How did Hainan’s economy change after it became a special economic zone?

When Hainan was designated as a special economic zone and elevated to province-level status in 1988, its economy underwent a significant transformation from a predominantly agricultural base to one driven by industrial and market-oriented growth.123

Key changes included:

• Industrial Expansion: The central government encouraged foreign investment and allowed the island to rely heavily on market forces. This led to rapid economic growth, which at times exceeded 20 percent annually during the 1990s. By 2007, the province's industrial output surpassed its agricultural output in value for the first time.14
• Infrastructure Development: The transition was accompanied by significant improvements to the island's infrastructure, including the construction of expressways and the expansion of international airport facilities.43
• Diversification: While the economy was historically limited to processing mineral and agricultural products, it diversified into sectors such as offshore petroleum and natural gas exploitation, automobile production, and metallurgy.5
• Tourism Growth: Leveraging its natural attractions, Hainan became a major tourist destination, with the development of numerous hotels and facilities becoming increasingly important to the economy starting in the late 1990s.5