China turns Hainan Island into special customs supervision zone

Core Points - China has launched island-wide special customs operations in the Hainan Free Trade Port (FTP), enhancing free trade and business-friendly measures [1][3] - The Hainan FTP is now designated as a special customs supervision zone, marking a significant development in its evolution [3][4] - The share of zero-tariff products in the Hainan FTP has increased from 21% to 74%, expanding the list of zero-tariff items from 1,900 to over 6,600 [5][6] Summary by Sections Free Trade and Business Environment - The new customs arrangements allow foreign companies to benefit from a business environment aligned with international standards, lower tax and production costs, and broader access to service sectors [4] - Hainan is positioned as a platform for foreign companies to access the vast Chinese mainland market [4] Customs Operations - The special customs system includes "freer access at the first line" for trade between Hainan and areas outside China's customs borders, and "regulated access at the second line" for goods moving from Hainan to the mainland [5] - Zero-tariff goods processed in Hainan can be sold to the mainland duty-free if local processing adds 30% or more in value [6] Historical Context and Development Goals - Hainan has evolved from an underdeveloped frontier outpost to China's largest special economic zone since 1988, with over 9,600 foreign-invested enterprises established since 2020 [7] - The launch date of December 18 aligns with the anniversary of a significant CPC meeting in 1978, marking the beginning of China's reform and opening-up era [8]