(Hainan Broadcasting Station ) –The Hainan Free Trade Port (FTP) officially launches the island-wide special customs operations today, a move that establishes the island as the world’s largest free-trade zone by area.
Located in southern China, Hainan is a tropical island province that serves as a key hub linking the Pacific and Indian Oceans. In April 2018, the Chinese government announced support for developing the entire island into a pilot free trade zone, with the long-term goal of gradually building it into a free trade port with distinctive Chinese characteristics.
The launch of the island-wide special customs operations is viewed as a landmark project under this major national strategy. It represents a key step for China in advancing high-standard opening-up and fostering an open world economy.
According to Cui Fan, Chief Expert of the China Society for World Trade Organization Studies, this arrangement marks a “critical leap” for Hainan in its pursuit of the highest level of openness. Its core significance, Cui noted, lies in the initial establishment of a policy and institutional framework facilitating free flows of trade and investment. He described this as a substantive shift toward “institutional openness,” one that will make the business environment more stable and predictable.
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Following the official launch of this island-wide special customs operations, Hainan will implement a special supervision system characterized by “freer access at the first line, regulated access at the second line, and free flows within the island.”
The “freer access at the first line” allows goods from countries and regions outside the Chinese customs territory to enter Hainan under a range of free and convenient entry and exit measures. Under this arrangement, the vast majority of imported goods will enjoy “zero-tariffs,” and customs procedures will be significantly streamlined.
The “regulated access at the second line” refers to implementing precise regulatory controls over goods entering from the “first line” to the Chinese mainland.
“Free flows within the island” allows zero-tariff goods and their processed derivatives to circulate freely among eligible entities on the island without incurring additional import tariffs.
Cui emphasized that the Hainan FTP shoulders the historic mission of piloting high-standard international rules for the country.
The “Chinese solution” emerging from this exploration aims to align with international rules, and ultimately participate in leading their formulation, thereby driving higher-level opening-up across the country.
With the official launch of the island-wide special customs operations, the policy dividends of the Hainan FTP are now in full effect. The much-anticipated zero-tariff policy has undergone a fundamental upgrade, with the coverage of eligible product categories expanding significantly to approximately 74%. This means the vast majority of imported goods can enter Hainan duty-free and circulate freely among island-based enterprises.
Concurrently, the supporting Processing Value-Added Exemption policy has been optimized. Goods produced by encouraged industries using imported materials that achieve over 30% value-added processing within Hainan can enter the mainland market exempt from import tariffs. These policies are expected to catalyze the clustering of high value-added industries, such as high-end manufacturing and biomedicine, on the island.
Josef Gregory Mahoney, a professor at the School of Politics and International Relations at East China Normal University, believes that Hainan will become the world’s largest free trade port. He said it creates unique and unparalleled opportunities for investment, growth, and development, and that its ongoing and future opening-up will generate even greater opportunities, both regionally and globally.
By Lin Shuaichen