Page 164 - AmCham South China 2026 Special Report on the State of Business in South China

Fig 11. Hainan is rapidly becoming a vital domestic and international consumption destination

Source: Department of Tourism, Culture, Radio, Television and Sports of Hainan Province

October 2024, over 700 space-related enterprises on 18 December 2025. The development is widely
and institutions had settled in the space city, forming seen as a major milestone in the opening up drive
a growing ecosystem led by key players such as of the world¡¯s second largest economy, despite
the China National Space Administration. In March rising protectionism worldwide.
2025, Hainan also launched its first Aerospace
Application Technology Industry Academy, aiming Following the launch, a series of policy and
to cultivate interdisciplinary talent through a focus regulatory documents come into force. These
on space, internationalization and AI. include a notice detailing tax policies for the
goods moving across the ¡°first line¡± (between
Last but not the least, Hainan¡¯s modern service Hainan and global markets) and the ¡°second line¡±
industry saw an average growth rate of 9.2% during (the customs boundary between Hainan and the
2021-2024, 6.1% higher than the GDP expansion Chinese mainland), and for goods circulating
during the same period . After the island- within the island, along with a notice on the
133
wide special customs operations, the industry is catalogue of imported goods subject to taxation
expected to unlock more long-term opportunities within the Hainan FTP. The documents also cover
for both domestic and international enterprises interim rules on customs supervision and tax
in the coming years, particularly in the financial administration for duty-free processing of value-
services, logistics, conventions and exhibitions, added goods, a list of goods and items that are
health care, education sectors. prohibited or restricted from import and export
and the overall customs supervision measures
for the FTP.
Recent policies and reforms
The supporting policy framework delivers
Announcement on island-wide special breakthroughs in key areas:
customs operations of Hainan FTP 134
? Expanded ¡°zero-tariff¡± coverage: Post-
In early December 2025, Hainan government closure, ¡°zero-tariff¡± eligible goods expand from
released an official announcement on the island- about 1,900 to approximately 6,600 tariff lines,
wide special customs operations which took effect increasing coverage from 21% to 74% of total
133 Department of Commerce of Hainan, https:// import and export items, encompassing most
dofcom.hainan.gov.cn/dofcom/xctp/202504/ production equipment and raw materials. This
f39e2305573c4cf5b65426487e0fde50.shtml exemption applies to import tariffs, import VAT and
134 Government site of Hainan, https://www. consumption tax, potentially saving enterprises
hainan.gov.cn/hainan/szfwj/202512/c710b-
14b805746e2b1d9d68f8bfb305b.shtml about 20% in tax costs on imported equipment.

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