrial landscape, Simon said.

Two-way investment between Europe and China can help improve structural imbalances in trade and economic ties. As Chinese companies accelerate their localization efforts in Europe by establishing R&D and production bases and creating local tax revenue and jobs, economic and trade cooperation between China and Europe can evolve from one-way trade in goods toward joint industrial development, helping mitigate the risks posed by trade barriers.

Regular in-person exchanges can also strengthen business trust, stabilize expectations for industrial investment and help reduce misperceptions arising from geopolitical competition, Simon said.

Reflecting on the past two decades, Simon acknowledged that China’s manufacturing sector has undergone profound transformation. Many specialized enterprises have significantly upgraded their technological capabilities and product quality, successfully surmounting key innovation challenges.

Looking forward, he cautioned that Chinese companies still face hurdles in three areas: deepening their international footprint, building globally recognized brands, and executing localized overseas investments.

“I hope more Chinese manufacturers will expand into European and U.S. markets, achieving tangible progress in brand globalization; promote balanced and mutually beneficial industrial investment between China and Europe; and help preserve a stable, predictable global trade environment while safeguarding supply chain continuity,” Simon said.

“By deepening cooperation between Chinese and foreign real-economy sectors on the basis of openness, connectivity, mutual benefit and win-win outcomes, we can help safeguard the long-term stability and development of global industrial and supply chains,” he concluded.

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A Decade of Growth: China-Europe Freight Rail Trips Surge 10.8-Fold

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By Li Xinping, People’s Daily 

This year marks the 10th anniversary of the China-Europe Railway Express operating under a unified brand. Over the past decade, the service has completed more than 130,000 journeys, transporting cargo valued at over $520 billion. What began as a regional freight initiative has evolved into a globally recognized logistics network.

Why has the China-Europe Railway Express developed so rapidly? Its unified brand has been crucial.

When the inaugural China-Europe freight train departed Chongqing in 2011, followed by subsequent services from Wuhan, Hunan, and Zhengzhou, growth was steady but fragmented. Annual departures rose from 80 in 2013 to 815 in 2015. 

However, independently operated local services led to duplicated efforts, elevated costs, inconsistent standards, and weak market recognition — bottlenecks that threatened further scaling.

On June 8, 2016, the China-Europe Railway Express officially launched its unified brand. Featuring a streamlined emblem that combines railway and silk motifs in red and black, the new identity standardized train naming, visual design, and marketing across all participating regions.

By consolidating resources and aligning operational protocols, the network significantly strengthened its overall competitiveness. Annual train journeys jumped from 1,702 in 2016 to 20,022 in 2025 — a 10.8-fold increase, reflecting an average annual growth rate of 31.5 percent. 

Today, the China-Europe Railway Express is increasingly recognized by countries along its routes for its advantages of speed, punctuality, safety, reliability, and environmental sustainability.

Connectivity remains the foundation of modern logistics. With unified branding and planning, service now operates three primary corridors — western, central, and eastern — spanning        96 scheduled routes at an average speed of 120 km/h.

At present, 129 Chinese cities connect to 236 cities in 26 European countries. Compared to 2016, the network has expanded by 113 cities domestically and 216 internationally, effectively covering much of the Eurasian landmass and providing a reliable backbone for cross-border trade.

Efficiency drives competitiveness. Transit speeds have been consistently optimized: trains cover approximately 1,600 km daily on Chinese territory and 1,000-1,300 km overseas, making them roughly one-third faster than conventional rail-sea intermodal alternatives. 

Capacity has also scaled up; upgraded rolling stock now supports trains of up to 55 cars and a maximum trailing weight of 3,000 tons, enabling heavier loads without compromising speed. 

Customs clearance has also become more efficient. In recent years, with the adoption of a “railway express” customs clearance model and the development of digital ports, customs clearance at China-Europe freight train ports has been reduced to as little as 30 minutes.

To simplify the supply chains, the service offers a centralized digital portal for end-to-end logistics management. For example, a Hangzhou-based equipment manufacturer executive recently used the platform to coordinate door-to-door transport, customs declaration, and integrated logistics. His shipment, dispatched from Zhengzhou, reached central Europe in just 17 days. Upon arrival, customer service teams remotely guided overseas partners through unloading to ensure a secure and efficient handover.

The model’s flexibility proved critical during a recent urgent shipment handled by a Xi’an-based logistics operator. A European chemical manufacturer needed 310 containers (18,600 tons) of raw materials delivered within 35 days. Ocean freight would take 45 to 60 days, while trucking would require over 600 vehicles and expose costs to volatile fuel prices.

“The China-Europe Railway Express took just 10 to 20 days for the full journey and had a large carrying capacity. It reduced total logistics costs by 29 percent, ensuring that the overseas chemical enterprise could start production on schedule,” said Su Lu, general manager of the Xi’an company.

As operations matured, transportation costs along both domestic and international segments have dropped by more than 40 percent since launch. Cargo diversity has expanded dramatically:  trains now carry goods across 53 categories, covering more than 50,000 types of products. High-value-added goods, including automobiles and auto parts, machinery equipment, and  electronics dominate outbound shipments, while inbound cargo includes timber, pulp, specialty agricultural products, and consumer goods.

Today, the China-Europe Railway Express continues to evolve.

