Hainan Free Trade Port is set to enter a new chapter in its economic evolution, with China confirming that the island will roll out an independent customs operation across its entire territory on December 18, 2025. Officials say the move marks one of the most significant steps yet in the nation’s bid to open its markets and strengthen its position in global trade.
The announcement was made during the China Economic Roundtable, a program hosted by Xinhua News Agency that brings together senior policymakers to discuss economic reforms. For Beijing, Hainan is more than just China’s largest special economic zone, it is a proving ground for the policies that will shape the country’s economic future.
In April 2018, China unveiled plans to transform Hainan into a pilot free trade zone, with the long-term goal of creating a globally recognized free trade port with “Chinese characteristics.” A master plan released in 2020 laid out a vision of turning Hainan into a hub for high-level openness by mid-century.
The forthcoming customs shift will give the island unprecedented autonomy to experiment with trade and investment rules. “This operation will enable Hainan to adopt higher-standard opening-up measures,” said Cai Ping of the National Development and Reform Commission, emphasizing that the benefits will extend beyond the island to China’s wider reform agenda.
At the heart of the changes is a dramatic expansion of Hainan’s zero-tariff policy. The proportion of tariff-free product lines will leap from 21 percent to 74 percent, while the number of items eligible for duty-free treatment will rise from about 1,900 to roughly 6,600.
Goods processed in Hainan with at least 30 percent value added will qualify for tariff-free entry into mainland China. Some products currently restricted or banned across the country will also be allowed in the province under the new framework.
“This is not just about removing tariffs, it is about building an institutional foundation for the free and efficient movement of goods, capital, and people,” explained Wu Jingfang from the Ministry of Finance. The ministry expects these incentives to cut business costs, attract global companies, and foster industrial clusters.
Officials acknowledge that launching an island-wide customs system is a complex endeavour with no existing blueprint. It requires coordinated reforms in tax policy, regulatory oversight, and risk management to ensure the smooth flow of trade while safeguarding national interests.
The plan includes reforms to corporate and personal income taxes aimed at attracting top talent and multinational enterprises, alongside a broader list of zero-tariff products to encourage investment.
Hainan’s appeal to foreign investors has already surged. Between 2020 and 2024, the island attracted more overseas capital than it did in the entire 32 years since it became a province. Over the same period, its goods trade expanded at an average annual rate of more than 30 percent.
Analysts say these results demonstrate the island’s potential to become a model for trade liberalization in Asia. “The customs shift sends a powerful signal that China remains committed to deepening its integration into the global economy,” said Guo Da, executive director of the China Institute for Reform and Development.
The move comes at a time when protectionism is on the rise and global trade rules are under strain. By pushing ahead with the Hainan reforms, China is betting on openness as a competitive advantage.
The Ministry of Commerce has pledged to help the province align with high-standard international trade rules, strengthen institutional openness, and nurture new industries through targeted policies.
“With independent customs operations, Hainan will not just be an island, it will be a gateway for China’s new era of openness and innovation,” Cai said.
As the countdown to December 2025 begins, Hainan’s transformation stands as both a domestic reform experiment and a bold message to the world, China intends to remain an active, engaged player in global trade, and its southernmost province will be on the front line of that ambition.