In the midst of a tariff conflict between the European Union and China due to taxes imposed by Brussels on electric cars and the same day when Beijing announces new taxes on dairy products from the Twenty-Seven – after the coup d’état against the … pork last week – the Spanish private sector managed to sign an agreement that puts it in the starting position to be able to export without restrictions to this country. Or more precisely to the province of Hainan, an island territory located south of the Quiongzhou Strait that the government of Xi Jinping has transformed into free port so that companies from all over the world can sell there without paying border taxes.
In Hainan, there will be no customs duties on pork, dairy products or any other raw materials, agri-food or manufacturing products. This is not small, since the 34,000 square kilometers of this island are home to a market of 12 million inhabitants.
And Spain’s comparative advantage, in this case, consists of the signing of an agreement -on December 20- between the China-Spain Friendship Association and the provincial government to open what will in fact be the first foreign representative office on the island. As businessman Antonio Miguel Carmona, president of the organization, explained to ABC, this represents “a golden opportunity” for Spanish companies to position themselves in the Chinese market. Not only because of the elimination of customs duties, explains Carmona, but because its status as a special economic zone – it is the first port in Chinese history to acquire this status – means that in Hainan there is an exemption from a good part of the taxes paid in mainland China – for example, barely 15% of personal and corporate income tax – and that the procedures for obtaining import permits are much more agile. And the latter, adds Carmona, could be used by Spanish companies to accelerate their entry into mainland China.
Low taxes
Hainan enjoys a special tax regime with income and corporate tax rates much lower than those in mainland China.
Everything indicates that the new office will be well received, because just one day after the announcement of its opening, ten companies are already ready to enter Hainan; “We didn’t even have time to create the website “which will begin to be operational from January 7,” said one of Carmona’s employees.
Antonio Miguel Carmona is a director and executive president of several companies, he is a professor at Peking University UIBE and one of the few businessmen recognized by the government of the People’s Republic. He has been a director of several international companies, vice-president of Iberdrola – where he managed to reform the business sector of the Basque multinational – as well as a parliamentarian and candidate for mayor of Madrid.
In addition, he is president of the China-Spain Friendship Association, a non-political group with a European vocation that includes prominent figures in Spanish political and economic life; among them, the former president of the Barcelona Football Club, Jeanne Gaspartor Juan C. Abelló, president of the Advanced Entrepreneurship Institute. In addition, its honorary president is Enrique de Borbón.
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