The Free Trade Port in south China’s Hainan Province is speeding up preparation for its full independent customs operation in 2025, as the island province is gearing up to facilitate greater opening-up to the world for economic growths, said a deputy to the 14th National People’s Congress (NPC), China’s top legislature, on Saturday.
Speaking during a group interview shortly before the convening of the second plenary meeting of the third session of the 14th NPC in Beijing, Cai Qiang, an NPC deputy, briefed the media about the latest achievements made during the construction of the Hainan Free Trade Port.
“In 2025, the Hainan Free Trade Port will begin its independent customs operation. The so-called ‘independent customs operation’ means transforming Hainan into a special customs supervision zone. This is not about closing off, but rather about opening up to the world even more. It’s about achieving liberalization and facilitation of trade and investment,” said Cai Qiang, who is also the deputy director of the Office of the Hainan Free Trade Port Working Committee.
According to a government work report presented at the annual session of the Hainan Provincial People’s Congress, which opened in mid-January, Hainan plans to introduce key policies this year, including a catalog of taxable imported goods, a list of prohibited and restricted items for import and export and customs supervision regulations.
“Hainan’s duty-free shopping policy for departing visitors has added new pickup methods which are ‘organization-guaranteed’ and ‘deposit-guaranteed.’ For goods that are applicable under these methods, people can purchase them at duty-free shops and take them immediately. People can consume and use [duty-free products] during their stay in Hainan, without having to wait until their departure from the island like before. In recent years, with the advancement of the Free Trade Port’s construction, a number of shipping companies, such as the COSCO Shipping (a Chinese international container transportation and shipping company), have gathered here. This has sent Hainan’s gross tonnage of international transport ships to a historic second place in the nation,” said Cai.
Beyond the benefits for tourists, the Hainan Free Trade Port is offering major incentives for businesses. Cai said during his inspection and research tour to the Yangpu International Container Terminal, one company’s business has benefited from nearly 300 million yuan (about 41.5 million U.S. dollars) in corporate and personal income tax breaks in four years thanks to the favorable polices since the company relocated in Hainan.
He also said that three key “zero-tariff” lists have been introduced in Hainan, covering raw materials, self-use production equipment, and transportation tools, including yachts.
“After the independent customs operation takes place in the future, the range of goods eligible for a zero tariff will be greatly expanded. In terms of low tax rates, we have a series of policies, including a preferential tax rate of 15 percent for both corporate income tax and personal income tax. These policies will be further optimized and upgraded after the operation. Regarding the tax system, we are actively designing relevant reform plans,” said Cai.
China released a master plan in June 2020 to build Hainan into a globally influential, high-level free trade port by the middle of the century.
With the building of the Hainan Free Trade Port, the number of newly registered foreign trade companies in the province has surpassed 70,000 since June 2020, contributing significantly to the growth of Hainan’s foreign trade.
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