A billboard for the launch of island-wide special customs operations in the Hainan Free Trade Port (FTP) is seen in Wenchang, south China's Hainan Province, Dec. 17, 2025. China on Thursday launched island-wide special customs operations in the Hainan Free Trade Port (FTP). (Xinhua/Pu Xiaoxu)

The first batch of daily consumer goods duty-free shops for island residents in South China's Hainan Province opened on Wednesday, the Xinhua News Agency reported. The openings mark the start of a policy designed to boost local consumption ahead of the Spring Festival holidays.

The five outlets, located across three cities — Haikou, Sanya and Danzhou — are among the island's first to operate under a newly implemented zero-tariff policy on certain imported goods for consumption by residents of the Hainan Free Trade Port (FTP).

"We are honored to be selected as one of Haikou's first designated stores and to serve as a main showcase and experience window for the zero‑tariff policy," Shao Huanhuan, a manager at Haikou International Duty Free City, told the Global Times on Wednesday. 

This policy truly reflects the openness and inclusiveness of the Hainan FTP. A family of three is granted an annual duty-free shopping quota of 30,000 yuan ($4,341), which can basically meet a family's high-frequency needs for imported daily necessities throughout the year, Shao said.

According to the Xinhua report, each eligible resident, including Chinese citizens with a Hainan identification card, residence permit, or local social security card, as well as foreign nationals living and working in Hainan with valid residence permits, are granted an annual duty-free shopping quota of 10,000 yuan at the designated duty-free stores, with no limit on the number of purchases. 

The policy covers daily necessities, including specified food and beverages, daily chemical products, household goods, and maternal and child supplies, according to Xinhua.

The openings follow a policy jointly introduced on February 5 by the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration. 

The policy allows eligible Hainan residents to purchase imported consumer goods free of import tariffs, import value-added tax, and consumption tax, within an annual quota.

Officials said that the new measures aim to make the benefits of the Hainan FTP more tangible for residents by lowering everyday living costs and expanding shopping choices.

Local authorities said that the policy is open to all types of enterprises — state‑owned, private, foreign and Hong Kong-, Macao and Taiwan-based investors — to operate eligible shops, according to the Sanya Daily on Saturday. 

Hainan financial officials said that the move is the first incremental tax policy rolled out by central ministries since the province began island-wide independent special customs operations in December 2025, and is part of the broader Hainan FTP institutional design in the area of people's livelihoods.

"By linking island residents' consumption with existing offshore duty‑free reforms, the policy will stimulate local demand and attract more off‑island spending back to Hainan, Li Shijie, head of the Hainan Institute of Open Economic System, told the Global Times on Wednesday.

A series of tax incentives is enhancing residents' tangible benefits and will help Hainan transform from a single tourist destination into an international consumption center, Li said.

The launch comes amid a strong start for Hainan's duty‑free market. Figures from Haikou Customs showed that offshore duty-free sales in Hainan reached 4.53 billion yuan in January, up 44.8 percent year-on-year. Shop visits reached 560,000, up 21 percent year-on-year, while the number of items purchased hit 3.367 million, up 14.0 percent.

Out of the total, duty-free shopping by departing travelers amounted to about 18.32 million yuan, compared with 14.3 million yuan in purchases by island residents, the customs data showed.