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Hainan will make investors wealthy by abolishing customs duties — media

The province has reduced importers' costs by $287 million over the last year and a half, according to Hainan Daily

HAIKOU /China/, August 22. /TASS/. Hainan will significantly reduce costs for investors in the next few years by abolishing customs duties and reducing the tax burden on business. The Hainan Daily newspaper reported that China's southernmost province will make companies registered on the island "golden."

"Abolishing customs duties is an extremely important systemic measure for the development of Hainan's free trade port," said an editorial on Hainan's strategy for transitioning to a new offshore model by 2025. "Freeing up existing potential will help make interested companies wealthy."

The authors cite data from Hainan Customs, according to which, eliminating tariffs on a wide range of products for manufacturing purposes, allowed the province to reduce importers' costs by 1.96 billion yuan ($287 million at current exchange rates) over the past year and a half. "As foreign trade restrictions ease, there will be new incentives for industry development," they state. "Hainan's zero-tariff policy has already 'put down roots' and more drastic measures will follow in the future."

The publication notes that provincial authorities launched a new customs mechanism in December 2020, which gradually exempted from duties imported semi-finished products and raw materials intended for production. Similar measures were extended to ships, aircraft and vehicles used for tourism and transportation and logistics projects in Hainan. The policy has also been extremely beneficial for companies operating in the entertainment industry, as they have been able to import a wide range of specialized goods and equipment from abroad, free of tariffs and tax charges.


"In the next three years, Hainan should force measures to form a free trade port. We need to ensure the widest possible coverage to adapt to the new offshore model in order for our region to undergo the necessary stress test," the newspaper quotes expert Xia Feng of the School of Marxism of Xiamen University as saying.

In January 2021, the Hainan administration announced that by 2025 local customs offices would cease to operate in their current mode. According to the Communist Party committee secretary of Hainan province, Shen Xiaoming, all the necessary conditions will be in place by 2023, and the authorities then plan to agree on the secondary details of the new mechanism within two years. In about three years, island residents will be recognized as residents of an offshore territory with a special legal status different from other citizens of mainland China.