Hainan Free Trade Port Officially Launches Full-island Customs Closure, Promoting The Construction Of An Open World Economy

On December 18, the Hainan Free Trade Port officially implemented full-island border control. This is a landmark move in China's unwavering commitment to expanding high-level opening-up and promoting the construction of an open world economy.

What changes will border control bring?

Simply put, after border control, Hainan will become an experimental zone open to the world. Once the entire island is under border control, a special customs supervision area will be established, implementing liberalized and convenient policies characterized by 'opening at the first line,' 'controlling at the second line,' and freedom within the island.

'Opening at the first line' means implementing special opening policies in the Hainan Free Trade Port, allowing people, capital, goods, and data from foreign countries and regions to enter Hainan more freely and conveniently. The boundary between Hainan and foreign countries and regions outside China's customs territory is the 'first line.'

'Controlling at the second line' means that the special policies of the Free Trade Port only apply within Hainan Island. If elements entering the Free Trade Port through the special opening policies need to move into the mainland, they must be managed according to mainland policies. The boundary between Hainan and the mainland is the 'second line.'

Gao Ruifeng, Secretary of the Party Committee and Director of Haikou Customs: Establishing a Free Trade Port involves certain special policies, and the tax policy is mainly embodied in the "zero-tariff" policy. We cannot directly implement this policy in the mainland; we can only relax controls once we are able to manage it properly.

Closing the port does not mean closing the island; it actually means further opening up. Against the backdrop of rising unilateralism and trade protectionism internationally, advancing the construction of the Hainan Free Trade Port to high standards is an important move for China to actively embrace economic globalization and promote the building of an open global economy.

This is not only a firm strategic choice but also clearly conveys to the world China's determination and confidence in steadily promoting high-level opening-up.

More relaxed trade management measures
More imported goods with "zero tariffs"

With the commencement of port closure operations, the Hainan Free Trade Port will enter a new stage of expanded high-level opening-up. What is new about this new stage? As we enter this new stage, what new tasks does the construction of the Hainan Free Trade Port face?

Wang Fengli, Deputy Director of the Hainan Provincial Party Committee's Deep Reform Office (Office of the Free Trade Port Working Committee), explained that the policy and institutional design, hardware facilities, and supervision models for port closure operations are all completely new.

After closing customs, Hainan's interactions with the international community have become smoother and more convenient, its connections with the mainland more efficient and convenient, and more policy benefits will continue to be released, such as more relaxed trade management measures. Some goods that are prohibited or restricted for import in the mainland can be imported into the Hainan Free Trade Port; the list of imported 'zero-tariff' goods will also become longer.

Wang Fengli: After closing customs, the number of duty-free product categories has expanded from 1,900 to more than 6,600, and the level of 'zero tariffs' has increased from 21% to 74%. Products with a processed value-added of over 30% sold to the mainland are also exempt from tariffs.

The '30% Value-added Tariff Exemption Policy' is a core policy of the Hainan Free Trade Port and one of the most valuable policies. This policy means that enterprises that meet the encouraged industry catalog of Hainan can use imported raw materials for processing in Hainan, and if the product's value-added exceeds 30% before being sold to the mainland, import duties can be exempted.

This policy can be combined with other preferential policies, which not only effectively reduces enterprise operating costs and enhances product competitiveness, but also helps Hainan cultivate industrial chains and clusters, attracting global high-end manufacturing to gather in Hainan.

Data shows that by November 2025, the cumulative domestic sales under the Hainan Free Trade Port's value-added tariff exemption policy reached 11.42 billion yuan, with tax exemptions totaling 878 million yuan. After closing customs, this policy will achieve further breakthroughs, including lowering the eligibility threshold for enterprises, expanding the range of imported materials, and optimizing the method of calculating value-added.

"Mutual Engagement" with Mainland Provinces

Play a leading role in promoting high-level opening-up

Advancing the construction of Hainan Free Trade Port to high standards is not only a key measure to promote Hainan's own high-quality development but also an important deployment to serve the overall national development strategy.

After closing customs, as a strategic hub connecting domestic and international dual circulation, Hainan must not only achieve its own high-level development but also fully leverage its hub function to collaboratively drive the development of other domestic regions.

In recent years, several mainland provinces have joined hands with Hainan to build cooperative parks, attracting a number of high-quality mainland enterprises to settle there. These companies not only help upgrade Hainan's industries but also leverage the policy advantages of the free trade port to successfully build a bridge to the international market.

As a batch of cross-provincial cooperative industrial parks are gradually completed, Hainan and mainland provinces are achieving a 'two-way connection.' Behind this intensive regional linkage is the country's expectation for Hainan: to play a guiding role in promoting high-level opening-up. After the customs closure operation, Hainan Free Trade Port's open advantages in connecting with the world will become even more prominent.

Benefiting ordinary people in sectors like healthcare

The benefits of Hainan Free Trade Port are not limited to trade and investment but genuinely benefit ordinary people, especially in essential areas such as healthcare.

Since the construction of Hainan Free Trade Port, international innovative drugs and medical devices that are not yet listed in China have been first introduced in the Boao Lecheng International Medical Tourism Pilot Zone, enabling many patients in need to receive treatment without going abroad.

The island-wide customs closure operation marks the beginning of a new stage in the opening and development of the Hainan Free Trade Port, and it is a task that requires long-term, continuous efforts. Going forward, taking the customs closure as an opportunity, we will actively promote the implementation and effectiveness of various policies, continuously improve the policy and institutional system of the free trade port according to the needs of Hainan's development, and accelerate the construction of a new system for an open economy. The Hainan Free Trade Port will surely forge a new path in openness and innovation, becoming an important gateway leading China's new era of opening-up.