Imagine a tropical island south of China, a place of sandy beaches and coconut palms that Beijing promotes as its version of Hawaii, called Hainan. For the Chinese Communist Party, however, this place is not just a tourist destination; It is also the setting for his latest performance. They baptized it as a “Free Trade Port,” promising the world an unprecedented economic opening. But like everything that comes out of Xi Jinping’s propaganda machine, Hainan is a mirage shiny on the outside and hollow on the inside.
For the reader who wants to place Hainan in context, we are talking about an island province separated from the mainland, historically ignored and underdeveloped. Now, faced with the slowdown in its growth, the regime turns it into a laboratory. The promise? Low taxes, fewer tariffs and supposed “freedom” for business. But when a Chinese communist says “freedom,” it does not mean the same as in Buenos Aires, Madrid or New York.
The great “opening” of Hainan confirms this. Since June 2025, the regime implemented a program called “Global Connect“which allows uncensored internet access, but only for employees of registered companies, upon request, with state approval and using exclusively the three government-controlled operators.”They give away” access to Google as long as Dad State authorizes you, knows who the user is and can turn off the tap whenever he wants. That is, this is a golden cage with controlled Wi-Fi. The West bases its businesses on legal certainty and the free flow of data; China offers a simulation of both.
This behavior is the modus operandi of “Brand China,” a strategy of systematic deception designed to gain time and capital. We see it repeated in every sector that the Communist Party touches.
Look at your tech industry. For years, they sold the idea that China was at the forefront of artificial intelligence and microprocessor manufacturing. They announced their self-sufficiency with great fanfare. The reality is that, after spending billions on state subsidies, its chip industry relies on Western machinery, ARM designs, and foreign intellectual property to move forward. What Huawei manufactured through SMIC are limited chips, produced with techniques that circumvent the lack of Western machinery, not replace it. This is survival engineering disguised as national achievement.
The same happens in the military field, where deception can cost lives. China displays its J-20 fighter jets as if they rival the American F-35. However, they are fighters whose fifth-generation ambitions remain compromised by engines that do not meet the necessary specifications; The WS-15 has been in development for years without convincing operational results. Meanwhile, its clients have already realized and Pakistan, a historical ally of Beijing, faced a bitter reality after purchasing Chinese weapons.
From frigates with missile systems that didn’t lock on to faulty artillery munitions that didn’t detonate, the Pakistani military found out the hard way that “Made in China” in defense often means low quality with good marketing.
But if anyone needs a single fact to understand the nature of the Chinese system, look at Evergrande. In 2024, Chinese regulators themselves accused this real estate company of having fabricated $78 billion in fictitious sales. According to the government, they inflated 2019 income by 50% and 2020 income by 78%. Its founder, who was the richest man in China, ended up banned from the stock markets. And the auditing firm, none other than PricewaterhouseCoopers, was flagged for inadequate internal controls. The largest non-bank corporate bankruptcy in history, with losses exceeding $300 billion for investors, occurred under the direct supervision of the Chinese Communist Party. If this is what they do with their own companies, imagine what they will do with foreign capital in Hainan.
Xi Jinping’s regime fell into its own trap. They believe they can replicate the success of places like Singapore or Taiwan by copying the aesthetics of modernity, with skyscrapers, high-speed trains and giant ports. But they forget that the success of Taiwan and Singapore is not due to cement, but to the rule of law and institutions that generate real trust in the long term. In those places, ethnic Chinese under systems other than communism truly prospered. In mainland China, progress is always conditional on the whim of the Party.
The underlying problem is that China plays in the short term. Their system demands immediate results to justify the absolute power of the Party. They must announce today that they have the best electric car or the best free trade zone to maintain internal legitimacy and project external strength. They don’t care if five years from now the batteries in those cars fail massively or if investors in Hainan flee when they discover they can’t get their money out of the country.
Hainan is ultimately a real estate and tax scam. They want to attract foreign capital to an island where there is no qualified talent, no real supply chains and, above all, there is no law that protects the individual from the State. It is an attempt to create a new Hong Kong, after having destroyed the real one with its obsession with political control.
Lies have short legs. The “opening” of Hainan is nothing more than a papier-mâché decoration. China does not understand that trust is not decreed by law nor built with subsidies. As long as they remain governed by an organization that prioritizes control over truth, projects like Hainan will remain what they always were under communism: an expensive fiction destined to fail.
Things as they are
Mookie Tenembaum addresses international issues like this every week with Horacio Cabak on his podcast El Observador Internacional, available on Spotify, Apple, YouTube and all platforms.
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