Shenwan Hongyuan Securities·2025-04-28 08:41Group 1 - The establishment of Hainan Free Trade Port is a significant strategic decision by the Chinese government to respond to global trade changes and enhance domestic consumption, especially in light of the U.S. imposing "reciprocal tariffs" [2][35] - The year 2025 marks a critical milestone for Hainan Free Trade Port as it aims to achieve "closure," allowing for a unique operational model where goods can flow freely between Hainan and international markets while being regulated for entry into mainland China [2][14] - Hainan is expected to become a "tax haven" due to four key policies: 1) Exemption from tariffs for products with over 30% value-added processing; 2) Zero tariffs on non-negative list goods post-closure; 3) A reduced corporate income tax rate of 15% for qualifying businesses; 4) A progressive personal income tax structure capped at 15% [2][28][30] Group 2 - Hainan is positioned as a dual circulation hub, leveraging its geographical advantages to attract global capital, particularly from foreign enterprises seeking access to the Chinese market [12][31] - The tourism sector is being developed to attract international visitors and promote high-end consumption, with initiatives like duty-free shopping and international medical tourism [41][46] - The report highlights the rapid growth of new enterprises in Hainan, with over 150,000 new companies established annually from 2020 to 2024, indicating a robust investment environment [33]