Hainan FTP starts island-wide special customs operations: A new chapter in openness

China's Hainan Free Trade Port (FTP) officially begins island-wide special customs operations on Dec. 18, marking a major step toward higher-level opening-up.

Under the new customs system, the southern island province of Hainan will operate as a relatively independent customs zone featuring a special supervision model described as "freer access at the first line, regulated access at the second line, and free flows within the island."

The "first line" refers to Hainan's connection with overseas markets, while the "second line" refers to the customs boundary between Hainan and the mainland, according to relevant officials.

Chinese President Xi Jinping announced a decision by the CPC Central Committee to support developing of Hainan into a pilot free trade zone and support Hainan to gradually and steadily push ahead with the building of a free trade port with Chinese characteristics in April 2018 at a ceremony marking the 30th anniversary of the founding of Hainan Province and the Hainan Special Economic Zone.

The strategic goal of building the Hainan FTP is to make it a key gateway driving China's opening-up in the new era, Xi pointed out at a recent conference on the Hainan FTP.

The island-wide special customs operations represent a key institutional arrangement outlined in the overall plan for the building of the Hainan FTP, released by the central authorities in 2020.

It is an important step in the building of the Hainan FTP, according to Zhou Mi, deputy head of the Institute of American and Oceania Study of the Chinese Academy of International Trade and Economic Cooperation under China's Ministry of Commerce.

The step bears fundamental significance for attracting high-quality global resources to Hainan and supporting the province's innovation-driven development, Zhou said, noting that it will significantly boost market vitality.

Located at the crossroads of the Pacific and Indian oceans, and backed by China's vast domestic market, Hainan enjoys natural advantages in connecting global markets, particularly those in Southeast Asia.

Taking the island-wide special customs operations as an opportunity, Hainan is steadily expanding institutional opening-up, further promoting the free flow of goods and factors, establishing a more open talent mechanism, and deepening administrative reform, all aimed at advancing the high-quality development of the Hainan FTP.

Fullsing Internet Industrial Park in Haikou, capital of Hainan Province, now hosts more than 10,000 enterprises, with total revenue exceeding 160 billion yuan ($22.7 billion) in 2024, according to Wu Qingji, general manager of the industrial park.

The Hainan FTP's low tax rates, simplified tax systems and zero-tariff policies have significantly reduced operating costs for businesses, Wu said.

Duty-free consumption is also expected to benefit. Following the official launch of the island-wide special customs operations, the number of zero-tariff product categories will expand from around 1,900 to approximately 6,600, enabling more market players to benefit from the zero-tariff policy.

Feng Chonghan, deputy general manager of Sanya International Duty-Free Shopping Complex in Sanya, Hainan, said the new customs system would bring infinite possibilities to the shopping complex, by lowering procurement costs, enriching product offerings, and optimizing business models.

With the full rollout of preferential policies for the Hainan FTP and the comprehensive pilot zones for cross-border e-commerce across the island, companies engaging in cross-border e-commerce will see sharply reduced tax costs and greatly improved logistics efficiency, according to Li Mingtao, chief e-commerce expert of the China International Electronic Commerce Center.

Yangpu International Container Terminal in Danzhou, Hainan, has opened 59 domestic and international shipping routes, forming a network that connects both near and distant markets.

Haikou Meilan International Airport in Haikou has introduced streamlined cargo clearance procedures, cutting customs declaration times to as short as five minutes.

The special customs operations are also expected to accelerate talent and resource inflows.

Lin Guangming, chief planner of the management committee of Hainan's Yangpu Economic Development Zone, is one of the foreign professionals deeply involved in the building of the Hainan FTP.

He has witnessed how the Yangpu Economic Development Zone has gradually emerged as a model for the Hainan FTP.

"Over the past five years, we were 'laying the foundations,'" Lin said, noting that with the special customs operations officially in place, policy dividends will be released faster, attracting more international talent to Hainan.

In health care, visa-free entry policies and streamlined approval procedures have enabled deeper international cooperation, allowing the Haikou People's Hospital to collaborate with doctors in Australia and the United States, and helping more hospitals establish international medical centers and general practitioner-based health care systems.

As of November 2025, the Boao Lecheng International Medical Tourism Pilot Zone in Hainan had introduced more than 520 innovative medicines and medical devices and used them for the first time in China, benefiting over 200,000 patients, said Fu Zhu, deputy head of the pilot zone.

With special customs operations allowing "freer access at the first line," the pilot zone will enjoy better connections with the international market, Fu noted.

Following the launch of special customs operations, customs clearance for urgently needed imported medicines and medical devices for clinical use will become more efficient, Fu said.

Policies including more convenient entry and exit for personnel, visa-free entry for nationals of 86 countries, and a shortened approval process — taking as few as 15 days for foreign physicians to be allowed to practice in the Boao Lecheng International Medical Tourism Pilot Zone — will create unprecedentedly favorable conditions for international patients and top-tier medical professionals, according to Fu.

According to the overall plan for the building of the Hainan FTP, China aims to initially establish the free trade port policy and institutional system, which focuses on trade and investment liberalization and facilitation by 2025, develop the province into an economy with a new height of openness by 2035 and a high-level free trade port of global influence by the middle of the century.

Hainan is not only a gateway for China's opening-up and a testing ground for innovations in opening-up, but also a window through which the world can gain a better understanding of China's opening-up, said Chen Bo, a senior researcher at Hainan University.

As global challenges persist, the Hainan FTP offers new space for China and the international community to explore shared development opportunities and innovative pathways to development, Zhou said.