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China Switches On Hainan Free Trade Port With Sweeping Tariff Breaks

Beijing touts the $113 billion port as a pilot for higher‑level opening to attract investment.

Overview

  • Hainan’s customs split from the mainland took effect on December 18, creating a distinct regime that now makes 74% of goods eligible for tariff‑free entry and expands duty‑free items to more than 6,600 categories.
  • Goods processed on the island can enter the mainland tariff‑free if local value‑added exceeds 30%, with streamlined investment procedures and broader access to some services restricted elsewhere in China.
  • Provincial officials report faster controls and an early rise in tourist arrivals since the change, with visa‑free entry for citizens of 59 countries remaining in place.
  • Chinese and Hong Kong stocks gained on signs of fresh capital inflows following the launch.
  • Officials pitch the port as a blueprint for managed liberalization, while analysts and some trade diplomats question whether it meets expectations for agreements such as the CPTPP.