Five years after the launch of the Hainan Free Trade Port (FTP)’s value-added processing tariff exemption policy (formally known as the “tariff exemption policy for products with no less than 30% added value after processing), goods sold domestically under the policy have totaled CNY 12.12 billion in value, with CNY 920 million in tariffs waived, Haikou Customs reported on July 11. The policy has supported 11 industries, including pharmaceuticals, medical devices, food manufacturing, and rubber and plastics, helping strengthen Hainan’s modernized industrial framework.

The policy was first introduced on a pilot basis in the Yangpu Economic Development Zone on July 8, 2021. Since then, it has been gradually expanded and improved, becoming one of the most important preferential policies of the Hainan FTP and drawing more manufacturing companies to the region. Taking advantage of its early lead, the Danzhou-Yangpu Economic Circle has built a health food industry cluster valued at over CNY 10 billion.

Since the launch of island-wide special customs operations in the Hainan FTP, domestic sales under this policy reached CNY 680 million as of June 30, 2026, with tariff exemptions totaling CNY 39.48 million. All four policy optimization measures (lower thresholds for beneficiary qualification, expanded range of applicable goods, inclusion of goods produced in Hainan in the value-added calculation, and the cumulative addition of upstream and downstream value-added to the total calculation) have been fully implemented. Two registered companies have engaged in value-added processing using “zero-tariff” imported materials, generating approximately CNY 1.2 million in domestic sales.

Additionally, Hainan has developed a comprehensive bonded value-added processing chain, allowing an upstream enterprise to supply imported processed materials to a downstream company for further processing before the finished products enter the domestic market duty-free, exemplifying enhanced industry chain collaboration.

Six products, including rubber, coffee beans, and coconuts, have received Hainan-origin certification, enabling three companies to perform tariff-exempt, value-added processing using local materials, resulting in domestic sales of CNY 28.39 million. Since the implementation of island-wide special customs operations, the range of industries benefiting from this policy has broadened. Notably, the pearl and rubber sectors have experienced rapid growth.

At Hainan Jingwei Latex Silk Co., Ltd.'s production site, imported Southeast Asian latex is mixed with locally produced Hainan latex. This blend then goes through various manufacturing steps, such as dissolution, drying, vulcanization, and wire drawing, to create latex yarn. The resulting product is sold throughout China without import duties.

"The value-added processing tariff exemption policy has greatly benefited our business, reducing our operating costs by about CNY 3 million this year and significantly enhancing our product competitiveness," a company representative said.