China's Hainan Free Trade Port (FTP) will officially begin island-wide independent customs operations on December 18, 2025, marking a major milestone in the country's push for higher-level openness, officials announced Wednesday.

The move will introduce sweeping trade and tax liberalization policies designed to boost investment, trade and industrial development on the tropical island.

Key policy changes

Under the new customs closure system, Hainan will expand zero-tariff goods coverage: the proportion of duty-free imported goods will jump from 21 percent to 74 percent, covering around 6,600 product categories, up from the current 1,900. These goods can circulate tax-free among eligible businesses within Hainan.

Eight ports will serve as first-tier entry points, allowing expedited clearance for qualified imports, while 10 second-tier ports will manage goods entering the mainland.

Goods produced by encouraged industries in Hainan that achieve at least 30 percent value-added processing can enter the mainland tariff-free.

The new policies aim to strengthen supply chains, attract foreign investment and foster industrial clusters in sectors like tourism, modern services, high-tech and tropical agriculture, which already account for 67 percent of Hainan's GDP.

Hainan's green energy transition is advancing rapidly, with clean sources now accounting for 70 percent of its power generation. The island also leads China in electric vehicle adoption, with a penetration rate of 59.6 percent.

Over the past five years, Hainan has seen rapid growth in foreign trade and investment, with foreign direct investment inflows reaching 102.5 billion yuan ($14.3 billion), growing at 14.6 percent annually. Goods trade volume surged 31.3 percent yearly, with 176 countries and regions investing in the island. 85 countries now enjoy visa-free entry, making it the most liberal policy in China.

What changes will be seen?

Wang Changlin, deputy head of the National Development and Reform Commission, clarified that tourists and business travelers will see no changes and no extra documents are required for entry.

Wang called the customs closure "a new starting point" for Hainan's development. The government will continue refining policies to enhance openness and build Hainan into China's premier gateway for global trade.