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China's Hainan Free Trade Port (FTP) will officially launch an island-wide independent customs operation on Dec. 18, 2025.

"The island-wide independent customs operation is a flagship move for the development of the Hainan FTP and a key measure to further expand opening-up," Wang Changlin, deputy head of the National Development and Reform Commission, said at a press conference, calling it "a milestone" in China's opening-up efforts.

The proportion of tariff lines with zero-tariff products in the Hainan Free Trade Port will increase from 21 percent to 74 percent, Wang said, adding that imported products that undergo at least 30 percent value-added processing in Hainan can enter the mainland tariff-free. Certain goods currently banned or restricted nationwide will enjoy open policies in Hainan.

Consumer Transformation: Duty-Free Policy Fuels Economic Boom

The clarity on customs clearance provides a significant boost to Hainan's tourism and consumer market. Visitors to Hainan will not require additional documentation, maintaining the current ease of travel.

Hainan's tourism sector has already seen remarkable growth, with 97.21 million tourists in 2024, an 8% increase year-on-year, setting a new record. Total tourist spending reached 204.01 billion yuan, up 12.5%, with per capita spending leading the nation at 2,099 yuan.

A major turning point for Hainan's consumption came in 2020 with the implementation of the "General Plan for the Construction of Hainan Free Trade Port." This plan significantly raised the offshore duty-free shopping quota from 30,000 yuan to 100,000 yuan per person per year and expanded the variety of duty-free goods. By March of this year, Hainan's cumulative offshore duty-free sales had exceeded 250 billion yuan, with 45 million shoppers.

Hainan is actively working to enhance the convenience of duty-free shopping by introducing new delivery options like "mail delivery," "immediate pickup," and "guaranteed pickup." The goal is to solidify Hainan's reputation as a "golden brand" for duty-free shopping, offering Chinese consumers more cost-effective options and attracting high-end consumption back to the country. Furthermore, based on the "zero-tariff, low-tax rate, and simplified tax system" principle, the Ministry of Finance of China stated that tax system reforms will continue after full customs clearance to establish an internationally competitive tax system for the Hainan FTP.

File photo/NBD

Industrial Upgrades: Strategic Shift Towards New Productive Forces

Hainan has undergone a significant industrial restructuring, making a "courageous decision" to move away from its heavy reliance on the real estate sector, which once accounted for over 50% of its investment and tax revenue. In 2018, the province implemented the strictest property purchase restrictions in its history.

Instead of following the traditional path of "re-export trade and processing trade," Hainan has identified four leading industries based on its unique advantages and future trends: tourism, modern services, high-tech industries, and tropical high-efficiency agriculture. These four sectors currently contribute 67% to Hainan's GDP, an increase of 13.7 percentage points over the past five years. Full customs clearance is expected to further facilitate the aggregation of global elements and allocation of global resources, boosting industrial development.

Hainan's unique climate, oceanic depth, geographical latitude, and ecological advantages, coupled with the FTP's open policies, provide a strong foundation for cultivating and developing new productive forces. This includes a strategic shift towards marine, aerospace, and digital industries. Notably, Hainan successfully completed the first launch mission from its commercial aerospace launch site last November, marking a significant step in its "strength towards the sky" initiative. Hainan's low latitude, ample sea access, and convenient maritime transport make it an ideal location for heavy and reusable rockets. The FTP's policy advantages are crucial in attracting domestic and international enterprises to build an industrial ecosystem encompassing rocket, satellite, and data chains.

File photo/NBD

Optimized Business Environment: Cultivating Policy Dividends Through Reform

Hainan's strategic location, with a 4-hour flight radius covering 21 Asian countries and regions (approximately 47% of the global population and 30% of global GDP), positions it as a natural "open frontier." To align with the world's highest standards of openness, Hainan has focused on institutional integration and innovation, aiming to truly connect with international high-standard economic and trade rules.

Over the past seven years, Hainan has actively reshaped its internal environment, continuously optimizing its business climate. Hainan has also sent cadres to study in other free trade zones and welcomed experienced officials to the island.

Since 2018, Hainan has attracted 851,000 talented individuals through its "Million Talents into Hainan" initiative. This has significantly boosted the province's outward-oriented economy, with actual utilization of foreign capital from 2020 to 2024 exceeding the total of the first 32 years since the province was established. The total import and export value of goods trade has also seen an average annual growth rate of over 30%. 

Hainan's commitment to reform under the rule of law is designed to fully harness the "traffic" and "prosperity" that come with being a free trade port. As repeatedly emphasized by Chi Fulin, President of the Hainan-based China Institute for Reform and Development, the "big article" of the Hainan Free Trade Port "cannot be made small, and the long article cannot be made short."