The first cargo truck passes through Xinhai Port in Haikou following the launch of island-wide special customs operations at the Hainan Free Trade Port, on December 18, 2025. Photo: Tao Mingyang/GT

The Hainan Free Trade Port (FTP) officially launched island-wide special customs operations on Thursday, with a package of policies  ̵̶̵  including zero tariffs and preferential tax rates  ̵̶̵  taking effect, marking another milestone in China's opening-up.

With the move, the tropical island of more than 30,000 square kilometers has been designated as a special customs supervision zone, which makes it the world's largest FTP by area, according to the Xinhua News Agency. 

Following the island-wide launch, Hainan will operate as a special customs supervision zone, implementing a liberalized and facilitative system characterized by a clearly defined framework of "freer access at the first line, regulated access at the second line, and free flows within the island."

Under this arrangement, the island's eight existing ports open to the outside world serve as "first-line" ports, where eligible imported goods are released directly, while 10 "second-line" ports handle goods entering the mainland, with a range of streamlined clearance measures in place.

After the launch, the number of tariff-free product categories expanded from about 1,900 to more than 6,600, while the share of goods eligible for zero tariffs rose from 21 percent to 74 percent. Under the value-added processing policy  ̵̶̵  a core preferential policy of the Hainan FTP  ̵̶̵  products processed in Hainan by enterprises in encouraged industries using imported materials can be sold to the mainland tariff-free if the value added exceeds 30 percent, according to a provincial government official.

On Thursday morning, enterprises moved quickly to leverage the new preferential policies to boost business. 

Hainan Zambon Pharmaceutical Co, a subsidiary of Italy-based Zambon Group, was among the first companies to ship goods through Xinhai Port in Haikou, provincial capital of Hainan, on the day the island-wide special customs operations were launched. On Thursday, the company imported a batch of goods with a total value of 1,716 euros ($1,850) and a combined weight of 65.51 kilograms.

Smooth operations

"The overall process for customs clearance and logistics has been very smooth," Xian Haiyan, plant director of the company, told the Global Times on Thursday. "Once orders are ready, we can declare customs clearance directly through the system, arrange shipments after completing tax procedures, and then transport the goods to mainland markets through designated channels."

"In recent years, a key support for our development has been the gradual stabilization of regulatory policies and the institutional environment, which has made market expectations much clearer," Xian said. "The overall environment is predictable and manageable."

According to Xinhua, on the first day of the launch, Hainan's ports open to the outside world were expected to handle concentrated imports of zero-tariff goods  ̵̶̵  including crude oil, medical equipment, aviation materials and food ingredients  ̵̶̵  with a total value exceeding 5 billion yuan.

Hainan Airlines is among the beneficiaries of the zero-tariff policy for imported transport equipment. Since the beginning of this year, supported by the policy, the airline has successfully introduced an A321neo aircraft and a brand-new Airbus A330 wide-body aircraft, with tariff savings during the lease period expected to exceed 16 million yuan.

The company told the Global Times on Thursday that following the launch, it will fully leverage tariff reduction policies to lower maintenance and operating costs, enhance profitability, and strengthen market competitiveness.

The move, a landmark step by China to unwaveringly expand high-standard opening-up and promote the development of an open global economy, will make it easier for global investors to access the Chinese market and share in the country's development opportunities, analysts said.

On the same day, the administrative service hall in Yangpu Economic Development Zone in Hainan welcomed the first Fortune Global 500 company to establish operations in Hainan that day. Lars Walker, project leader of Siemens Energy's gas turbine assembly project in Hainan, received the business license for Siemens Energy (Hainan) Co, China News Service reported on Thursday.

Also on Thursday, three vessels obtained ownership certificates issued by the Hainan International Ship Registration Administration, becoming the first international ships registered at "China Yangpu Port" following the launch. As of press time, the number of vessels registered under the "China Yangpu Port" flag had reached 80, ranking first among China's free trade zones and ports in terms of registration frequency and shipping capacity, according to China News Service.

For companies operating in Hainan, lower tax rates represent another major institutional dividend of the launch. Under the "dual 15 percent" preferential policy, eligible enterprises in encouraged industries  ̵̶̵  including tourism, culture and sports  ̵̶̵  that are registered and operate substantively in the Hainan FTP are subject to a reduced corporate income tax rate of 15 percent.

In addition, for high-end and urgently needed talent working in tourism and cultural tourism sectors in Hainan, the portion of individual income tax exceeding an effective rate of 15 percent is exempt.

The low-tax regime is expected to reduce the tax burden on enterprises and individuals, enhance investment appeal, and attract tourism businesses and high-level talent to Hainan, analysts said. 

Under the special customs operations, it will be easier for global investors to access the Chinese market and share in China's development opportunities, while also leveraging the country's vast domestic market to attract and concentrate high-quality production factors, they said.

China has been continuously expanding opening-up. The annual tone-setting Central Economic Work Conference, held from December 11 to 12, underscored the need to steadily advance institutional opening up, expand self-initiated opening up in the service sector in an orderly manner, and make solid progress in developing the Hainan Free Trade Port.

Highlighting China's continuous efforts for opening-up, the launch of island-wide special customs operations in Hainan on Thursday also coincides with another crucial date in China's reform and opening-up. On December 18, 1978, the 11th Central Committee of the Communist Party of China convened its Third Plenary Session, during which the policy of reform and opening-up was adopted.