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light industry. Given the high profitability of tropical crops relative to grain production, this emphasis makes good economic sense, especially when Hainan accounts for about 60 percent of China's tropical land. For the implementation of this policy, however, it was obvious that restructuring of the agricultural base to raise the development of Hainan to full potential would require injection of large amounts of capital and new technology.
To assist modernization programmes, Mao's isolationist policy has been discarded, and China has embarked on a promotion of economic co-operation and technological exchanges with foreign countries, with the proviso that such relationships do not compromise China's national independence (Zhao, 1982). As part of this Open Door policy, Hainan Island was opened to investment from foreign and overseas Chinese companies in 1981 (China Daily, December 4, 1981), and to facilitate investment Hainan authorities have been granted decision-making powers similar to those operative in Special Economic Zones (Anon., 1982a). These powers enable Hainan officials to approve joint-ventures with no investment limit, provided such projects do not impinge on the State Plan and do not require finance, energy or any other resource from the mainland (Anon., 1982a).
Foreign investment in tourist-related facilities and industrial projects is being actively encouraged by incentives such as tax breaks and import duty waivers. China will grant a two-year income tax “holiday” on enterprises undertaken and will levy an income tax of only 15 percent thereafter (Bulletin, May 10, 1983). Production equipment and machinery imported in the first five years of a project may be brought in duty-free and imports relating to accommodation for foreign business executives will receive favourable tax breaks.
To create an infrastructure that will attract foreign investment and tourism, the Central Government has placed emphasis on development of Hainan's transport network and energy supply. As part of a Five Year Plan, new ports will be built while the capacity of existing harbours will be increased. The first step will be the extension of ports at Ba Suo, Haikou and Qinglan, and later a deep water port will be constructed at Yangpu. A regular passen-