Core Viewpoint - The Hainan provincial government is actively promoting the implementation of the "Qiong-Hong Cooperation Memorandum" to enhance collaboration with Hong Kong, aiming to create a high-level open cooperation model that is globally oriented [1] Group 1: Strategic Initiatives - The provincial government emphasizes a proactive approach and bold exploration to quickly establish a new phase of Qiong-Hong cooperation, targeting significant achievements [1] - A pragmatic strategy focusing on "small breakthroughs" will be adopted, concentrating on key areas such as trade and investment facilitation, aiming for smooth alignment with international high-standard rules [1] Group 2: Development Areas - The government plans to accelerate the establishment of cooperation demonstration zones in Haikou and Sanya, enhancing collaboration in sectors like biomedicine, high-end consumer goods manufacturing, and retail [1] - There is a strong push for deep integration of industrial chains, supply chains, and value chains in advantageous sectors such as digital economy, financial openness, and tourism consumption [1] Group 3: Cooperation Mechanisms - The government aims to improve cooperation mechanisms, leveraging the window period before the Hainan Free Trade Port's closure operations to enhance work connectivity and cultural exchanges [1] - The exploration of more open and flexible policy measures is intended to achieve regular communication and collaboration between Qiong and Hong Kong, further deepening cooperation for mutual benefits [1]

Core Viewpoint - The official announcement of the Hainan Free Trade Port's full island closure operation starting December 18, 2025, marks a significant step in China's high-level opening-up strategy, showcasing the country's commitment to expanding its economic openness [1] Group 1: Policy Framework - The Hainan Free Trade Port will implement a policy system characterized by "one line open, two lines controlled, and island-wide freedom," which aims to create a more open economic system and serve as a testing ground for national reform and opening-up [1] - The "one line open" approach will feature zero tariffs for goods entering from outside China, while the "two lines controlled" mechanism will ensure precise management of goods entering the mainland to protect local markets [1] - The "island-wide freedom" policy allows for relatively free circulation of various factors within the island, enabling tax exemptions on imported goods traded among local enterprises [1] Group 2: Economic Impact - The zero-tariff negative list management covering 74% of product categories will facilitate low-cost global factor aggregation in Hainan, enhancing the inflow of global resources [2] - The policy allows for the free flow of people, logistics, capital, and data, with 85 countries' citizens enjoying visa-free entry and cross-border capital transfers being unrestricted [2] - The processing and value-added policies will enable Hainan to become a global processing hub, allowing for the transformation of raw materials into high-value products within a closed environment [2] Group 3: Trade and Investment Facilitation - The "two lines controlled" mechanism will categorize and regulate goods entering the mainland, allowing products with over 30% value-added to enter without import duties [3] - Hainan's strategic location as an RCEP hub will facilitate the processing of Southeast Asian raw materials for export to markets like Japan and South Korea, leveraging RCEP's preferential rules [4] - The establishment of a multi-functional free trade account system will support cross-border asset management, data flow, and RMB settlement, creating new channels for foreign trade and investment [4]

Core Viewpoint - The Hainan Free Trade Port will officially start its full island closure operation on December 18, 2025, marking a significant step in China's high-level opening-up strategy and showcasing the country's commitment to expanding its openness to the world [1] Group 1: Policy Framework - The operational framework of the Hainan Free Trade Port is characterized by a policy system of "one line open, two lines controlled, and island-wide freedom," which aims to provide a "testing ground" for a more open economic system in China [1] - The "one line open" policy will implement a series of zero-tariff measures for goods entering from outside China, while the "two lines controlled" policy will ensure precise management of goods entering the mainland to protect the local market [1] - The "island-wide freedom" policy allows for relatively free circulation of various factors within the island, enabling enterprises to trade zero-tariff goods without import taxes [1] Group 2: Economic Impact - The zero-tariff and processing value-added model will effectively enhance the quality and efficiency of foreign trade and investment in China, facilitating low-cost aggregation of global factors within the island [2] - The implementation of zero-tariff negative list management, covering 74% of product categories, will attract global factors to Hainan, with eight "one line" ports allowing eligible goods to be released [2] - The "island-wide freedom" circulation rules will create an efficient environment for value enhancement, allowing zero-tariff imported goods and their processed products to circulate freely among enterprises on the island [2] Group 3: Strategic Advantages - The "two lines controlled" mechanism will enable precise output of value-added goods and services from the island to the mainland, with customs implementing batch exports and centralized declarations for zero-tariff goods [3] - Hainan's geographical advantage as an RCEP hub will facilitate deep processing of raw materials from ASEAN countries, allowing for exports to Japan and South Korea while benefiting from RCEP origin rules [3] - The full island closure will open new channels for foreign trade and investment, supporting the construction of a new dual circulation development pattern in China [3]

