A brief analysis of the blockchain policy in the Overall Plan for the Construction of Hainan Free Trade Port

The world today is undergoing a new round of great development, great changes and great adjustments. Regional protectionism and unilateralism are on the rise, and the process of economic globalization is encountering greater headwinds and backwashes.

Just on June 1, the Central Committee of the Communist Party of China and the State Council issued the "Overall Plan for the Construction of Hainan Free Trade Port", which mobilized the whole country to support Hainan in actively exploring and steadily advancing the construction of a free trade port with Chinese characteristics, and establishing a free trade port policy and system in steps and stages.

Hainan is the largest special economic zone in my country and the only provincial special economic zone among the seven special economic zones in my country. Hainan has the unique advantage of implementing comprehensive and in-depth reforms and experimenting with the highest level of opening-up policies. Building a free trade port in Hainan is a fundamental requirement for my country to establish a new open economic system and an urgent need to create a world-class business environment.

For us blockchain practitioners, what we are most concerned about is whether the plan involves blockchain-related planning. After reading the entire plan, I found that the application and plan of blockchain technology in Hainan Free Trade Port was mentioned six times in the plan.

In fact, since the collective study of the Political Bureau in October last year, although various regions have introduced measures to vigorously develop blockchain technology, they are generally in response to the central government's call. They are still unsure about what blockchain can do and how to develop blockchain, so all the measures introduced are supportive measures. That is, through financial subsidies, tax exemptions, talent incentives, etc., let the market develop on its own.

This plan provides a clearer picture of what blockchain can do, how to develop it, and when to develop it. It is also the first plan issued at the central level that independently mentions the development of blockchain technology.

The plan mentioned that blockchain technology can be applied to property rights protection, information industry and social governance. In terms of improving the property rights protection system, the plan mentioned that it is necessary to strengthen the application of blockchain technology in intellectual property transactions and evidence storage, and explore new models suitable for the development of the free trade port. It is also necessary to strive to build Hainan into a blockchain technology and industry innovation and development base, and establish standards and rules for blockchain finance.

It also mentioned that we should focus on platform carriers, focus on technologies such as the Internet of Things, artificial intelligence, and blockchain, and vigorously develop the information industry. It also mentioned that we should promote the reform of government institutions and the transformation of government functions, and encourage the integration of blockchain and other technologies, and integrate them into the modernization of the free trade port governance system and governance capabilities.

In my opinion, the "national plan" promoted by the central government, such as Hainan Free Trade Port, must have been comprehensively considered. Large-scale research will be conducted in the early stage before it is finally put into the plan. The feasibility of the future development of blockchain technology and how to achieve it will be repeatedly verified in theory.

The plan clearly defines blockchain technology as part of the information industry, and the areas involved include intellectual property transactions, evidence storage, government governance, blockchain industry bases, blockchain finance, etc. The development directions of blockchain technology pointed out in the plan are all areas where exploration and trial have been carried out and have accumulated certain accumulation and precipitation. Its development ideas have been basically confirmed. It is a more reasonable way to explore the implementation of blockchain technology in these areas.

For example, the plan proposes to build a national blockchain technology and industry innovation development base in Hainan. In fact, Hainan has always taken an active attitude towards blockchain technology. When blockchain was not yet included in the core technology at the national level, Hainan actively embraced blockchain. In October 2018, the Hainan Free Trade Zone (Hong Kong) Blockchain Pilot Zone was established in Hainan Ecological Software Park. Subsequently, many blockchain companies announced their entry and even moved their headquarters to Hainan. Because whether it is the entrepreneurial environment, policy support, or regulatory supervision, Hainan is an ideal choice for domestic blockchain practitioners.

As for the part about "focusing on platform carriers, improving industrial capacity, and developing the information industry with a focus on the Internet of Things, blockchain, artificial intelligence, digital trade, etc. and relying on Sanya Deep Sea Science and Technology City and Wenchang International Aerospace City to plan and build major scientific and technological infrastructure and platforms to cultivate deep-sea and deep-space industries", it is actually a combination of major central policies and small local policies.

The mission of the free trade port is to promote trade and consumption. Hainan Free Trade Port will implement a tax-free policy for high-tech, tourism, service and other industries before 2025, and even many imported goods will be tax-free. This kind of opening will also bring certain management difficulties. For example, customs entry and exit management, visa information synchronization, consumption information, tax exemption qualifications and other issues make blockchain and other technologies very important.

From a global perspective, Hainan is one of the regions that supports the development of blockchain technology the most. In fact, Hainan not only supports blockchain, but also supports various emerging technologies. Although Hainan is also a special economic zone, at present, Hainan still has a big gap in economic development compared with free trade zones such as Hong Kong, Singapore, and Shanghai. Hainan's economic scale is at a relatively low level, the industrial foundation is weak, and the economic outward orientation is not high.

Hainan has unique geographical location and natural resources, which are quite advantageous and contain huge development space. With the strong support of the central government, national policy support and the promotion of the whole country, Hainan is likely to become a global trade port comparable to Hong Kong and Singapore.

Opening up has brought many benefits, but the construction of the free trade port will also place high demands on Hainan's execution and innovation capabilities. Hainan's managers clearly recognize the help that high-tech brings to social governance and economic development. Once the cluster effect of science and technology enterprises appears, talents will quickly gather where funds and policies are concentrated, which will greatly promote the development of local enterprises and Hainan's economy.

Earlier we talked a lot about the policies and benefits of blockchain technology in the “Overall Plan for the Construction of Hainan Free Trade Port”. However, a considerable part of the current development of the blockchain industry still revolves around “digital currency”. So what impact does Hainan have on “digital currency” and the “currency circle”?

There has always been an atmosphere in the cryptocurrency world that any policy favorable to blockchain will be beneficial to Bitcoin and the cryptocurrency world. I believe that there are vested interests behind this, hoping to deceive investors and gain benefits for themselves through these events.

I have to pour cold water on those who have such fantasies. For the top leaders, a policy must meet three points: feasibility, popularity, and necessity. The policy must be in the interests of the majority of people, and the coverage of the cryptocurrency circle is insignificant compared to the 1.4 billion population of my country. It is impossible to make a big policy for the small increase of Bitcoin.

What's more, digital currency itself is a zero-sum game. Many investors have suffered huge losses and it is also the target of severe crackdowns by regulators. In mid-May, Hainan just issued the "Notice of the Hainan Provincial Department of Industry and Information Technology on Strictly Carrying out Blockchain-Related Business in Accordance with the Law", strictly prohibiting cryptocurrency business.

Therefore, Mao Wen once again reminds those who hope that Hainan Free Trade Port will "give the green light" to digital currency transactions and "regularize" them, not to have such unrealistic fantasies. The central government has set a very clear tone for blockchain technology. Blockchain technology is used to serve society and help social governance, not a "weapon" for some people to seize the interests of others. In the future, the supervision of digital currency will only become more and more stringent, which will make it impossible for those who issue coins to make money to survive.

Hainan’s new blueprint for the future will definitely be realized. We also look forward to the fact that by 2025, blockchain technology will truly take root in Hainan and blockchain can be integrated into all aspects of social governance.