The year-round growing season and monsoon climate favor the cultivation of rice, coconuts, palm oil, sisal, tropical fruit, coffee, tea, and sugarcane; the island also produces most of China's rubber. The mountainous interior is thickly forested, yielding tropical hardwoods, including teak and sandalwood. Hainan is rich in minerals, notably high-grade iron and tungsten, but also rich in titanium, manganese, salt, copper, bauxite, molybdenum, gold, silver, coal, cobalt, graphite, and crystal. Hainan's rich offshore fishing grounds provide shrimps, scallops, tuna, and Spanish mackerel, and pearls are harvested in the shallow bays surrounding the island. The growth of Hainan's industries, which include the production of textiles and farm equipment, has been hindered by a lack of energy resources. With its tropical climate and many beaches, Hainan is becoming a popular resort site. Hainan was designated a special economic zone in 1988 to spur the development of its considerable natural resources, but speculation led to an economic bubble that collapsed in the mid-1990s. The economy has recovered slowly and growth is now focused on the tourist industry.

The many aboriginal Li, who inhabit the forested interior, have been constituted with the Miao into a large Li-Miao autonomous district. Under Chinese control since the 1st cent. A.D., Hainan was not fully incorporated into China until the 13th cent. It became part of Guangdong prov. in the late 14th cent. In World War II it was occupied (1939) by the Japanese, who developed the industries and exploited the great iron-ore deposits. The island was liberated (1945) by the Nationalists. The Chinese Communists landed in Apr., 1949, and, with the aid of Communist guerrillas from the mountains, gained control in 1950. The Yulin naval base, a natural harbor developed by the Japanese, has been expanded since 1950.