Hainan, known as "China's Hawaii", is on track to become a top tourist destination in Asia after recovering from an economic downturn. The construction of the Haikou Master hotel and serviced apartments, the tallest building in the province, is a sign of the island's efforts to bounce back from a property bubble in the early 1990s. Sales of luxury flats in the complex are doing well, signaling a promising future for the island. Almost all of the 16 million square meters (172.2 million square feet) of unfinished construction from the economic crash has been either completed or demolished, and investors are now returning to Hainan. The previous unrestricted development approach has been replaced with a strong focus on transforming the tropical island in southwest China into a tourist destination comparable to Thailand's beach resorts. Numerous top resorts are opening, and plans are underway to expand visa exemptions, establish duty-free shops, enhance infrastructure, construct airports, increase air connections, and promote foreign language education. Vice governor Chen Cheng stated that tourism is the most distinctive, promising, and competitive industry in Hainan, unveiling a strategic development plan last month. Ian Zheng, Managing Director of the Pacific Alliance Asia Opportunity Fund, expressed that he finds the investment in the group that owns Hainan's main airports and a Beijing property firm working in Hainan very appealing. He believes there are minimal risks involved. The potential for growth in the Chinese market is a major attraction for resorts on the island, as the increasing number of domestic tourists could help support the industry. Peter Pedersen, the general manager of Banyan Tree Sanya, mentioned estimates suggesting that there could be 450 million middle class Chinese in the next 10 years, which further highlights the appeal of investing in Hainan's tourism industry. "I believe that Sanya has a lot of potential." Recently, the Ritz-Carlton and Banyan Tree opened resorts in Sanya, where the island's top beach resort is located. The Mandarin Oriental is also set to open later this year, signifying a significant transformation for Hainan. Previously known in China for budget package tours, Sanya is now becoming recognized as a premier tropical destination in Asia and the only tropical island in China. Pedersen shared this perspective with Reuters. "It is increasingly in demand by both the local market and international tourists. It is considered a perfect location," he said while standing on top of one of the resort's private pool villas, which are priced at around 5,000 yuan per night. Hainan, which became the country's youngest and most economically free province in 1988, has been a test tube for development. Its economy boomed to the point where officials even attempted to sell the city's main park to developers. While other coastal provinces flourished, Hainan struggled. Now, Hainan appears to be on the path to success, but analysts and investors warn that imbalances and conflicts could disrupt the island's recovery. In Haikou, the capital city, around 60 percent of new apartments are being purchased as second homes by individuals who are not from Hainan, a situation that Mayor Xu Tangxian acknowledges. Xu mentioned in an interview that there are areas where all the homes have been sold, but remain unoccupied at night. Despite the fact that most visitors to Hainan are from mainland China, with 18 million tourists last year compared to just 750,000 from overseas, the government is making efforts to attract wealthy foreigners in order to enhance the island's reputation and economy. The objective, as stated by Zhang Qi, the head of the provincial tourism bureau, is to attract 20 renowned international hotel management groups within five years and increase the number of five-star, internationally recognized resorts to 60 or more. As developers eagerly anticipate the tourism growth, stories of typical misconduct are starting to surface. In the rural township of Longqiao, located about a 40-minute drive from Haikou, the red earth is being plowed in large sections on the low hills, resembling fairways for a golf course. Residents claim that government officials persuaded them to sell their land for the construction of a golf course. In early April, anger erupted among the locals when rumors spread that the government had sold the land to the golf course developer for a much higher price than what they were compensated. This led to a violent outburst where an enraged crowd overturned a police car. Subsequently, police reportedly used tear gas to disperse a gathering at a nearby schoolyard. In the southern town of Sanya, some people believe that bottlenecks and corruption are beginning to have a negative impact. A Western investor mentioned difficulties in starting a project due to excessive corruption. Despite these challenges, there is still strong optimism about the potential of Hainan's natural tourism industry. It is believed that the issues in Sanya are just the beginning. Banyan Tree Sanya's Pedersen mentioned that Hainan Island is quite large, with beaches extending almost all the way to the capital city of Haikou. The island has a diameter of 350 km, and there are endless possibilities for exploration.