Group 1 - The policy of "one line open, two lines controlled, and free within the island" will be officially implemented, significantly increasing the proportion of imported "zero tariff" goods from 21% to 74%, enhancing trade freedom between Hainan and foreign countries while maintaining efficient connectivity with the mainland [1] - Xingtong Co., Ltd. has proactively established a wholly-owned subsidiary, Xingtong Shipping (Hainan) Co., Ltd., in June 2022, with a registered capital of 250 million RMB, to capitalize on the Hainan Free Trade Port policy [1] - Xingtong Shipping (Hainan) primarily engages in international bulk liquid hazardous goods transportation and has established 10 wholly-owned subsidiaries in Singapore and Hong Kong, with a total registered capital of approximately 160 million RMB, forming a global operational network [1][2] Group 2 - Currently, Xingtong Shipping (Hainan) and its subsidiaries operate 8 chemical tankers with a total deadweight tonnage of 130,600 tons and a total investment of about 1.3 billion RMB, focusing on international liquid chemical transportation across various regions [2] - The company has established stable partnerships with key local enterprises in Hainan, such as China National Offshore Oil Corporation and Yisheng Dahu Chemical Co., Ltd., which lays a solid foundation for business expansion post-closure [2] - With the upcoming closure operation of Hainan Free Trade Port, the company anticipates increased shipping demand due to more international trade and investment, and plans to leverage its platform to enhance profitability and market share in the international shipping sector [2]

Report Summary 1. Report Industry Investment Rating - No information provided on the industry investment rating [N/A] 2. Core View of the Report - The stock indices closed higher today. The CSI 500 and CSI 1000 indices, after yesterday's adjustment, were relatively strong and hit new highs for the year. The trading volume in the two markets decreased slightly but remained at a relatively high level for the year. Affected by the news that Hainan Free Trade Port will start the full - island customs closure operation on December 18 this year, related concept sectors such as free trade zones and duty - free shops led the gains. In terms of futures basis, the basis of each variety contract increased today, and the open interest also increased, indicating that bulls entered the market. With the current news being relatively calm and the market sentiment remaining optimistic, it is expected that the stock indices will continue to operate strongly [6] 3. Summary by Relevant Catalogs Market Review - The stock indices closed higher today. Taking the CSI 300 index as an example, it closed up. In terms of capital, the trading volume in the two markets decreased by 1.9894 billion yuan. The stock index futures all rose with increased volume [4] Important Information - Approved by the Party Central Committee, Hainan Free Trade Port will start the full - island customs closure operation on December 18 this year. A series of policy measures will be implemented on the day of the full - island customs closure. Among them, the proportion of the tax items of "zero - tariff" goods imported from the "first line" will be increased from 21% to 74%. These goods can circulate within the island among beneficiaries without import tax, and those with a processing value - added of 30% can be sold to the Chinese mainland duty - free [5] Strategy Recommendation - Hold long positions and wait and see [7] Futures Market Observation | | IF | IH | IC | IM | | --- | --- | --- | --- | --- | | Main contract intraday change (%) | 0.76 | 0.50 | 1.72 | 1.84 | | Trading volume (10,000 lots) | 11.4133 | 5.3842 | 9.5468 | 20.5106 | | Trading volume change compared to the previous day (10,000 lots) | - 1.6976 | - 1.3034 | - 0.9753 | - 0.6634 | | Open interest (10,000 lots) | 27.1368 | 10.0891 | 22.9789 | 33.8313 | | Open interest change compared to the previous day (10,000 lots) | 0.2311 | 0.0135 | 0.1553 | 0.0035 | [7] Spot Market Observation | Name | Value | | --- | --- | | Shanghai Composite Index change (%) | 0.65 | | Shenzhen Component Index change (%) | 1.21 | | Ratio of rising to falling stocks | 4.80 | | Trading volume in the two markets (100 million yuan) | 18447.06 | | Trading volume change compared to the previous day (100 million yuan) | - 198.94 | [8]

