In recent years the Chinese Communists have been active overseas making known their call for "one country, two systems" and "peaceful reunification" with Taiwan. Since the living standards of the people across the Taiwan Strait differ greatly their propaganda is criticized as being full of empty talk.

Quite naturally, since the surface area and climate of Taiwan and Hainan are very similar, they are often the subjects of comparison. Taiwan and Hainan Island have been under two different systems for more than thirty years. The former is forging ahead towards becoming fully developed while the latter, in the eyes of Chinese Communist "Premier" Chao Tzu-yang, is a place which is "more bleak and desolate than Africa."

The Chinese Communists really have a difficult time holding onto face. They hope to open up their economic system, rebuild Hainan, and catch up with Taiwan in order to prove that "if Taiwan can, then so can we." They want to build up Hainan in order to increase their persuasion of "one country, two systems" and appease the fears of the people of Taiwan and Hong Kong to reach their goal of "peaceful reunification." Since Hainan Island is an isolated island it can become a test site for practicing a free economic system. If the plan succeeds then the experience can be applied to the mainland. Even if production policy or social changes fail they will not affect the mainland.

When the Kaohsiung Export Processing Zone was established it made use of low-cost labor to attract foreign investment and increase job opportunities, as well as imported technology and raw materials. The export-processing zone exported partly-finished products in order to earn foreign currency. Through this method the level of industrial technology increased and a large sum of capital accumulated which was necessary for research. At the same time it also served to nurture technological talent laying down the foundation for the rapid economic growth of the sixties.

The success of the export-processing zone on Taiwan has become a fine model of economic development for other developing nations. Since it first appeared, more than 100 export-processing zones have continued to pop up in various countries. Up until now, however, the only truly successful export processing zones have been those on Taiwan and in the R.O.K. and Ireland. Unfortunately, most have been failures.

Can Hainan Island be a success too if it imitates Taiwan's model?

Fu Feng-cheng from the Chung-hua Institution of Economic Research feels that the success of the export processing zone on Taiwan should be attributed to the government's bringing technicians to Taiwan when it withdrew from the mainland as well as financial support from the U.S. Besides these factors, at that time the developed nations were engaged in technological advances and so there was space left open in the market. The world economic boom at that time provided Taiwan with a good opportunity to develop its economy.

The local people on Hainan Island have a common saying which goes: "Those on the island are pessimistic while those off the island are optimistic." This clearly shows that the enthusiasm of those living on and off the island is not the same. Economists' appraisal of Hainan Island differs greatly. Some think that Hainan Island is the mainland's most promising province, and then there are some who think that her foundation is lacking too much; although the intention may be good, yet the proper means is lacking.

In spite of all this, roads and power plants are being built. There is talk of constructing an international airport, and economists from the mainland attending overseas conferences have discussed with great zest the development of Hainan Island with their counterparts from Taiwan.

Can the "ugly duckling" become a swan? We'll have to wait and see if an immortal has the power to perform some magic.

[Picture]

A Comparison Between Taiwan and Hainan Island

[Picture Caption]

The Chinese Communists say that the shores of Hainan Island are as beautiful as those of Hawaii. Although there's a lot of potential, it lacks the necessary driving force.

(left) Clean beaches are a natural resource of Hainan Island but the basics are lacking, which limit the development of the travel industry.

(right) Grass huts occupied by a minority tribe known as the Miao.

A street scene in Sanya.

(Left, right) Since the implementation of liberalization policies in 1983, construction has been much in evidence, as new buildings rise up next to old ones.

Tropical crops such as coconuts (above) and rubber trees (below left) are resources not found on the mainland.

Having been closed off to the outside world for over thirty years, the residents of Hainan look forward to a new life.

The youthtimes of an older generation were wasted. What does the future hold for the next generation?

Hainan has many natural harbors suitable for the development of shipping.

（left） Clean beaches are a natural resource of Hainan Island but the basics are lacking, which limit the development of the travel industry.

（right） Grass huts occupied by a minority tribe known as the Miao.

（Left, right） Since the implementation of liberalization policies in 1983, construction has been much in evidence, as new buildings rise up next to old ones.

A street scene in Sanya.

（Left, right） Since the implementation of liberalization policies in 1983, construction has been much in evidence, as new buildings rise up next to old ones.

Tropical crops such as coconuts （above） and rubber trees （below left） are resources not found on the mainland.

Tropical crops such as coconuts （above） and rubber trees （below left） are resources not found on the mainland.

Having been closed off to the outside world for over thirty years, the residents of Hainan look forward to a new life.

The youthtimes of an older generation were wasted. What does the future hold for the next generation?

Hainan has many natural harbors suitable for the development of shipping.