of the Chinese civil war thought that the fall of Hainan Island to the Communists would be followed shortly by the fall of Taiwan Island, the lack of any communist guerrilla force on Taiwan Island and its sheer distance from the mainland made this impossible, as did the arrival of the US 7th fleet in the Taiwan Strait after the outbreak of the Korean War in June.
On 1 May 1950, under the PRC, the Special Administrative Region became an Administrative Region Office, a branch of the Guangdong provincial government. On October 1, 1984, it became the Hainan Administrative Region, with a People's Government, and finally as province separate from Guangdong four years later.
In 1988, when the island was made a separate province, it was designated a Special Economic Zone in an effort to increase investment.
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.
During the mid-1980s, when Hainan Island was still part of the Guangdong Province, a fourteen-month episode of marketing zeal by Hainan Special District Administrator Lei Yu put Hainan's pursuit of provincial status under a cloud. It involved the duty-free imports from Hong Kong of 90,000 Japanese-made cars and trucks at a cost of C¥ 4.5 billion (US$ 1.5 billion), and exporting them – with the help of local naval units – to the mainland, making 150% profits. By comparison, only 10,000 vehicles were imported into Hainan since 1950. In addition, it involved further consignments of 2.9 million TV sets, 252,000 videocassette recorders & 122,000 motorcycles. The money was taken from the 1983 central government funds destined for the construction of the island's transportation
