I went there in Nov 09 for about a week. Spent most of my time in Haikou (the provincial capital in the North of Hainan), with a day trip to Sanya (~260km drive 1 way). I had a local driver who drove me around (sort of like a dedicated cab driver/tour guide who is licensed to do so).
My observations about Hainan in general:
1. The locals are complaining about the real estate prices. Since the labelling of Hainan as China's Hawaii, affluent Chinese have been snapping up properties there for retirement, thus driving up real estate prices. My tour guide was complaining that property prices in Hainan had risen 3 fold since 2003! (may be an exaggeration, but sky rocketing property prices in Hainan itself is not surprising as there is no industrial population on the island).
2. There are serious developmental efforts going on in Hainan at the moment. During my time there, I saw the construction of a rail network that goes round the entire island. Once completed, the rail system will cut travel time between the main population centres in Hainan substantially. IIRC, it should be completed in 2012.
3. Sanya is a really nice place for a vacation. Whilst there are a lot of resorts, it is not really developed yet if compared to Hawaii. Thus, there is still a bit of a country-side feel to it at the moment. The beaches there are really nice too. I went to Ya Long Bay just outside Sanya town. From the beach, PLAN warships in their new naval base can be seen!
4. Unfortunately, the issue with Hainan (and Sanya) is the limited amount of "public beaches" available to the general public. This is because a lot of resorts "buy up" beach fronts where only their guests (and those who pay a fee) can gain access to. Thus, the public beaches tend to be rather crowded.
5. Haikou is the largest population centre in Haina. But it is currently not particularly modern. Its shopping centres are a bit old. But, there are plenty of gleaming, modern residential properties being built in a lot of places. The modernisation of the city centre is likely to take place over the next decade or so.
6. There is talk of a long term plan to build a tunnel (or bridge) linking Haikou to the main land. If actually carried out, it will probably lead to a mini-boom as the current sea link is not very convenient and is subjected to the mercy of typhoons.
7. There are native minorities in Hainan (Miao and Li tribes) who mostly reside in the southern parts of the island. Some of these minorities are actually Muslims. My tour guide was explaining that these minorities are given hugely subsidised housing by the authorities, and they are the only groups of people allowed to do pearl diving (their traditional livelihood). Thus, in a sense, they have a guaranteed source of income (which is quite lucrative). And I get the sense that my guide wasn't too happy with the privileges enjoyed by the minorities.
8. My tour guide was aware of the forcing down of the US EP-3 a few years back. He proudly highlighted the airfield where the EP-3 landed as we drove past on our way to Sanya from Haikou. Apparently, this incident was quite a huge event for Hainan as quite a lot of people were aware of it.
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As an after thought, have you ever considered retiring to Taiwan?
It is not as crowded as the big cities in China, but has a lot of modern amenities and conveniences. It is not as polluted too, the people are friendly and service standards are pretty good. Property outside greater Taipei isn't too expensive either.
