Hainan Free Trade Port: Key Facts About the Island-Wide Customs Closure

1. What is "Customs Closure"?

• Definition: Hainan will become a special customs supervision zone under the principle of "First Line Open, Second Line Controlled, Island-Wide Freedom".

• First Line (Open): Free movement of goods, capital, and personnel between Hainan and global markets.

• Second Line (Controlled): Strict customs checks for goods entering mainland China from Hainan.

• Island-Wide Freedom: Unrestricted flow of goods and capital within Hainan.

• Not an Island Lockdown:

• No extra travel documents required for visitors.

• Aims to boost global trade integration while maintaining domestic security.

2. Key Policy Changes ("Four More")

1. More Preferential "Zero-Tariff" Policy

• Goods processed in Hainan with 30%+ added value can enter mainland China tariff-free.

• Zero-tariff goods can circulate freely among businesses in Hainan (no longer restricted to self-use).

• Tax Coverage Expands: From 21% to 74% of all imported goods (6,600 tax items).

• New Benefits:

2. More Relaxed Trade Controls

• Fewer Restrictions: 60 categories of used machinery no longer need import licenses.

• Bonded Repairs Allowed: 38 product categories can undergo tax-free repairs (highest openness in China).

3. More Convenient Customs Clearance

• First Line: 8 international ports (e.g., Yangpu) allow direct clearance for most goods.

• Second Line: 10 checkpoints (e.g., Haikou New Seaport) streamline cargo flows to mainland China.

4. More Efficient Smart Supervision

• AI + Big Data: Reduces customs checks for high-credit companies.

• Simplified Declarations: Export forms cut from 105 to 42 items.

3. Major Impacts

• For Businesses:

• Lower costs for import-dependent industries (e.g., biotech, EVs).

• Offshore Companies: Can use Hainan as a gateway to China and global markets.

• For Consumers:

• Cheaper luxury goods, electronics, and cars due to zero tariffs.

• Duty-Free Shopping: Annual quota remains ¥100,000 per person.

• For Tourism:

• 85 countries enjoy visa-free entry.

• No changes to travel procedures post-closure.

4. Preparation Status

• Policies Ready: Tax rules, negative lists, and processing policies finalized.

• Infrastructure Complete:

• Customs facilities passed national inspection.

• Smart systems (e.g., "Single Window" for trade) operational.

• Pressure Testing Underway: Simulating full-scale operations to ensure smooth transition.

5. Long-Term Vision

• Global Hub: Aims to rival Hong Kong/Singapore as a free trade zone.

• Economic Growth: Expected to boost Hainan’s GDP by 20%+ by 2030.

Key Dates:

• December 18, 2025: Official launch (symbolically aligns with China’s 1978 reform anniversary).

Sources: National Development and Reform Commission, Ministry of Finance, Hainan Government.