China's southernmost island province of Hainan will serve as a "duty-free mall" of the world under zero-tariff on global goods and capitals after independent operation of customs scheduled to begin at this year end, as part of its intensifying efforts to build itself into a free trade port (FTP). The policy, often colloquially termed "customs closure operation," will subject the 34,000-square-kilometer tropical island to distinct import and export regulations compared to the Chinese mainland.
The independent customs operations, a milestone in the construction of the Hainan FTP, have entered a critical sprint stage, according to local authorities. All 31 checkpoint facility projects required for the operations have been completed, laying a solid foundation for the efficient movement of goods, people, and other key factors.
At the ongoing Boao Forum for Asia (BFA) annual conference, participants underscored the significance of the Hainan FTP, as preparations accelerate for its independent customs operations, hailing the Hainan FTP as a prime example of China's higher-level opening up.
While goods and capital will flow freely into Hainan under a zero-tariff policy, movement of products from Hainan to the mainland will face standard customs checks and tariffs, though individuals retain a 100,000 yuan (13,800 U.S. dollars) annual duty-free quota, an expert said.
Residents in the mainland have raised questions over potential travel restrictions and consumer impacts. Authorities also clarified that the policy applies solely to goods, not people.
"The purpose of independent customs operations is to create conditions for free trade in goods. For example, the goods from various countries can be shipped to Hainan with duty free channel hence with lower cost. Apart from the free movement of goods, data flow will also be de-regulated in a structured and orderly manner. (For travelers from the mainland to Hainan) we only have regulations on the movement of goods, not people. This one is particularly clear, people are fully free to move around," said Chi Fulin, President of the Hainan-based China Institute for Reform and Development (CIRD) and President of the Hainan Institute for Free Trade Port Studies (HIFTPS).
Under the current visa policy, foreign nationals from 59 countries, including the United States, Russia, the UK and Japan, can enter Hainan without a visa for up to 30 days for purposes including tourism, business, medical visits, conferences, and sports events.
Hainan is China's first province to transform an entire island into a free trade port that serves as a testbed for the unrestricted flow of goods, services, capital and data.
As the world economy faces mounting uncertainty and rising protectionism, China is reaffirming its commitment to openness, with the Hainan FTP emerging as an important gateway driving the country's opening up in the new era.
China released a master plan in June 2020 to build Hainan into a globally influential, high-level free trade port by the middle of the century.
By the end of 2024, Hainan was home to 9,979 foreign-invested enterprises, 77.3 percent of which were established after June 2020, when China released its master plan for the Hainan FTP. The number of countries and regions investing in the province has grown from 43 in 2018 to 174 today.
Hainan FTP to be world's duty-free mall with independent customs
