Infographic: How special customs operations in Hainan FTP expand global trade opportunities

(Pictures generated by AI)

Hainan Free Trade Port (FTP) launched island-wide special customs operations on December 18, marking a landmark move in China’s efforts to expand high-level opening-up and promote an open global economy. Following the launch, Hainan will operate as a special customs supervision zone, implementing a liberalized and facilitative policy framework characterized by “freer access at the first line, regulated access at the second line and free flow within the island.”

The new system is expected to bring significant cost advantages for manufacturing enterprises that rely heavily on imported equipment and raw materials. After the launch, the scope of zero-tariff goods expanded from more than 1,900 to 6,600 tariff lines, covering 74% of all items. Eligibility has been extended to enterprises and institutions across the island, with zero-tariff goods and their processed products allowed to circulate freely among eligible entities. Policies on tax exemptions for value-added processing have been further optimized, making trade more open and logistics more efficient.

Under the policy, Zero-tariff goods processed in Hainan may be sold to the mainland duty-free if their local processing generated an added value of 30 percent or more. The policy is expected to help reduce business costs, attract high-end manufacturing and high-value-added processing industries, and strengthen high-tech industrial chains.

In addition to zero-tariff policies, a preferential 15% income tax rate for both corporations and individuals has been implemented, with cumulative tax reductions and exemptions exceeding 31 billion yuan (about $4.3 billion) and 17 billion yuan, respectively. The policy is expected to boost corporate profits and increase take-home income for high-income professionals. After the launch, deeper integration of duty-free shopping with tourism, culture and entertainment is expected to create more jobs and support the growth of retail, tourism, manufacturing and cross-border e-commerce.

To "develop the Hainan Free Trade Port to high standards" is written into the Recommendations of the Central Committee of the CPC for Formulating the 15th Five-Year Plan for National Economic and Social Development, adopted at the fourth plenary session, said Lin Jian, a spokesperson for China’s Foreign Ministry on Tuesday. He expressed confidence that the Hainan FTP will become an important gateway of China’s high-level opening-up, adding that China’s door to the outside world will open wider, creating more development opportunities and injecting fresh momentum into global common prosperity.