Core Viewpoint - The Hainan Free Trade Port will officially start its full island closure operation on December 18, marking a new phase in its development with a focus on liberalization and facilitation policies [1][2]. Group 1: Policy Framework - The overall plan for the Hainan Free Trade Port aims to establish a policy system focused on trade and investment freedom by 2025, with a more mature system by 2035 and a high-level free trade port by the mid-21st century [2]. - The tax system will be based on principles of zero tariffs, low tax rates, simplified tax systems, strong rule of law, and phased implementation [2]. Group 2: Zero Tariff Policy - The range of "zero tariff" goods will be managed through a negative list, expanding to 6,637 items, which accounts for approximately 74% of all goods, covering most products needed for production, processing, and research [3]. - Goods imported under the "zero tariff" policy will be exempt from import tariffs, VAT, and consumption tax, with specific provisions for goods processed in Hainan before entering the mainland [3][5]. Group 3: Scenarios for Zero Tariff Application - Four scenarios for applying the "zero tariff" policy include: 1. Importing equipment for self-use, saving 5-10% in import tariffs and 13% in VAT [4]. 2. Importing transportation tools and yachts, also exempt from import tariffs and VAT [4]. 3. Importing goods for processing, with exemptions if value-added exceeds 30% [5]. 4. Direct sales of imported goods, which can save on tariffs and VAT, particularly beneficial for capital-sensitive industries [5]. Group 4: Low Tax Rate Policy - Enterprises registered and operating substantively in Hainan can benefit from a reduced corporate income tax rate of 15%, with high-end and scarce talent enjoying personal income tax exemptions on amounts exceeding 15% [6]. - To qualify for the 15% corporate tax rate, companies must operate substantively in the free trade port and belong to encouraged industries, with at least 60% of their revenue coming from these main business activities [6][7].

Core Viewpoint - The full island closure marks a new starting point for the construction of Hainan Free Trade Port, with plans to further enhance its openness to the outside world [1] Group 1: Trade Management - Accelerate the establishment of a free, safe, and convenient trade management system, expanding the range of "zero tariff" goods and promoting the growth of goods trade [2] - Adapt to the service trade development requirements by accelerating the opening of sectors such as tourism, education, and healthcare, promoting both access and operation [2] Group 2: Investment Environment - Focus on creating an open, transparent, and predictable investment environment by further relaxing foreign investment access and implementing new measures to ease market entry [3] - Deepen the implementation of the commitment-based entry system reform and accelerate the establishment of an investment facilitation system focused on process regulation [3] Group 3: Financial Policies - Gradually establish financial policy systems that align with open development, improving the multi-functional free trade account system and expanding financial sector openness [4] - Actively explore pilot projects for cross-border asset management [4] Group 4: Immigration Policies - Implement more convenient entry and exit management policies by further relaxing restrictions on personnel movement and enhancing temporary entry policies for business personnel [5] - Improve work visa policies and residency systems [5] Group 5: Shipping System - Establish a more open shipping system by accelerating the construction of "China Yangpu Port" as a ship registration port and optimizing ship inspection management policies [6] - Further relax airspace control and air rights restrictions, actively promoting the opening of the seventh freedom of the air [6] Group 6: Data Flow Mechanism - Construct an efficient, convenient, and secure mechanism for cross-border data flow by expanding communication resources and business openings [7] - Adjust and improve the negative list for data exit management and accelerate the construction of international communication business entry and exit bureaus and cross-border submarine cable [7]

