HAIKOU /China/, April 28. /TASS/. The Hainan administration plans to significantly expand duty-free trade and apply new tax incentives to stimulate the development of the regional free trade port. This was reported by China News Service, citing the proceedings of the Eighth Congress of the Communist Party of China in Hainan Province.
They noted that the region will move to a new offshore model in foreign trade in accordance with the set schedule, so the next five years will be a key stage in the transformation of the Hainan economy. In this regard, the government will continue to pursue a proactive policy to attract investors and stimulate the development of key industries, including by introducing new business incentives and improving the business atmosphere.
As stated at the congress, over the past five years China's southernmost region has been able to form a solid system and mechanisms that will allow Hainan to successfully pursue a focused and deliberate policy to deepen reform and increase openness in the long term. It is for this purpose that the province has implemented more than 150 important strategic projects aimed at enhancing the competitiveness of Hainan's free trade port over the above-mentioned period.
Measures to increase economic openness
Among the effective measures that have recently drawn international attention to Hainan are the introduction of a preferential income tax rate, the publication of a list of import products exempted from duty for production purposes. These and many other stimulating factors have enabled a marked increase in the number of market entities registered in the province. An increasing number of large Chinese and foreign companies have expressed their willingness to register their headquarters and regional offices on the island.
Local authorities noted that the process of increasing economic openness has been accompanied by improvements in mechanisms to ensure timely and comprehensive risk control. According to the congress materials, Hainan will promote the One Belt, One Road Initiative, actively participate in multilateral cooperation formats such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership consider relevant international standards, rules and regulations, strengthen business contacts with Association of Southeast Asian Nations members and implement major projects together with the special administrative regions of China - Hong Kong and Macao.
In January 2021, the Hainan administration announced that by 2025, local customs control offices will cease to operate in their current capacity. According to Shen Xiaoming, Secretary of the CPC Hainan Provincial Committee, all the necessary conditions will be in place by 2023, and the authorities are then planning to agree on the secondary details of the new mechanism within two years. In about three years, island residents will be categorized as offshore residents with a special legal status different from other mainland Chinese citizens.