China launches Island-wide special customs operations in Hainan free trade port

HAIKOU: China rolled out island-wide special customs operations in the Hainan Free Trade Port (FTP), marking a major step toward deeper free trade and high-standard opening-up, despite rising global protectionism.

Under the new framework, Hainan—covering more than 30,000 square kilometers—has been designated a special customs supervision zone.

The move enables freer entry of overseas goods, significantly expands zero-tariff coverage, and introduces more business-friendly policies, signaling a new phase in the development of the world’s largest free trade port by area. The system operates on the principle of “freer access at the first line,” facilitating trade between Hainan and regions outside China’s customs borders, and “regulated access at the second line,” which applies standard customs procedures for goods entering the Chinese mainland.

As part of the reform, the share of zero-tariff products has risen sharply from 21 percent to 74 percent, with the eligible product list expanding from 1,900 to more than 6,600 items. Goods processed in Hainan can be sold to the mainland duty-free, provided local processing adds at least 30 percent in value.

Officials say the new customs regime will offer foreign enterprises a business environment more closely aligned with international standards, lower tax and production costs, and broader access to service sectors such as healthcare and education. Hainan is also expected to serve as a gateway for companies seeking to enter the vast Chinese mainland market.

Chi Fulin, president of the China Institute for Reform and Development, described the move as a clear demonstration of China’s commitment to institutional opening-up. “It reflects China’s determination to advance reform through higher-level openness,” he said. Once a relatively underdeveloped frontier region, Hainan was designated China’s largest special economic zone in 1988. A master plan released in 2020 set the goal of transforming the island into a globally influential, high-level free trade port by the middle of the century. Since then, more than 9,600 foreign-invested enterprises have been established in the province, according to official data.