Hainan FTP promotes opening-up with swift, steady steps

South China's Hainan Province is pushing forward the opening-up at the Hainan Free Trade Port (FTP), which is scheduled to begin independent customs operations throughout the island by the end of 2025 with swift but steady steps.

Photo taken on Dec. 10 shows the busy container terminal at the Xiuying Port, Haikou city, south China's Hainan Province. [Photo/Su Bikun]

A large screen in the office building of Haikou Customs in Haikou city of the island province displayed the progress on key tasks of customs for independent customs operations.

By the end of October 2023, 28 out of 97 key tasks had been completed, and 69 were underway, while 73 out of another 158 tasks had achieved phased goals and 85 were advanced in an orderly manner, the screen showed.

The province is building a special customs regulation zone featuring independent customs operations throughout Hainan Island. The institutional system of liberalization and facilitation with "zero tariff" as the basic feature is being applied to the goods trade at the FTP.

The Xinhai port is a key transportation hub in the Qiongzhou Strait in Haikou. The port and the Xiuying Port, 17 kilometers apart, jointly handle over 85 percent of transport volume leaving Hainan through the Qiongzhou Strait.

Haikou Customs officers conduct on-site verification of the information system operation at a meat processing enterprise. [Photo courtesy of Haikou Customs]

To make customs clearance more efficient, Haikou Customs is exploring the creation of a smart supervision system, and is collaborating with local governments to accelerate the construction of infrastructure, supervision facilities and equipment, and an information system at ports, and improving inspection accuracy and clearance facilitation, said He Bin, a Haikou Customs official.

According to Haikou Customs, in the first 11 months of 2023, Hainan recorded 6.23 million duty-free shoppers, surging by 59.6 percent year on year, who bought offshore duty-free products worth 40.7 billion yuan ($5.74 billion), a year-on-year increase of 26.1 percent.

To further enhance the offshore duty-free shopping experience, two methods for picking up offshore duty-free goods starting April 1 this year — "buy and pick-up" and "guaranteed pick-up”—were added by several departments, including the General Administration of Customs, said Yuan Yuan, head of the duty-free goods supervision department of Sanya Customs.

Customers can choose the "buy and pick-up" method for duty-free goods in 15 categories, including cosmetics, perfumes, bags, and infant milk powder, and the "guaranteed pick up" method for duty-free products with a unit price of at least 50,000 yuan before each departure from the island.

Workers test the composition of submitted inspection samples in a laboratory of the national (Sanya) quarantine inspection and isolation center in south China's Hainan Province. [People's Daily Overseas Edition/Wang Junling]

These new measures have further improved the consumers' shopping experience in Hainan.

The master plan for the Hainan FTP issued by Chinese authorities shows that China will carry out the arrangements of zero tariff, a low tax rate and streamlined tax structure according to the different phases of creating the Hainan FTP, and eventually establishing an internationally competitive tax system.

More and more enterprises have enjoyed the benefits of the favorable business environment in the Hainan FTP, including Ausca International Oils and Grains Co., Ltd. in the Yangpu Economic Development Zone.

The comprehensive grain and oil processing enterprise's annual import and export volume has reached 1.6 million tonnes.

"Corn, soybeans, palm oil and other agricultural raw materials can be processed here, and the orders we receive have been scheduled to be produced after May 2024. So far this year, our company's output is worth over 4.3 billion yuan. This year's total output value will surely surpass 4.7 billion yuan," said Zhang Hui, chairman of the company.

Zhang attributed the company's rapid development to a series of opening-up policies in the Hainan FTP, such as exempting tariffs for sales of processed goods with value-added exceeding 30 percent, and imported materials in the mainland.

As of the end of November this year, nine companies in Yangpu had benefited from tariff exemptions for the domestic sales of processed value-added goods, which were exempted from 330 million yuan in tariffs, said Wang Qichao, deputy director of the management committee of the Yangpu Economic Development Zone.

In the Yazhou Bay Science and Technology City, the building of the national (Sanya) quarantine inspection and isolation center has been put into use.

An advanced device called confocal laser scanning microscopy, a type of fluorescence microscopy, was installed at a laboratory in the center at the end of September this year to help workers quickly understand the situation of submitted inspection samples, and provide technical support to customs officers to determine whether relevant goods can enter the country, said Lu Xiaohong, a laboratory technician.

From 2018 to 2022, Hainan's foreign trade enjoyed positive growth, with an average annual growth of 23.4 percent, said Gao Ruifeng, chief of Haikou Customs.

The Hainan FTP policy and institutional system has been basically established, and early policies are taking effect, Gao added.

The official said Hainan has gradually improved its business environment and boosted its export-oriented economy.

"We will build a customs supervision system suited to the high-level opening-up of the free trade port to support the high-level opening-up and high-quality development of the Hainan FTP," Gao said.