Approved by the Central Committee of the Communist Party of China, the island-wide special customs operations of the Hainan Free Trade Port will officially commence on December 18, 2025. The second episode of the large-scale interview program Dialogue with Experts on the Free Trade Port features an in-depth conversation with Zhang Jianping, Deputy Director of the Chinese Academy of International Trade and Economic Cooperation, Ministry of Commerce of the People’s Republic of China.

Hainan will see greater new opportunities for high-quality employment.

Reporter: the island-wide special customs operation of the Hainan Free Trade Port will launch on December 18 this year, drawing high expectations from all sectors. What changes will this bring to business entities and the general public?

Zhang: The island-wide special customs operation is a landmark project in the development of the Hainan Free Trade Port and a major initiative for China to advance institutional opening-up, advancing reform and development. Relevant authorities are currently formulating tax policies for island residents purchasing imported consumer goods. Once implemented, these policies will deliver tangible economic benefits to them. More significantly, the influx of foreign investment and people including skilled professionals will create increasingly abundant employment opportunities, bringing greater prospects for high-quality employment on the island.

Reporter: Attracting foreign investment is central to China’s high-level opening-up. What critical role will the Hainan Free Trade Port play in drawing foreign capital after the island-wide special  customs operations?

Zhang: Over the past five years, the Hainan Free Trade Port has utilized RMB 102.5 billion in actual foreign investment, achieving 14.6% average annual growth—among the nation’s highest. Foreign direct investment surged to $9.78 billion, averaging 97% annual growth. A total of 8,098 new foreign-funded enterprises were established, growing at 43.7% annually. Businesses from 176 countries and regions have invested in Hainan, with the island’s external-oriented degree elevating to 35%. Going forward, Hainan is poised to become China’s new hub to attract and utilize foreign investment for the following reasons:

First, Hainan is building a trade management system featuring free flow，safety and convenience, while further expanding zero-tariff product coverage. This will greatly boost foreign enterprises' confidence in investing in China.

Second, the province is building an open, transparent, and predictable environment for investment and business operations. Guided by national policies, it is further liberalizing market access for foreign investment through a series of special measures. Concurrently, the province is accelerating the development of a process-focused investment facilitation system.

Third, the island is gradually establishing a financial management system and policy framework aligned with its opening-up and development, To facilitate post-entry capital operations for foreign direct investment (FDI), the province is accelerating the improvement of its multi-functional Free Trade Account system, further enriching account functions and application scenarios, steadily expanding the opening-up of the financial industry to both domestic and foreign markets, actively attracting foreign financial institutions to operate in Hainan, and vigorously pioneering cross-border asset management and other businesses.

Fourth, Hainan is implementing more streamlined entry-exit policies by further easing restrictions on personnel flow. More flexible temporary entry arrangements for business professionals, expedited work visa processing, and enhanced residency systems will collectively enable more efficient movement of business people in Hainan.

Fifth, a more open and free shipping system will be established. For instance, Hainan is accelerating the development of the "Yangpu Port " as a ship registration port, continuously optimizing ship inspection policies and upgrading shipping services. A large number of ships have now registered at Yangpu Port. Additionally, airspace control and traffic rights restrictions will be relaxed, and efforts will be made to promote the opening of the seventh freedom of the air. 

Sixth, an efficient, convenient and secure mechanism for cross-border data flow will be built. After the launch of island-wide special customs operations, many business entities will have huge market demands in digital trade and digital economy, which will inevitably put forward new requirements for the management and opening-up of information and communications. Currently, the country has been steadily expanding the opening-up of communication resources and services in Hainan, adjusting and improving the negative list for data exit management, accelerating the construction of international communication service entry-exit bureaus and cross-border submarine optical cables, and actively fostering the development of the digital economy.

The tarrif exemption policy for processed and value-added products after the island-wide special customs operations will significantly lower eligibility thresholds.  

