Hainan's Special Customs Operations Lay the Groundwork for Higher Level Opening Up

BEIJING, Dec. 19, 2025 /PRNewswire/ -- An interview from China.org.cn with ZHOU Mi, Senior Researcher at Chinese Academy of International Trade and Economic Cooperation on Hainan FTP:

On December 18th, the Hainan Free Trade Port (FTP) entered a new phase marked by the launch of its island-wide special customs operations.

This marks another step towards a higher-level opening up. But what exactly is embodied in the special customs operations? Under this arrangement, the Hainan FTP is designated as an open special-customs supervision zone, implementing a customs framework distinct from that of the rest of China. It is characterized by "freer access at the first line, regulated access at the second line, and free flows within the island." Freer access at the first line is expected to greatly extend the scope and volume of zero-tariff imported goods; at the second line, which refers to the customs boundary between Hainan and the mainland, goods will be subject to precise and targeted customs oversight. Within the island, various factors of production may flow relatively freely.

These measures are underpinned by deep strategic considerations. Lower tariffs can significantly expand the scope and depth of cross-border collaboration. A case in point is the rapid rise of North America's automobile industry in the late 20th century, which was catalyzed by the low-tariff environment created by NAFTA. As economic globalization progresses, tariffs exert an increasingly profound impact on cross-border production and service models. With more stages of production and coordination spanning national borders, tariff-related costs tend to rise exponentially. For multinational enterprises, Hainan's commitment to a stable low-tariff institution represents a durable, long-term advantage.

Following the launch of the special customs operations, the flow of factors of production between Hainan and overseas markets will become ever more convenient and efficient. Backed by the vast Chinese market, the Hainan FTP is well-positioned to become a key convergence point of multinational supply chains, offering solid institutional support for enterprises that are willing to explore and seize development opportunities in China. Meanwhile, the Hainan FTP provides a "calm harbor" for advancing international economic and trade cooperation amid the impact of rising trade protectionism.

The story doesn't end here. Since 2018, Hainan has accelerated its institutional build-up, rolling out more preferential individual as well as corporate income tax policies, better-connected transportation infrastructure, and more efficient flows of production factors. Together, these measures have lowered business operating costs, fostered a hub for innovation factors, and made Hainan an increasingly appealing destination for high-level and highly skilled talent. These improvements — both hard infrastructure and soft institutional arrangements — enhance policy predictability and lower institutional costs for multinational companies investing, operating and innovating in China.

What's more, a pattern of multi-sector innovation-driven growth is already taking shape in Hainan, spanning from port logistics to commercial spaceflight, deep-sea industries and the medical special zone. Various differentiated growth poles are being fostered, offering fresh growth drivers and opportunities for foreign investment.

Not long ago, China's Central Economic Work Conference concluded in Beijing. The meeting reaffirmed China's commitment to expanding opening up, including steadily advancing institutional opening-up and making solid progress in developing the Hainan Free Trade Port as a key task. With the island-wide special customs operations as a starting point, a new exemplar of the country's high-level opening up earmarked by innovation, fairness and sustainability is beginning to stand out on the global horizon.

China Mosaic 
http://www.china.org.cn/video/node_7230027.htm
Hainan's Special Customs Operations Lay the Groundwork for Higher Level Opening Up
http://www.china.org.cn/video/2025-12/19/content_118236492.shtml 

SOURCE China.org.cn