The Ministry of Finance, the General Administration of Customs and the State Tax Administration have jointly announced a “zero‑tariff” policy for imported goods purchased by residents inside Hainan Free Trade Port. Residents who buy qualifying imported goods at designated duty‑free shops will be exempt from import duties, import‑stage and domestic‑stage value‑added tax and consumption tax, subject to a positive list and an annual per‑person cap of RMB 10,000.
The policy defines eligible island residents as Chinese citizens holding a Hainan ID card, Hainan residence permit, or Hainan social security card, as well as foreign nationals living and working in Hainan with valid residence documents. Purchases may be made in‑person and without limit on the number of transactions, but goods must be taken away on site and are strictly for personal use; resale is forbidden.
Officials framed the measure as part of implementing the Hainan Free Trade Port Law and the central government’s overall scheme for developing Hainan as a pilot free‑trade and consumption hub. The list of covered goods — and its duty‑free quota framework — will be managed dynamically by the three central agencies in coordination with other departments, allowing adjustments to reflect local needs and regulatory capacity.
Customs will supervise the designated duty‑free shops and the covered products, and normal rules for import licences, registrations or registrations‑by‑filing still apply when relevant. Duty‑free concessionaires must pay franchise fees to the state and secure approval through Hainan provincial procedures; their operating approvals and shop registrations will be filed with the three central agencies.
The central notice places clear responsibility for anti‑smuggling and risk control on Hainan’s provincial government. The province is authorised to take targeted purchase restrictions, deploy tracing and information systems, and pursue violators. Individuals caught reselling, purchasing on behalf of others or smuggling will be barred from buying zero‑tariff goods for three years and may be added to a public credit record; criminal liability will follow for conduct that meets the threshold for smuggling.
Implemented from the date of publication, the measure is modest in scale but symbolically important: the RMB 10,000 annual cap limits the policy’s fiscal and market disruption while signalling Beijing’s intent to deepen liberalisation experiments within constrained boundaries. For consumers and the local duty‑free industry, the announcement converts a political priority — building Hainan into a duty‑free consumption magnet — into an immediate commercial opportunity.
The policy will interact with existing channels such as bonded zones, cross‑border e‑commerce and airport duty‑free, raising questions about displacement, enforcement complexity and revenue trade‑offs. Hainan’s authorities will need to demonstrate effective monitoring to prevent diversion of goods to the mainland and to contain smuggling, or risk undermining the central objective of attracting genuine on‑island consumption and tourism.
For international observers and businesses, the move is another incremental liberalisation step rather than a wholesale opening: it eases taxation on a controlled subset of imports for a defined resident population while preserving licensing rules, product lists and robust enforcement powers. The combination of liberalised consumption incentives and tight regulatory guardrails reflects Beijing’s broader strategy of cautious, managed experimentation in trade and market opening.