On June 24, the first “zero-carbon” China-Europe freight train from the Yangtze River Delta successfully arrived at Yiwu West Railway Station in Zhejiang province. Operating under the Duisburg-Yiwu full-route timetable, the train used 100 percent green electricity on electrified sections. On non-electrified sections, it offset its remaining emissions through Gold Standard certified carbon offset projects, achieving net-zero carbon dioxide emissions during train operations.

As electrification upgrades continue along railway routes and clean transport vehicles, including new-energy heavy trucks, are increasingly deployed for cargo collection and distribution, the “steel camel caravan” spanning Eurasia is taking on an increasingly distinct green character.

After a decade of development, the “steel camel caravan” has grown far beyond a single transport route. With reliable capacity, efficient coordination and a commitment to green development, it has become a widely welcomed international public good.

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Baton of China-U.S. friendship passed down from one generation to the next

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By He Yin, People’s Daily

Veteran participants of China-U.S. “ping-pong diplomacy,” now well over seventy years of age, have returned to China, passing on to a younger generation the torch of friendship lit by the “little ball” that helped set the “big ball” of China-U.S. relations in motion.

Today, that tradition continues on the pickleball courts, where young Chinese and American players are forging new bonds. Embodying the ethos of “sportsmanship before victory,” they are proving that shared passion can transcend borders.

From table tennis, which helped open the door to China-U.S. exchanges 55 years ago, to pickleball, now increasingly popular among young people in both countries, this passing of the “little ball” from one generation to the next over more than half a century vividly demonstrates the enduring vitality of people-to-people exchanges between China and the United States and the deep, lasting friendship between the two peoples.

This year marks the 55th anniversary of China-U.S. “ping-pong diplomacy.” In 1971, a modest table tennis match shattered years of diplomatic isolation, reopening channels of communication and laying the groundwork for normalized relations. The event remains a landmark moment in modern diplomatic history. 

Over the decades, numerous initiatives have deepened mutual understanding. Pioneering cultural missions, including performances by the Philadelphia Orchestra, helped lay the foundation for sustained artistic exchange. Meanwhile, the historic Kuliang friendship keeps alive a people-to-people friendship spanning a century. Together, these efforts have woven a rich tapestry of shared experiences.

In the new era, the spirit of engagement embodied in “ping-pong diplomacy,” which brought the Chinese and American peoples closer together, is taking on new forms and gaining new vitality. 

Games like pickleball, known for their accessibility and social nature, effortlessly bridge linguistic, cultural, and geographical divides. For young Chinese and American athletes meeting for the first time, the court becomes a space for mutual learning, teamwork, and genuine connection.

These interactions reaffirm a fundamental truth: sustained people-to-people ties remain the bedrock of resilient China-U.S. relations, providing the trust necessary to navigate challenges and steer bilateral engagement forward.

Strong interpersonal connections are essential to stable diplomatic relations. Looking to the long-term development of friendship between the Chinese and American peoples, in San Francisco in 2023, Chinese President Xi Jinping proposed an initiative to invite 50,000 young Americans to China for exchange and study programs in a five-year span. 

In just over two years, the number of young Americans who have visited China for exchanges has surpassed 50,000, achieving the target ahead of schedule. Driven by the initiative, a growing wave of American youth are traveling to China to explore its landscapes, engage with emerging technologies, and experience daily life firsthand. 

By witnessing China’s developments directly, these visitors are moving beyond media narratives and algorithmic echo chambers, replacing stereotypes with nuanced, personal insights about mutual potential as partners and friends.

Many returnees have taken to social media to share their journeys, offering unfiltered perspectives to audiences back home. Their posts highlight how China’s rich heritage coexists with rapid innovation, while emphasizing the warmth, hospitality, and openness of its people.

As young Chinese and American travelers continue to bridging vast distances, they are planting seeds of mutual respect and shared curiosity. With time and cultivation, these connections will take root, fostering a more resilient, pragmatic, and constructive future for China-U.S.relations.

Today, China-U.S. relations once again stand at a critical juncture in history, and the strategic choices made by the two countries will once again shape the course of the world. 

By making friends and competing within the rules on the pickleball court, young people from China and the United States are offering valuable lessons for the two countries on how to interact with each other. 

Just as players on the court must follow the rules, China and the United States must coexist peacefully on this planet and refrain from crossing red lines or overstepping boundaries on issues concerning each other’s core interests. 

And just as athletes improve through learning from and competing with one another, China and the United States should explore ways to expand areas of cooperation and do more things that benefit both countries and the wider world. 

In recent years, young people from China and the United States have worked side by side aboard research vessels to unlock the mysteries of the ocean and joined forces at maker competitions to explore solutions to global challenges, demonstrating through action the enormous potential for cooperation between the two countries. 

Looking ahead, the steady and sustained development of the “big ball” of China-U.S. relations will continue to depend on countless “little balls” of people-to-people friendship. People from all sectors of both countries, especially the younger generation, should draw wisdom and strength from history, get to know and grow closer to each other through exchanges and cooperation, and move forward together by learning from one another. By strengthening the bonds of friendship, they can make new contributions to stable, healthy and sustainable China-U.S. relations.

A small ball can connect people across mountains and seas; a bond of friendship can transcend time and space. 

Just as pickleball draws on the strengths of several sports, the vast planet we share has ample room for China and the United States to pursue their respective development and achieve common prosperity, and for different civilizations to complement and enrich one another. 

China remains committed to expanding people-to-people and cultural exchanges with the United States, writing a new chapter of friendship between the two peoples, and injecting a steady stream of people-to-people strength into building a constructive China-U.S. relationship of strategic stability.

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