China is planning to transform an island the size of a small country into a sprawling hub for foreign investment, gambling, tourism, and luxury.

Xi Jinping's government announced its plans for Hainan last month. It said it would encourage the horse racing, gambling, and water sports industries to the island known as the "Hawaii of the East."

This is a big deal: The Chinese Communist Party bans its members from playing golf, prohibits gambling, and only allows occasional horse-racing.

The island of Hainan is located in southern China. Its Chinese name — 海南 — means "south of the sea." Its population is around 9 million, and its landmass is around the size of Belgium.

Many ad campaigns and news outlets have described the island as the "Hawaii of China" or the "Hawaii of the East."

Thomas Liu, a native of the central Chinese city of Chengdu, told CNN: "I think many people, when we are young, we know that Hainan is a very beautiful place, so I think for many people they have a little dream to go to Hainan."

China used to limit international tourism into the island — now it's relaxing the rules. Earlier this week the government said it would let citizens of 59 countries go there visa-free for a month, extending earlier liberalisation.

China has actually been trying to develop Hainan's tourism industry for years, but has struggled. The island attracted around 70 million tourists last year, but only 1.1 million were from other countries.

In comparison, Bali, which is one-sixth the size of Hainan, received more than 5 million foreign tourists in the same period, the South China Morning Post reported.

The island is currently home to multiple luxury hotels, golf courses, and beaches. The Mandarin Oriental, Ritz Carlton, and Shangri-La all have chains on the island.

The island also home to multiple golf courses — one of which was used for the Ladies' PGA tournament last November. Golf is usually regarded unfavourably in China because Mao Zedong, the founding father of the People's Republic of China, dismissed it as a "sport for millionaires."

Earlier this month the government also said it would encourage people to pursue water sports, horse racing, and gambling in the region. This is a big deal: China bans all forms of gambling on its mainland, and only allows some horse racing.

The government said in a document published last week it would "encourage the development of beach sports, water sports, horse racing, and other projects, and support the creation of a national sports tourism demonstration area. Explore the development of quiz-type sports lottery tickets and large-scale international events that open lottery tickets."

China has built artificial islands around Hainan as well. One is Phoenix Island, which was designed just for tourism and luxury — a promotional pamphlet even called it "Oriental Dubai."

Another one that's currently being built is Nanhai Pearl Artificial Island, a 266-hectare (1 square mile) large atoll which will take the shape of a yin-yang symbol.

China has a lot of plans for Hainan beyond tourism. It also wants to transform the island into a hub for artificial intelligence, virtual reality, and electric cars.

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