Reporter: What adjustments and optimizations will be made to the policy of tariff exemption for domestic sales of processed and value-added goods after the island-wide special customs operations?

Zhang: The most significant optimization and adjustment now is that the policy of tariff exemption for domestic sales of processed and value-added goods will be implemented on a large scale. Following the special customs operations, optimizations will focus on the following aspects：

First, the threshold for enterprises to enjoy the preferential policy will be relaxed by removing the restriction that the main business income of the encouraged industries of the beneficiary enterprises account for more than 60% of the total income of the enterprises.

Second, the scope of eligible raw materials will expand to include "zero-tariff" imported goods, extending beyond the previous pilot coverage limited to bonded goods.

Third, the value-added calculation formula or processing and value addition will be refined to incorporate the value of wholly produced Hainan Free Trade Port goods into the value-added portion, making it easier for enterprises to achieve the 30% value-added rate.

Fourth, the scope of application for accumulating processing and value-added amounts will be expanded. For bonded goods that generate added value through processing and manufacturing by different upstream and downstream enterprises, the added value can also be calculated on an accumulative basis. This is to encourage enterprises to expand and extend industrial chains, thereby forming industrial chain clusters.

Therefore, after the special customs operations, the threshold for enjoying the tariff exemption policy on domestic sales of processed and value-added goods will be significantly lowered, which will rapidly expand the coverage of beneficiaries. This will better meet the production needs of enterprises in the island and help Hainan cultivate industrial chains and clusters.

Reporter: The Ministry of Commerce recently released theList of Prohibited and Restricted Imports and Exports of Goods and Articles in the Hainan Free Trade Port. What considerations guided its implementation, and what new approaches does it explore for trade liberalization?

Zhang: This List functions can be vividly compared to a negative list for trade in goods, marking an innovative evolution based on China’s current trade management framework. It represents an importantinstitutional advancement and exploration to further enhance the level of trade liberalization and facilitation in Hainan Free Trade Port.

On one hand, it has significantly enhanced goods trade management transparency. For the first time, the List has comprehensively and systematically specified the scope of import and export goods and articles subject to the country's current prohibited and restricted management measures, helping business entities clearly and conveniently understand the boundaries of such management.

On the other hand, it has substantially enhanced the openness of trade in goods. On the premise of upholding international obligations, national security, and the bottom line ofecological and environmental protection, the list has relaxed management measures for some imported goods in line with the development needs of the Hainan Free Trade Port. In short, it involves relaxing restrictions and expanding opening-up pilots. For example, it has abolished the import license management for used mechanical and electrical products under 60 commodity codes, covering about 80% of the used mechanical and electrical products subject to import license management, which can basically meet the needs of Hainan enterprises for their own production.

Policies delivering tangible benefits to enterprises and residents are being implemented at the grassroots level.

Reporter:With less than five months to go before the island-wide special customs operations commence, what tasks require prioritized attention?

Zhang: Our current top priority is ensuring effective policy implementation, which demands focused efforts in four key areas.

First, people of the entire island must further emancipate minds and deepen understanding of the strategic significance and urgency of building the Hainan Free Trade Port.

Second, implementation must center on delivering tangible benefits to businesses and the public, ensuring that policies genuinely serve their interests.

Furthermore, efforts should be made to implement policies from the perspective of institutional integration and innovation. Following the principle of making it easier for enterprises to use policies freely, conveniently and in compliance with regulations, we will promote the integration between the customs clearance policies and various already-implemented free trade port policies, so as to give play to the policy superposition effect of "1+1>2" and reap tangible policy dividends through solid reform and innovation.

Simultaneously, efforts should be made from the perspective of building Hainan as a critical hub connecting domestic and international markets and accelerating alignment with high-standard international economic and trade rules. Currently, the Hainan Free Trade Port needs to speed up the pilot implementation of high-standard economic and trade rules on a trial basis, and strive to build "two bases", "two hubs" and "two networks".