Hainan Free Trade Port’s New Regulatory Framework: Advancing Toward a World-Class Trade Hub
This article contains AI assisted creative content
China's southern province of Hainan is rapidly positioning itself as a leading free trade hub with significant legislative and policy advancements set to take effect on December 18, 2025. The newly enacted Hainan Free Trade Port Port Customs Management and Service Regulations (Trial) and an expanded zero-tariff import policy mark a decisive move to deepen economic openness and streamline cross-border trade.
On July 30, 2025, Hainan's Provincial People's Congress approved the Port Customs Management and Service Regulations (Trial), establishing a legal framework for the high-quality development of Hainan's port customs system, critical for the free trade port's operations.
The regulations implement a “dual-line” customs model: a “first line” separating Hainan from foreign customs territories, and a “second line” between Hainan and mainland China. This structure balances tight customs control with efficient trade facilitation.
The law integrates port planning, construction, and management under principles of scientific planning, green standards, digital governance, and international best practices.
TWO
A three-tier governance system is set up:
-
Provincial coordination and planning
-
City and county-level execution
-
Collaboration among customs, maritime, and border inspection agencies
The regulations clarify port establishment, expansion, and management procedures for both international “open ports” and domestic “second line ports,” introducing graded infrastructure acceptance and flexible temporary use rules.
THREE
The new regulations emphasize smart, streamlined customs clearance featuring:
-
A unified “single window” platform enabling paperless, cross-agency processing
-
Optimized procedures for cargo, personnel, tax, and quarantine clearance to reduce time and costs
-
Special protocols for international events and emergency responses
-
Cross-border credit management enhancing regulatory predictability
“Second line” ports will supervise preferential tariff goods entering Hainan while exempting other goods from additional checks.
FOUR
Complementing the regulations, Hainan will launch a zero-tariff import system covering 6,600 product categories (74% of taxable items), a substantial increase from the current 1,900 categories.
This surpasses regional trade pacts such as RCEP, which averages 65% tariff elimination. Hainan also waives VAT and consumption tax on qualified imports.
Zhou Zheng, Deputy Director of Hainan's Finance Department, notes the adoption of a “negative list” reflects deeper institutional openness aligned with international trade standards.
Combined with a reduced 15% corporate tax rate (vs. China's 25%), the policies offer significant cost advantages and encourage investment in value-added manufacturing for tariff-free exports to mainland China when local value exceeds 30%.
FIVE
For banks, investors, insurers, government agencies, and multinational firms, Hainan's reforms bring:
-
Lower import costs and improved supply chain efficiency
-
Greater regulatory clarity supporting compliance and risk management
-
Expanded market access via tariff-free exports to China's mainland
-
Opportunities to engage with a pioneering free trade model aligned with China's “dual circulation” strategy
Tu Xinquan, Dean of the China Institute for WTO Studies, highlights Hainan's model as a unique, autonomous step beyond traditional trade agreements.
First, please LoginComment After ~