#China #Xi Jinping #Hainan #Hainan Free Trade Port #Customs Operations

Hainan Free Trade Port: A New Era in Trade and Investment

On December 18, 2025, a significant milestone in China's trade journey will unfold with the launch of island-wide special customs operations at the Hainan Free Trade Port (FTP). This initiative aims to catalyze high-level economic openness and enhance the flow of goods, services, and capital, reinforcing Hainan's strategic role in China's economic landscape.

The anticipation surrounding this transformation underscores the importance of Hainan FTP as a key gateway for international trade. Earlier this month, Chinese President Xi Jinping emphasized the special customs operations as a landmark move toward expanding high-standard global openness. This operation not only facilitates smoother trade but also aims to create a first-rate business environment that encourages investment and promotes institutional transparency.

In the countdown to the launch, the Hainan International Ship Registration Administration heralded a significant first—the bareboat charter registration of the Xiang Tai Kou, a semi-submersible vessel, which is now part of the Yangpu Port fleet. The vessel, chartered from Liberia, benefits from Hainan's innovative zero-tariff policies, resulting in substantial savings exceeding 10 million yuan (approximately $1.4 million) in import tariffs and value-added taxes. This case exemplifies the anticipated benefits businesses can expect from the FTP's new customs framework.

Upon launching the special customs operations, Hainan will introduce a dual-tiered customs supervision model. The first tier allows for freer access across Hainan's border with overseas regions, while the second tier maintains regulated access to the mainland. Wang Changlin, the deputy head of the National Development and Reform Commission, noted that the proportion of zero-tariff products will dramatically expand from 21% to 74% within the FTP. Imported goods that undergo at least 30% value-added processing in Hainan will enter the mainland without tariffs, inviting a new wave of international investments.

The establishment of eight first-tier entry ports will streamline import clearance processes, supporting the influx of qualified goods. Additionally, as travel facilitation plans emerge, Hainan is prepared to expand its visa-free entry policies for travelers from 85 countries, aiming to introduce more flexible regulations that attract tourism and business.

Beyond trade, Hainan is also launching a pilot negative list for cross-border service trade—aiming to grant foreign investors national treatment in crucial sectors such as finance, healthcare, and education. Such reforms signify Hainan's role as a testing ground for broader economic reforms, aimed at transforming the region into an open hub for foreign enterprise and investment.

Infrastructure upgrades at Yangpu Port are already in progress to improve service efficiency, with the addition of new 200,000-tonne berths and an expansion of the existing shipping routes. These enhancements are poised to bolster Hainan's connectivity to global markets, strengthening the port's role as a logistics hub for expedited trade.

Economists, including Li Daokui from Tsinghua University, predict that China's upcoming market opening will herald one of its most significant economic reforms, with Hainan at the forefront. With its unique blend of strategic geographical advantages and innovative policies, the Hainan Free Trade Port stands as a testament to China's commitment to enhancing its trade landscape.

As we approach this transformative date, the world watches closely. The establishment of the FTP may well pave the way for a new chapter of economic cooperation, contributing significantly to China's global standing in international trade and investment.