Before it's recent and rapid expansion, Banhuan Dao was a small sleepy fishing village, located to the northwest of the New Revolutionary Republic of Beiyang. It's name is the Chinese phrase for "Half-Ring Island", due to the shape of island itself. At the center of the island sits a large dormant volcano, which is believed to have created the island during its eruption over 800 years ago.

Banhuan Dao first came into the spotlight when travel agencies realized that the large expansive beaches were perfect for tourism. Roughly the same time, the Beiyang People's Navy realized the location of Banhuan Dao was strategically very valuable. There were many debates, but ultimately the compromise is that the island will be divided for both civilian and military uses, with the navy allotted the northern half of the island while the southern half was set aside for tourism, residential districts, and other civilian uses.

Today, it serves as both a tourist destination and as a strategic base for the navy. It's current population of roughly 70,000 is expected to grow very quickly in the coming years, both due to military recruitment and economic development brought by tourism.