Core Viewpoint - The construction of Hainan Free Trade Port is a significant reform and opening-up initiative personally planned and promoted by President Xi Jinping, aiming to establish a world-class free trade port by December 2025 [1][2]. Group 1: Policy Framework - The full island closure operation is designed to expand openness and accelerate development, marking a new phase in Hainan's free trade port construction [2]. - The core policy of the free trade port includes a "zero tariff" system for imported goods, allowing independent legal entities registered in Hainan to import goods without tariffs, except for those on the tax list [3][4]. - The policy framework emphasizes a system where "one line" is open to the outside, "two lines" manage the internal market, and free movement is allowed within the island [2][3]. Group 2: Economic Impact - The "zero tariff" policy will significantly increase the range of goods eligible for tariff exemptions, expanding to approximately 6,600 tax items, which will lower enterprise costs and attract related industries to cluster in the free trade port [6][10]. - The trade facilitation measures will enhance the transparency and openness of Hainan's trade management, allowing for more efficient operations and better integration into global supply chains [6][10]. Group 3: Customs and Regulation - Customs will implement a classification management system at ten "two-line ports" to regulate the flow of goods and personnel between Hainan and the mainland, ensuring efficient and secure operations [5][11]. - The customs clearance process will be simplified for "zero tariff" goods, reducing the required data from 105 items to 33, thereby improving efficiency [7][11]. Group 4: Future Development - The next steps in tax reform will focus on attracting high-end talent and quality enterprises, adjusting the import tax list, and optimizing the duty-free shopping policy for residents [10]. - The overall goal is to create a high-quality development model that balances openness and security, ensuring that Hainan Free Trade Port becomes a leading gateway for China's new era of opening up [9][11].

Core Viewpoint - The new "Goods Circulation Tax Policy" significantly enhances the existing "zero tariff" policy in Hainan Free Trade Port, expanding the scope of zero-tariff goods and broadening the range of beneficiaries. Group 1: Key Highlights of the New Policy - The coverage of "zero tariff" goods will increase substantially, expanding from 1,900 tax items to approximately 6,600 tax items, which accounts for about 74% of all tax items, representing an increase of nearly 53 percentage points compared to the previous policy [2]. - The range of beneficiaries will also expand, allowing various enterprises, institutions, and non-profit organizations with actual import needs across the island to benefit from the zero-tariff policy, as opposed to only independent legal entities previously [2]. - The restrictions on the policy will be further relaxed, allowing zero-tariff goods and their processed products to circulate freely among beneficiaries without the need to pay import taxes, which is expected to enhance the competitiveness of the industry and promote the formation of industrial clusters [2].

Core Points - Hainan's customs closure is a significant step in the construction of the Hainan Free Trade Port, aimed at further expanding China's openness [1][12] - The closure will transform Hainan into a "domestic outside" area, allowing for freer movement of goods, capital, and personnel while maintaining some regulatory controls with the mainland [3][5] Summary by Sections Customs Closure Concept - The term "customs closure" refers to establishing Hainan as a unique area with specific rules, allowing for open international trade while regulating connections with the mainland [3][5] - The core principle involves "one line open, two lines controlled, and free movement within the island," facilitating international connections while managing trade with the mainland [3][5] Preparation for Closure - The preparation for Hainan's customs closure began in 2018, with a formal plan announced in June 2020 to initiate operations by 2025 [5][6] - By March 2023, extensive preparations were underway, including 64 tasks, 31 construction projects, and 27 pressure tests [5][6] Benefits for Residents - The customs closure will create a "zero tariff" policy for certain imported goods, turning Hainan into a significant shopping destination for residents [6][7] - Enhanced access to high-quality services in education, healthcare, and tourism will improve the living standards for residents [7][9] Employment Opportunities - The closure is expected to attract businesses, leading to job creation, but will also require residents to enhance their skills to meet new demands [9][10] - Increased business activity will likely boost public service funding, improving overall living conditions [9][10] Tourist Appeal - Hainan's tourism sector will benefit from increased international flights and diverse tourism offerings, enhancing the overall visitor experience [10][11] - Tourists may also enjoy some shopping benefits, although not as extensive as those for residents [10][11] Business Opportunities - The customs closure will significantly reduce import costs for businesses, with a projected increase in zero-tariff items to 74% [11] - A clear regulatory framework will encourage business operations, allowing for greater flexibility and resource allocation [11][12] Overall Impact - Hainan's customs closure represents a transformative milestone, positioning the region as a global trade hub and enhancing China's international trade profile [12] - The initiative is expected to yield tangible benefits for residents, tourists, and businesses, contributing to a more open and competitive economic environment [12]