The long-anticipated “customs closure” (封关) of the Hainan Free Trade Port has finally been confirmed. On 23 July, Wang Changlin, deputy head of the National Development and Reform Commission, announced at a press conference held by the State Council Information Office that Hainan will launch an island-wide independent customs operation on 18 December this year.
Almost 7 years in the making, following its announcement in 2018, the Hainan Free Trade Port will finally close its customs across the island. Its status will become “within the border but outside the customs” (境内关外). There will be two “lines” in Hainan: the first line, between Hainan and the rest of the world, will be open, while the second line, between Hainan and the rest of China, will be closed. Most people and goods will remain the same in and out of the island, with no new documents needed for travellers.
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After the customs closure, 74% of goods will be tariff-free, up from the current 21%. Products that are manufactured or assembled on the island and have over 30% of value added to imported materials can be sold to the rest of China without tariffs. Duty-free shopping will remain in place for visitors to meet diverse shopping needs. Residents of Hainan will also have the opportunity to buy duty-free imported goods. Hainan is working to become a global duty-free shopping centre, boosting tourism as well as trade.