On November 17, three lists were issued by China’s southern province of Hainan in order to help local foreign trade and value-added manufacturing businesses enjoy the advantages of the Regional Comprehensive Economic Partnership (RCEP) agreement and the zero-tariff policies that have been passed as part of the development of the Hainan Free Trade Port.
In the master plan for the Hainan Free Trade Port, released on June 1, 2020, China outlined plans to develop the province into a “globally influential, high-level free trade port”.
After cross-referencing the tariff rate terms stated in the RCEP agreement and other regional trade agreements, two lists were formulated by local authorities, itemizing around 250 types of import commodities and around 700 types of export commodities that are eligible for lower tariffs under the RCEP agreement. These include electromechanical products, chemical products, textiles, pharmaceuticals & medical equipment, and products from other industries with close economic ties to the pillar industries of the island of Hainan.
After cross-referencing the tariff rate terms stated in Hainan’s zero-tariff policies and the RCEP agreement, a third list was formulated to include over 1,600 types of import commodities which qualify for lower tariffs under Hainan’s zero-tariff policies, ranging from raw & auxiliary materials, transport vehicles, and production equipment.
Businesses now can download the three lists mentioned above from the RCEP column on the official website of the Hainan Provincial Department of Commerce (dofcom.hainan.gov.cn) and Hainan Provincial Bureau of International Economic Development (investhainan.cn).
According to an official from Hainan’s Department of Commerce, the three lists are designed to provide local businesses with a quick and easy way to sort through the extensive provisions outlined in the regional trade agreements, RCEP agreement, and the zero-tariff policies of Hainan, as well as boost the development of the foreign trade industry on the island.
Since the RCEP agreement came into effect across the country at the beginning of this year, Hainan has been working to help local businesses benefit in a variety of ways, including setting up an online RCEP service platform and putting together online columns explaining RCEP policies, issuing an RCEP Q&A manual and tariffs reference guidebook, establishing a service center office for member countries, and more. As the development of the Hainan Free Trade Port continues to gain steam, cooperation in trade and investment between the tropical island province and RCEP member countries has demonstrated huge potential and achieved win-win results for all.
For the first three quarters of the year, foreign trade of goods between Hainan and RCEP member countries topped 51.44 billion yuan (about $7.21 billion), accounting for more than one-third of the total foreign trade volume in the province. Hainan’s foreign trade growth rate is holding steady at 24.2% over the previous year, which is 16.2% higher than the national average. Over 30 local companies have set up subsidiaries in RCEP member countries (up 72.2% year on year), with a total investment of $383 million (up 117.6% year on year).
Meanwhile, due to tax reductions, exemptions, and other beneficial policies, a growing number of leading companies from RCEP member countries have set up subsidiaries in Hainan, including the Singaporean Raffles Medical Group, Wilmar International, Golden International Holdings, the Mitsubishi Corporation, ROHTO Pharmaceutical, South Korean BioPlus, the Charoen Pokphand Group, and many more.