After the closure, the number of zero-tariff items will increase from 1,900 to about 6,600, accounting for 74% of all commodity items, a rise of nearly 53 percentage points compared to before the closure. This means that almost all production equipment and raw materials will be included in the zero-tariff scope, which is expected to reduce the import tax burden for related enterprises by about 20%. In addition, Hainan Free Trade Port will adopt a negative list management approach. Except for the goods listed in the “Hainan Free Trade Port Import Taxable Goods Directory,” all other imported goods will enjoy the zero-tariff policy.

After the closure, two key optimizations have been made to the processing value-added duty-free policy: First, the restriction that the main business income of encouraged industries must account for more than 60% has been canceled, significantly lowering the threshold for enjoying benefits. Second, the processing value-added of upstream and downstream enterprises can be combined for statistics, and the value of Hainan-produced goods can be included in the value-added part. Purchasing Hainan-produced goods will not be counted as material costs. This will make it easier for enterprises to meet the 30% value-added threshold and encourage them to conduct deep processing and transfer in Hainan, forming a close industrial chain.

In the “first line” import direction, open arrangements have been made for some prohibited and restricted imported goods that currently exist nationwide. At the same time, the eight existing open ports on the island will serve as “first line” ports, directly releasing qualified imported goods. Ten “second line” ports, including Haikou Xinhai Port and Haikou Nan Port, will be set up and operated to innovate various convenient passage measures for goods entering the mainland.

Low-intervention, high-efficiency precise supervision will be implemented for zero-tariff goods, goods with relaxed trade management measures, etc., to ensure the smooth implementation of various open policies. At the “second line” ports, customs will set up regulated and non-regulated channels. For the three types of goods – zero-tariff goods, goods enjoying processing value-added policies, and goods with relaxed trade management measures – customs will manage them in the regulated channel and innovate the “batch out of the island, centralized declaration” customs clearance model to improve efficiency.

The policy upgrade will focus on supporting high-end manufacturing and high value-added processing industries. For example, the jewelry industry can invest the saved tariff costs into the research and development of pearl peptides, realizing the transformation from traditional jewelry processing to the biotechnology field with the support of policies. In addition, the policy also encourages enterprises to conduct deep processing and transfer in Hainan to form a closely cooperating industrial cluster and fundamentally enhance the competitiveness of industries.

Compared with the past, the policy upgrade not only expands the scope of zero-tariff goods but also lowers the policy threshold, enabling more enterprises to enjoy policy benefits. At the same time, by optimizing the processing value-added duty-free policy, enterprises are encouraged to extend the industrial chain and increase product value-added. In addition, the relaxation of trade management measures and the innovation of regulatory models will further enhance the openness and operational efficiency of Hainan Free Trade Port.

Overall, the upgrade of Hainan Free Trade Port’s import tax policy will bring substantial cost reduction for enterprises and promote the industrial upgrading and economic development of Hainan Free Trade Port.

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