Core Viewpoint - The official announcement of the full closure operation of Hainan Free Trade Port is set for December 18, 2025, marking a new phase in the port's development and a long-term task for continuous advancement [1][2]. Group 1: Full Closure Operation - The full closure operation is a significant milestone in the construction of Hainan Free Trade Port, aimed at further expanding openness and enhancing international connections [2]. - The closure will establish Hainan Island as a special customs supervision area, implementing a policy characterized by "one line open, one line controlled, and free flow within the island" [2][3]. - The closure is expected to facilitate the attraction of global quality resources and promote high-quality development of Hainan Free Trade Port [2]. Group 2: Policy Measures - The implementation of a more favorable "zero tariff" policy will increase the proportion of zero-tariff goods from 21% to 74% for imports from the "one line" [3]. - Trade management measures will be relaxed, allowing for open arrangements for certain previously prohibited or restricted imports [3]. - More convenient passage measures will be established, including the use of eight open ports as "one line" ports and ten "two line" ports for innovative passage measures [3]. Group 3: Trade Management and Transparency - The introduction of a "prohibited and restricted import and export goods list" aims to enhance the transparency of trade management [4][5]. - The list will allow for the relaxation of management measures on certain imported goods, significantly increasing the openness of trade [5]. - The list will also facilitate the import of old mechanical and electrical products, covering about 80% of those previously under import license management [5]. Group 4: Future Development Directions - The National Development and Reform Commission will continue to improve the policy system in line with high-level free trade port standards, focusing on trade management, investment environment, and financial policies [6][7]. - Measures will include expanding the range of zero-tariff goods, enhancing the investment environment, and establishing a more open shipping system [6][7]. - The development of a cross-border data flow mechanism will be prioritized, promoting the growth of the digital economy [7].

Core Viewpoint - The establishment of the Hainan Free Trade Port's closure date on December 18, 2025, marks a significant milestone in China's commitment to further opening up its economy and enhancing the attractiveness of Hainan as a global investment destination [1][3]. Group 1: Impact of Closure on Hainan Free Trade Port - The closure will transform Hainan into a "domestic outside" area, allowing for "zero tariffs" and other preferential policies, signaling China's determination for openness [3]. - The closure is a phased approach, maintaining the overall logic of "first line" opening, "second line" monitoring, and free internal systems [3]. - The customs will implement precise regulation with lower intervention, indicating a significant change in regulatory practices [3]. Group 2: Flow of Capital, Talent, and Data - Cross-border capital flow will rely on multi-functional free trade accounts, while talent movement will be facilitated by visa-free policies [4]. - Data flow will be managed through a list-based approach, allowing for cross-border interaction, enhancing the business environment for domestic and international entrepreneurs [4]. - The "zero tariff" and processing value-added tax exemption policies are expected to attract manufacturing industries, although Hainan may not be suitable for long industrial chains in the short term [4]. Group 3: Development of Key Industries - The four main industries in Hainan—tourism, modern services, high-tech industries, and tropical agriculture—account for 67% of the province's GDP [5]. - Hainan has advantages in deep-sea technology, particularly in deep-sea exploration, but should focus on local assembly and testing rather than the entire industrial chain [5]. - Hainan is better suited for specific high-tech industries like deep-sea technology and biomedicine, rather than long industrial chains [5]. Group 4: Expansion of Zero Tariff Products - The range of "zero tariff" products is expected to expand from 1,900 to approximately 6,600 items, covering about 74% of all product categories [6]. - Further expansion of the tariff list will depend on policy implementation and subsequent risk assessments, particularly in the service trade sector [6]. Group 5: Consumer Attraction and Market Expectations - The increase in "zero tariff" products is likely to boost consumer spending in Hainan, although high-end luxury goods will still be subject to offshore duty-free policies [7]. - The combination of offshore duty-free and "zero tariff" policies is expected to significantly enhance consumer activity in Hainan [7]. - There are expectations for greater initiatives in trade facilitation and the development of high-end services, including technology research, high-end healthcare, and modern finance [8].

