A national political adviser suggested that an island in the South China Sea be built into an offshore financial center.

Han Fangming, vice chairman of the Foreign Affairs Committee of the Chinese People’s Political Consultative Conference (CPPCC) National Committee and chairman of the Charhar Institute, a nongovernmental think tank.

Yongxing Island, the largest island of the Xisha Islands group in the South China Sea, should make use of its geographical advantages to offer offshore company registration services and offshore financial services, said Han Fangming, vice chairman of the Foreign Affairs Committee of the Chinese People's Political Consultative Conference (CPPCC) National Committee, during the ongoing annual sessions of the country's national legislature and top political advisory body in Beijing.

The central authorities should learn from the experiences of other international offshore financial centers and make Yongxing Island a pioneer in the country's reform of the financial system and modernization of the governance system, suggested Han, who is also the chairman of the Charhar Institute, a Chinese think-tank focusing on international policy.

Between 2004 and 2014, many large Chinese companies, such as Baidu Inc., Alibaba Group and Sina Corp., were registered in the Cayman Islands, one of the most popular offshore financial havens, to become listed in foreign stock markets or facilitate international capital operations. "In some senses, it caused a loss of national assets," Han said.

Yongxing Island is located in a strategic position in the South China Sea. Promoting offshore services there will be a boon to both local economic development and the safeguarding of national interests, Han said.

Covering a land area of 2.16 square kilometers, Yongxing Island is home to the municipal government of China's southernmost and youngest city of Sansha.