They should focus on using the Hainan base for more of the space launches. The ones in central China are dangerously close to villages and other population centers.
It is not that simple. Haina's advantage is to launch to southeast over the sea. In most cases the first stage won't fall on Philippines. It is also advantages if the intended orbit has low inclination.
When launching SSO and high inclination orbit, Hainan doesn't have much advantage because the first stage will either travel over Chinese mainland or over south-east Asian countries. It is even worse than inland launching. Because from inland site, the first stage would likely land somewhere in China, from Hainan it would likely drop on foreign countries, a bigger trouble.
The first stage landing area used to be no-man's land deep in forest and mountains. It should have NOT been allowed for residential purpose, after all only the state owns land in China, any such expansion of residential land was approved by local government without considering the space agency's need. It is just like how Chengdu city's residential complex has extended at the wall of CAC. There was a decree from central government few years ago demanding local government must coordinate with military to secure military usage of land. This should be applicable to space industry as well.