The first batch of zero-tariff petrochemical raw and auxiliary materials arrived at Yangpu Port in Hainan Province on December 18, 2025, after China on Thursday launched island-wide special customs operations in the Hainan Free Trade Port (FTP), the world's largest FTP by area. Photo: VCG

China on Thursday launched island-wide special customs operations in the Hainan Free Trade Port (FTP), the world's largest FTP by area, allowing freer entry of overseas goods, expanding zero-tariff coverage, and introducing more business-friendly measures.

Substantial progress has been achieved in developing the Hainan FTP, and the essential conditions for its island-wide special customs operations have been met, Chinese Vice Premier He Lifeng said at the launch ceremony in Haikou, the capital of south China's Hainan Province.

The island-wide special customs operations should serve as an opportunity to deepen reforms in key sectors, steadily advance high-quality development, improve the risk prevention and control system, and build the Hainan FTP into a leading gateway for China's opening-up in the new era, said He, also a member of the Political Bureau of the Communist Party of China (CPC) Central Committee. 

This tropical island, spanning more than 30,000 square kilometers, or an area roughly equivalent to the size of Belgium, has been designated as a special customs supervision zone. This marks a new stage in the development of the Hainan FTP, which enables freer flows of goods, capital, personnel and data, supported by zero tariffs, low tax rates and a simplified tax system.

Against the backdrop of rising trade protectionism, fragmentation of global supply chain and escalating geopolitical tensions, Thursday's launch - which aligns with one of the highest standards of international economic and trade rules - carries unprecedented significance as it sends a clear signal on China's unwavering commitment to opening-up and willingness to share with the world its development dividends, analysts said. 

The strategic launch on December 18 also unfolds a new chapter in China's reform and opening-up, a policy firstly adopted at the third plenary session of the 11th Central Committee of the Communist Party of China (CPC), which opened on the same day in 1978. 

This demonstrates that, on the basis of decades of successful opening-up experiences, China is now exploring new models of high-level institutional openness with greater confidence and dynamism, observers said. They stressed that these efforts will serve as a vital cornerstone in the country's drive for high-quality development and the construction of a new development pattern in the years ahead.

'First-of-its-kind'

The start of special customs operations on Thursday was marked by various "first-of-its-kind," ranging from the customs clearance of the first batch of goods arriving under the zero-tariff policy, the application of the first Fortune Global 500 company to establish operations in Hainan, and the first three vessels which obtained ownership certificates issued by the Hainan International Ship Registration Administration - all of which represent the tangible policy tailwinds of Hainan FTP.

Following the island-wide launch, Hainan on Thursday implemented a 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, which are 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 are 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.

According to Xinhua, on the first day of the launch, Hainan's ports 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 500 million yuan.

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. 

"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. 

"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."

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. 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.

Huang Yin, managing partner of consulting firm EY's South China region, told the Global Times that the company set up a branch in Hainan in 2018. Anticipating the huge volume of inquiries after the implementation of Hainan FTP policies, the company will launch all its professional services line to the island.

"We are fully aware of the strategic significance of the Hainan FTP. It is benchmarked against other FTPs such as the Hong Kong Special Administrative Region, and Singapore, and thus holds immense promise for the future," Huang said.

According to a report by the US-based Eurasia Review, the Hainan FTP initiative is far more than a policy adjustment. It is a new milestone in China's reform and opening-up, and a real-world laboratory in redefining global trade, institutional innovation, and economic connectivity.

Observers said that upon the launch of the FTP, Hainan's role will be transformed from merely a "maritime frontier" to a "gateway to the world," profoundly reshaping the global trade and regional industrial chain pattern, while also fostering inclusive and universally beneficial economic globalization.

Liang Haiming, dean of the Hainan University Belt and Road Research Institute, told the Global Times on Thursday that through a package of policies such as zero tariffs, low tax rates, and a simplified tax system, the Hainan FTP will become an ideal destination for global investors and a global testing ground for enterprise-level innovation. Taking account of Hainan's geographic position, Liang in particular took note of the island's closer business and people-to-people exchanges with ASEAN and RCEP members.

Milestone institutional opening-up

"The full-island operation illustrates that, in the context of economic globalization, while some countries are raising tariffs and erecting barriers, others, such as China, are expanding high-level opening-up and welcoming partners from around the world to share in the dividends of development. This is a crucial development," Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday. 

The annual tone-setting Central Economic Work Conference, held from December 11 to 12, also 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.

At the 47th anniversary of the third plenary session of the 11th CPC Central Committee, the island-wide customs operation of Hainan FTP represents a policy innovation on the basis of years of rich experiences drawn from China's reform and opening-up process, Zhou said.  

As such, in the next stage of China's development, Hainan - as a key testing ground for reform - shoulders the important mission of paving new paths and accumulating fresh experience for building a high-standard socialist market economy, particularly in key areas such as trade and investment, fiscal and financial systems, and government regulation, analysts noted.

"It also represents a new starting point for China's institutional opening-up. While the operation of the island is benchmarked against one of the most advanced international practices, it also allows for the exploration of a unique FTP model in light of Chinese local conditions. Meanwhile, the institutional opening-up is not a static process, rather it will be a continuous dynamic adjustment approach that takes into account both domestic and external situation," Zhou noted.