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Hainan Island is located in the South China Sea, separated from Guangdong's Leizhou Peninsula to the north by a shallow and narrow strait. It has an area of 33,920 sq km and is China's southernmost province. For centuries Hainan was part of Guangdong province. The capital is Haikou.
On 1 May 1950, under the PRC, the Special Administrative Region became an Administrative Region Office, a branch of the Guangdong provincial government. .
The Communists resumed development of the island along the lines established by the Japanese, but the results were limited by the island's isolation, its humid and typhoon-prone climate, and its continuing reputation as a place of danger and exile by mainland Chinese. With China's shift in economic policy at the end of the 1970s, Hainan became a focus of attention.
After Doomsday, Hainan was surprisingly well off. The economic growth fostered by the PRC government in the years before Doomsday allowed the island to keep its government in power. The island's location spared it from the swarms of refugees from the mainland.
In 2000 a Hainanese fishing boat made contact with a Vietnamese cargo ship. They were surpised to see a former South Vietnamese flag flying from the mast. They found out that Vietnam had been Democratic for 12 years. Worried that the populace might revolt against the communist government, Hainan's Premier Wang Xiaofeng allowed for the first democratic elections in the island's history. Most of the government officials were re-elected, but it was a step in the right direction.
Hainan has commercially exploitable reserves of more than 30 minerals. Iron, first mined by the Japanese during their occupation of the island in World War II, is the most important. Also important are titanium, manganese, tungsten, bauxite, molybdenum, cobalt, copper, gold, and silver. There are large deposits of lignite and oil shale on the island, and significant offshore finds of oil and natural gas have been discovered. Virgin forests in the interior mountains contain more than 20 commercially valuable species, including teak and sandalwood.
Despite this Hainan's economy is predominantly agricultural, and more than a half of the island's exports are agricultural products. However industry has increased exponentialy, as the Hainanese have used the income from the export of their agricultural products to import machinery for the exploitation of their mineral resources. This income has quadrupled since the opening of the regional markets to Hainanese resources in 2000.
Since the contact with the new democratic regime of Vietnam, the Hainanese have established solid relations with their regional neighbors. They have especially strong relations with Macau and Taiwan. The Hainanese have applied for membership in the League of Nations.