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China Designates Hainan as Special Customs Zone – Thailand Business News
China launched special customs operations in Hainan Free Trade Port, expanding zero-tariff coverage and facilitating free trade. This marks a significant step in China’s high-standard opening-up efforts.
Key Points
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China launched special customs operations in Hainan Free Trade Port, enhancing free trade and expanding zero-tariff coverage. This move aligns Hainan’s business environment with international standards, lowers costs, and grants broader access to service sectors like healthcare and education.
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Hainan is designated a special customs supervision zone, enabling freer overseas trade and applying standard customs controls for mainland goods. Zero-tariff products increased from 21% to 74%.
- Since 2020, over 9,600 foreign firms have established in Hainan. This effort supports China’s high-level free trade goals and coincides with the anniversary of China’s reform era commencement.
In a strategic move to bolster free trade and counter global protectionist trends, China has launched a comprehensive special customs operation in the Hainan Free Trade Port (FTP), the world’s largest by area. This initiative, which highlights China’s dedication to high-standard economic openness, designates Hainan Island as a special customs supervision zone. This transformation facilitates freer entry of overseas goods, expands zero-tariff coverage, and implements measures to create a more business-friendly environment.
Under the new framework, foreign companies gain enhanced access to service sectors like healthcare and education, and benefit from reduced tax and production costs. This positions Hainan as a vital gateway for businesses aiming to engage with the expansive Chinese mainland market. The customs operation delineates “freer access at the first line,” allowing free trade with regions outside China’s customs borders, and “regulated access at the second line,” where standard customs controls apply for goods entering the mainland.
Significantly, the percentage of zero-tariff items has surged from 21% to 74%, widening the product list from 1,900 to over 6,600. Moreover, goods processed in Hainan with at least 30% added value can be sold to the mainland duty-free. These changes align with the island’s long-term blueprint, initiated in 2020, to become a globally prominent FTP by mid-century. Since then, Hainan has attracted over 9,600 foreign-invested enterprises.
The launch date, December 18, aligns with the anniversary of the pivotal 1978 CPC meeting, marking the era of reform and opening-up in China. Over the years, China has developed 22 pilot free trade zones, lifted manufacturing investment restrictions, and expanded market access in telecommunications, healthcare, and education. This landmark step in Hainan reflects China’s broader strategy to deepen economic integration and modernize its trade systems amid evolving global dynamics.
