Under the new framework, the Hainan FTP will implement arrangements for zero tariffs as part of island-wide special customs operations. Manufacturers operating in Hainan will be able to import raw materials tariff-free. At the same time, products that meet a 30% local value-added threshold will be allowed to enter the Chinese mainland without tariffs.
The scheme, which kicked off on December 18, also expands Hainan’s role as a duty-free shopping hub. Luxury goods will be sold tax-free to any Hainan or foreign consumer who can show a record of overseas travel within the previous 12 months, subject to an annual spending cap of 100,000 yuan (about US$14,000) per person. That will extend policies that in the past applied mainly to travelers leaving Hainan for the Chinese mainland.
