Trucks exit a customs clearance area in Xinhai Harbour in Haikou, Hainan province, on Dec 10 during a trial. With prior registration, they are able to complete the inspection process quickly and board ferries to the mainland. LUO YUNFEI/CHINA NEWS SERVICE
The Hainan Free Trade Port begins its much-anticipated island-wide special customs operations on Thursday, marking a landmark move by China in expanding high-standard opening-up and promoting the development of a more open global economy.
The special customs operations, marked by significant tariff incentives and measures promoting free trade, will play a vital role in reinforcing economic globalization and strengthening China's ties with the major markets of the Regional Comprehensive Economic Partnership, international organizations, company executives and experts said.
Feng Fei, Party secretary of Hainan, said the province is working to build the Hainan FTP into a key gateway driving China's opening-up in the new era.
"Choosing Hainan means choosing opportunities. Investing in Hainan means investing in the future," Feng said.
Mohammed Al Zarooni, chairman of the World Free Zones Organization, said, "Hainan province's remarkable journey as China's flagship free trade port offers a real-time case study in innovation, institutional reform and global connectivity."
Hainan's pioneering role as a high-level free trade port and a dynamic hub for trade, sustainability and innovation, highlights China's growing leadership in global trade reform, sustainability and digital transformation, Zarooni added.
Starting from Thursday, all of Hainan Island operates as a special customs supervision zone.
Enterprises eligible for special preferential policies of the Hainan FTP will enjoy zero tariffs on certain goods imported from overseas into Hainan.
The scope of zero-tariff goods expands to some 6,600 tariff lines, covering about 74 percent of all tariff lines — an increase of nearly 53 percentage points compared with the level before the policy's implementation, according to the Ministry of Finance.
These goods can circulate freely among eligible entities within Hainan. If a minimum of 30 percent value-added processing takes place in Hainan, they will be exempt from tariffs when entering China's mainland.
Li Daokui, dean of the Institute for Chinese Economic Practice and Thinking at Tsinghua University, said, "The import tariff exemption policy for products processed in Hainan is crucial, as it significantly boosts Hainan's appeal to companies as a key manufacturing or processing hub for foreign goods to enter China's mainland."
Fang Aiqing, president of the China Council for International Investment Promotion, said the special customs operations feature more favorable zero-tariff policies for goods, relaxed trade management measures, convenient travel arrangements, and a more efficient and precise regulatory model.
"This is not only a Hainan model for China's special economic zones, but also a valuable contribution to global free trade port development," Fang said.
Chi Fulin, president of the China Institute for Reform and Development, said Hainan is located at the center of the region covering the countries involved in the RCEP, the largest free trade agreement in the world, and serves as China's representative to the Association of Southeast Asian Nations.
"Hainan can serve as a strategic conduit connecting China's vast domestic market with the large markets of the RCEP, with a particular focus on ASEAN," Chi said.
Jochen Knecht, CEO of the International Free Zone Authority in Dubai, which runs one of the largest free trade zones in the United Arab Emirates, said the Hainan FTP is a gateway to Southeast Asian markets in two aspects.
"It is an opportunity for Chinese companies to find other places to extend their reach, to explore new markets, but also for companies from all over the world to come to Hainan, using Hainan as a gateway into China," Knecht said.
Seeing the big opportunities ahead, foreign and Chinese companies are scrambling to invest in Hainan. DFS Group, a part of French multinational LVMH Group, and Shanghai-based Shenya Group will jointly build a mega luxury retail complex in Sanya, Hainan. The project is scheduled for completion next year.
Nan Cunhui, chairman of Chint Group, said: "Hainan is an ideal place for investment. We have established our overseas investment headquarters in the province and invested in clean energy projects, including photovoltaic and wind power stations in Haikou, Sanya and Danzhou.
"The exponential growth in clean power demand, driven by artificial intelligence and computing technologies, aligns with Hainan's low-carbon development goals," Nan said, pledging further investments in green hydrogen storage, zero-carbon industrial parks and smart city initiatives.
Contact the writers at masi@chinadaily.com.cn