Core Points - The full island closure operation is a landmark project for the construction of Hainan Free Trade Port, symbolizing a significant step towards further opening up the economy [1] - The closure is scheduled to officially start on December 18, 2025, coinciding with the anniversary of China's reform and opening-up policy, showcasing China's commitment to high-level openness [1][2] Group 1: Closure Operation Details - The closure refers to establishing Hainan Island as a special customs supervision area, implementing a policy characterized by "one line open, one line controlled, and free flow within the island" [2] - The "one line" open policy allows for free and convenient entry and exit between Hainan Free Trade Port and other countries, while the "two line" controlled policy manages the flow between Hainan and the mainland [2] - The closure will enhance Hainan's connectivity with the international market, facilitating the attraction of global quality resources and promoting high-quality development of the Hainan Free Trade Port [2] Group 2: Customs and Trade Management - After the closure, most goods and personnel will continue to be managed under current regulations, with minimal changes to the entry and exit processes [3] - For goods requiring inspection, measures will be implemented to ensure efficient customs clearance, including relocating certain inspections to avoid congestion [3] - The customs authority has developed a regulatory framework to ensure safe and efficient management of goods entering and exiting the Hainan Free Trade Port [3][4] Group 3: Tax Policy Changes - The "zero tariff" policy is a key feature of the Hainan Free Trade Port, with significant expansions planned for the range of goods eligible for this policy [5][6] - The number of "zero tariff" items will increase from 1,900 to approximately 6,600, covering about 74% of all goods, representing a nearly 53 percentage point increase [7] - The scope of beneficiaries will expand to include various enterprises and non-profit organizations with actual import needs, allowing for greater flexibility in the circulation of imported goods [7]

Group 1 - The implementation of new policies in Hainan Free Trade Port is expected to inject strong momentum into regional economic development and promote high-quality growth [1] - Hainan Mining Co., Ltd. is leveraging tax incentives and cross-border financial innovations to drive industrial upgrades and establish a new development pattern [1] - The existing capacity of Hainan Strait Shipping Co., Ltd. is sufficient to handle the expected increase in vehicle and passenger flow following the operation of Hainan Free Trade Port [1] Group 2 - Hainan Airport Facilities Co., Ltd. has formed a special team to conduct pressure tests, team building, and personnel training to enhance the standardization and efficiency of Hainan Free Trade Port's construction [2] - Caesar Travel Co., Ltd. has completed acquisitions to enrich its coastal boutique tourism business and accelerate market layout in Hainan [2]

Core Viewpoint - The Hainan Free Trade Port will officially start its closed operation on December 18, 2025, marking a significant milestone in China's efforts to expand its openness and implement liberalization policies [1] Group 1: Policy Implementation - The closed operation will feature a policy framework characterized by "one line" for openness, "two lines" for management, and free flow within the island [1] - The "zero tariff" policy for imported goods will increase from 21% to 74% of the tax categories, allowing for tax-free circulation among eligible entities within the island [2] - Trade management measures will be relaxed, allowing for open arrangements for certain previously restricted imports [2] - Ten "second-line" ports will be established to facilitate the passage of goods into the mainland, enhancing efficiency [2] - A precise regulatory model will be implemented to ensure low intervention and high efficiency for "zero tariff" goods [2] Group 2: Economic Development - The closed operation is expected to attract global resources and promote the development of key industries such as tourism, modern services, high-tech industries, and tropical agriculture [3] - The initiative aims to create a modern industrial system with unique advantages for Hainan, focusing on enhancing productivity and innovation [3] - The government plans to expand the scope of the "zero tariff" policy significantly, increasing the number of tax categories from 1,900 to approximately 6,600, covering 74% of all goods [4] - The policy will allow for free circulation of "zero tariff" goods among various entities, enhancing the competitiveness of local industries [4]