From aircraft-bonded maintenance to a new era of free trade port operations: Hainan's future takes flight

Editor's note: Zhang Jianping is deputy director of the Academic Committee of the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce. The article reflects the author's opinions and not necessarily the views of CGTN.

The sea breeze sweeps across the vast apron, carrying the sharp scent of salt and engine oil. Rows of aircraft wings stand in disciplined formation, while the steady click of wrenches rings across the hangars, a rhythm unique to aviation maintenance. This is the One-Stop Aircraft Maintenance Industrial Base at the Hainan Free Trade Port (FTP), where a cross-border repair operation is in full swing. Behind this seemingly routine scene lies a story about Hainan's future and the sweeping transformation that special customs operations will bring.

On December 18, 2025, Hainan will officially launch its special customs operations. Eight existing ports open on the island will serve as first-line customs ports, while the island as a whole shifts to a second-line customs management model. The implications are profound. The new framework will dramatically expand Hainan's development space, allowing the province to harness a full suite of preferential policies, from zero tariffs and a negative list for trade in services to the preferential 15 percent income tax for both corporates and individuals, off-island duty-free shopping, and the 30 percent value-added processing rule for tariff-free entry into the Chinese mainland. Together, these measures will systematically accelerate Hainan's opening-up.

At the same time, regulated access at the second line ensures smooth flows of goods, capital, talent, and data between Hainan and the mainland, reinforcing the province's strategic positioning as one of China's "three zones and one center" for comprehensive reform and high-level opening-up.

Under these policies, Hainan is poised to become a major platform for the two-way circulation of economic factors. Domestic and foreign companies, technical talent, and global capital will converge at unprecedented speed, accelerating the province's role in the dual circulation strategy. In this new environment, industries central to Hainan's long-term vision, such as international tourism and consumption, high-tech manufacturing, modern services, and tropical agriculture, will become the anchors for new growth. As these industries cluster and scale, international trade, investment, and shipping will expand accordingly.

Civil aviation is at the forefront of this momentum. Rapid increases in passenger flows and logistics demand have created major opportunities for bonded aircraft maintenance, a niche once dominated by mature overseas markets. In recent years, Hainan's aircraft maintenance sector has begun forging partnerships with international airlines, signaling the emergence of a new growth engine.

This shift began with the Master Plan for the Construction of Hainan Free Trade Port, which designated "the construction of international shipping and aviation hubs along the new land and sea channel in western China." The One-Stop Aircraft Maintenance Base was subsequently identified as a key supporting project and launched in 2022. Yet expectations did not immediately translate into orders. In its first year, the new facility faced skepticism. "Can Hainan handle large aircraft maintenance? Some overseas airlines remain doubtful," recalled Gu Zhilin, director of HNA Technic's Grand China Aviation Maintenance Co., Ltd.

Faced with skepticism, Gu Zhilin and his team did not retreat. Instead, they actively sought out market opportunities and worked relentlessly to earn the confidence of foreign clients. Their hard work pays off. In October 2022, they secured their first international contract – maintenance for an Airbus A320 operated by a foreign carrier.

Looking back on that project, Gu recalls how the team approached the task with absolute rigor, "Everyone remained on high alert, checking the torque of every screw and the connection of every wire with zero compromise."

Timely access to aviation materials proved critical, and Hainan's bonded policies made the difference. Under normal circumstances, sourcing components from overseas would take at least two weeks. But the Hainan FTP's bonded policies enabled the base to stock essential parts in advance, streamlining operations and dramatically reducing procurement time and costs. That first success opened the door to the global market.

Hainan's unique advantages offer strong support for scaling this industry. Maintenance companies face lower capital pressure, as imports for repair require no deposit. Total maintenance costs drop by 10-15 percent. Efficiency improves through the creation of a bonded "aviation parts supermarket," where components can be sourced immediately and duty-free. Customs authorities have also introduced a fast-track model for aircraft and aviation parts, ensuring rapid clearance for international repair orders.

The results speak for themselves. From the base's launch in 2022 to August 2025, technicians completed more than 2,300 aircraft maintenance operations, over 270 full-aircraft painting services, and 58,000 component repairs. More than 20 overseas airlines, including Qatar Airways, Royal Air Philippines, and Iberia, now use the facility. Many have turned into long-term clients. The Hainan maintenance base is steadily rising as an international competitor.

Once the special customs operations are fully implemented, Hainan's policy environment will become even more attractive to domestic and international enterprises, drawing investment and encouraging companies to establish operations on the island. This, in turn, will create industrial clusters aligned with Hainan's current development priorities. At the same time, the 20 core chapters of the Regional Comprehensive Economic Partnership (RCEP) are now being implemented. One of its key provisions – the 40 percent cumulative origin rule – allows value added across any combination of the 15 member economies to count toward tariff-reduction eligibility, greatly facilitating intra-RCEP trade.

Hainan enjoys a unique geographic advantage in this landscape. With a four-hour aviation circle covering most RCEP economies and a central position between China and ASEAN, the island sits at a strategic crossroads of the world's largest integrated market. Combined with its own preferential policies, RCEP benefits, the China-ASEAN Free Trade Agreement, and the Belt and Road Initiative, Hainan is exceptionally well-positioned to become a dual headquarters base: a springboard for foreign companies into China and for Chinese firms expanding globally. This will, in turn, accelerate the growth of Hainan's four major leading industries.

These trends also point to surging demand for international civil aviation services. With the state granting Hainan the fifth freedom traffic rights, Hainan's international route network is expected to expand rapidly as more overseas airlines enter the market. The island's world-class airport infrastructure and rising passenger and cargo volumes point to sustained growth in air transportation. For the bonded aircraft maintenance sector, this dynamic signals vast long-term potential.

To seize these opportunities, Hainan must align with the national mandate to build the Hainan FTP that meets strategic national needs and exemplifies high-level reform and opening-up. The province should implement the Master Plan, placing the rule of law at the forefront, using the legislative authority granted by the National People's Congress to accelerate the development of a legal, international, and market-oriented business environment.

Hainan also needs to liberate thinking further, transform governance approaches, and create a modern government-enterprise relationship rooted in efficient service provision. Talent attraction is equally critical. Expanding international routes and scaling bonded maintenance operations requires a deep pool of skilled technicians and internationally trained managers. Hainan must refine its talent policies to draw and retain these professionals.

The construction of the Hainan FTP is unfolding within a unique framework: the socialist market economy with Chinese characteristics. No other region in the world operates under such conditions. With its ample space and powerful policy toolkit, Hainan can create a strong gravitational pull for enterprises and economic factors at home and abroad. Through systematic operations, the island can build industrial clusters and scale up, thereby strengthening its position in global competition. On this basis, Hainan can deepen cooperation with ASEAN and RCEP partners, as well as with the Asia-Pacific and global markets, strengthening integration into supply and value chains and better responding to rising protectionism.

According to the Master Plan, Hainan will establish by 2025 "the free trade port policy and institutional system, which focuses on trade and investment liberalization and facilitation," and by 2035 become "a new highland of China's opening-up economy." As a gateway connecting domestic and international markets, Hainan will integrate even more deeply with the global economy.

To achieve this, Hainan must continue using opening-up to drive reform, reform to drive development, and development to drive transformation. This means addressing the mutually reinforcing relationship between open development and innovative development. Its economic model must be built on the province's distinctive advantages and institutional strengths, fostering new business forms and new development pathways. In doing so, Hainan can become a new benchmark for 21st-century free trade ports and a model for the next chapter of global free trade port development.

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