The Hainan Free Trade Port is set to officially launch its island-wide special customs operations on December 18, 2025, marking a significant step in China’s push for high-level openness. This move is designed to facilitate smoother cross-border flows of goods, capital, and services, reinforcing Hainan’s role as a testing ground for economic reforms. The initiative follows years of preparation and aligns with national policies to create a more transparent and internationalized business environment.
Zero-Tariff Policies and Business Benefits
A recent example of the port’s advantages is the registration of the Xiang Tai Kou, China’s first zero-tariff bareboat-chartered import vessel, at Yangpu Port. Chartered from Liberia, the vessel benefits from exemptions on import tariffs and value-added tax, resulting in cost savings exceeding 10 million yuan. This case illustrates how the special customs operations are expected to reduce expenses for businesses and attract foreign investment, with Hainan having utilized over 102.5 billion yuan in actual foreign investment over the past five years.
Customs System and Regulatory Framework
The new customs model features a two-tiered system: freer access at the first line for trade with overseas regions and regulated access at the second line for goods entering mainland China. This structure aims to boost international trade while maintaining standard customs controls domestically. Officials have noted that the proportion of zero-tariff product lines in Hainan will increase from 21% to 74%, and imported goods with at least 30% value-added processing in Hainan can enter the mainland tariff-free. Additionally, certain nationally restricted goods will enjoy more open policies in the free trade port.
Infrastructure and Global Connectivity
Infrastructure upgrades are underway to support these changes, particularly at Yangpu Port, where new 200,000-tonne berths are being added and shipping routes expanded to improve cargo flow efficiency. Eight ports will serve as first-tier entry points for expedited clearance, while ten second-tier ports will manage mainland-bound goods. These efforts are part of broader initiatives to strengthen Hainan’s connectivity with global markets and enhance its appeal to international investors.
Broader Economic Implications
Economists and leaders, including President Xi Jinping, have emphasized that the Hainan Free Trade Port is central to China’s strategy for high-standard opening up and promoting an open world economy. The port also pilots a negative list for cross-border service trade, granting national treatment to foreign investors in sectors like finance, healthcare, and education. With visa-free entry already available for travelers from 85 countries, plans to expand eligibility and introduce flexible stay policies are expected to further boost Hainan’s integration into the global economy.
