Hainan FTP goes full throttle to achieve independent customs operations

South China's Hainan province has gained new impetus in the building of the free trade port (FTP) with the launch of the first airport project for independent customs operations on May 31.

Construction works with an estimated investment of 420 million yuan ($63 million) have begun in the Haikou Meilan International Airport, involving the upgrade of the terminals, scanning equipment and the information supervision system. Similar projects for the other two airports on the island will also be launched by the end of June.

As one of the country's major opening-up measures in the new era, China aims to build the whole of Hainan Island into a globally influential and high-level FTP by the middle of the century.

According to a plan on the Hainan FTP released in 2020 by the central authorities, the Hainan FTP is set to initiate independent customs operations by 2025.

During the past two years, over 150 policies and measures, including the country's first negative list for services trade and the zero-tariff policy for some imported goods, have taken effect in Hainan, promoting trade and investment facilitation. China's Law on the Hainan FTP went into effect in June 2021.

The wider opening-up push is delivering visible outcomes. In the first four months of this year, Hainan saw its goods trade totaling 59.8 billion yuan, up 68.8 percent year-on-year, and its actual use of foreign investment hit $1.04 billion, up 54.1 percent year-on-year.

In 2021, a total of 1,981 foreign-invested companies were newly established in Hainan, surging 81.7 percent year-on-year.

By the end of April, the zero-tariff policy had reduced taxes for enterprises by 1.7 billion yuan, covering ships, yachts, production materials and equipment, and amusement facilities, said He Bin, an official with Haikou Customs in the provincial capital.

The province currently has 10 duty-free shops, and the number of international brands has expanded to more than 1,400 from less than 100 originally, said Cui Jian, deputy director of the provincial department of commerce.

In Hainan's Qionghai city, the Boao Lecheng International Medical Tourism Pilot Zone has become the main passage for international innovative medicine and medical devices to enter China. It received 127,300 people through medical tourism last year, marking an increase of over 90 percent from the previous year.

Hainan assesses and dynamically adjusts its existing policies to respond to the interests of market entities in a timely manner and further releases policy dividends, said Yang Lei, deputy director of the Hainan provincial department of finance, adding that the province is now mulling over a sales tax reform.

"We will make every effort to ensure the completion of all preparations for independent customs operations of the whole Hainan Island before the end of 2024," said Li Yufei, a provincial official in charge of deepening reform in Hainan.