China (Xinhua): China’s Hainan Free Trade Port (FTP) has entered the final month before launching island-wide special customs operations on Dec 18 a major milestone in China’s high-level opening-up drive despite rising global protectionism.
The new customs model will expand zero-tariff coverage in Hainan from 21% to 74%, significantly lowering trade costs and further opening sectors such as tourism, modern services, and high technology.
According to Cai Ping of the National Development and Reform Commission, the reform signals China’s unwavering commitment to wider and deeper opening-up.
Hainan, China’s largest special economic zone and a key testing ground for institutional reform, has been steadily building its free-trade framework since 2018. The upcoming reform will implement a system of “freer access at the first line, regulated access at the second line, and free flows within the island,” enabling easier entry for overseas goods and maintaining standard customs control for flows to the mainland.
The shift will raise Hainan’s tariff-free items from about 1,900 to 6,600 and simplify clearance procedures, strengthening the island’s competitiveness as a low-cost, high-efficiency trade hub. Preferential tax policies will also continue to attract global investment, particularly in high-value sectors.
Economists say the reform will deepen Hainan’s integration into global value chains and position it as a new gateway for China’s reform and opening-up.Investor confidence is already rising. In the past five years, Hainan has attracted 102.5 billion yuan in actual foreign investment, drawing companies from 176 countries and regions. Canadian firm Green Chocolate Works, an early entrant, has expanded rapidly thanks to the FTP’s tax incentives and zero-tariff policies, reinvesting savings into innovation and planning new global distribution hubs centered in Hainan.
The island’s trade volume reached 277.65 billion yuan in 2024 up 20% year on year and nearly triple 2020 levels. Analysts say the new customs system will further enhance regional cooperation, with ASEAN businesses expected to benefit from Hainan’s tariff-free imports and competitive tax regime.
Experts from Malaysia and the United Nations note that the Hainan FTP’s transparent, predictable framework will support inclusive growth, spur innovation, create jobs and deepen regional economic integration.