Hainan FTP opens fast lane

The "first line" allows for freer access between Hainan and regions outside China's customs territory. The proportion of zero-tariff product lines has now surged from 21 percent to 74 percent, covering about 6,600 items.

The "second line" maintains regulated access with standard customs controls for goods entering China's mainland from Hainan, while a key incentive allows goods produced in Hainan, or those using imported materials with at least 30 percent value-added processing on the island, to enter the mainland exempt from import tariffs.

Businesses promptly acted to harness the new policy advantages, aiming to drive growth and enhance competitiveness.

Siemens Energy became the first foreign-invested enterprise to register, receiving its business license in Danzhou, Hainan.

"With the free trade port option, we have the chance to optimize our logistic processes and to reduce administration effort and make everything faster," said Lars Voelker, general manager of Siemens Energy (Hainan).

The company simultaneously broke ground on a new gas turbine assembly base and service center. The facility, scheduled for completion in 2027, is designed to create an integrated business system covering assembly, validation and maintenance for domestic and overseas markets.

Zhang Xiangchen, deputy director-general of the World Trade Organization, said, "This initiative brings tangible policy dividends, but we place greater value on its role in driving systemic innovation.

"These opening-up measures are not isolated adjustments, but interconnected measures spanning trade, taxation and financial services," Zhang said. "The island serves as a testing ground. It allows us to identify potential issues and make adjustments, thereby reducing risks when scaling reforms nationwide."

More important, amid a wave of de-globalization around the world, China continues to advance its opening-up, optimizing the business environment for global investment and contributing to fostering an open world economy, he added.

Analysts also noted that the island's unique geographic and policy profile makes it a critical nexus designed to strengthen China's role as a linchpin of regional trade and investment.

Positioned at the geographic heart of the Regional Comprehensive Economic Partnership, the world's largest trade group to date, Hainan is being groomed as a critical conduit for closer economic ties with participating economies, particularly the Association of Southeast Asian Nations, said Chi Fulin, president of the China Institute for Reform and Development.

In the past five years, the RCEP contributed three times as much to global economic growth as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the European Union combined, according to Chi.

For ASEAN exporters, Hainan will be a low-tariff entry point into the vast Chinese consumer market. For manufacturers and service providers operating on the island, it is a potential springboard into RCEP markets, with supportive logistics and financial services, Chi said.

Zhu Jianmin, chairman of Oxiranchem Group, highlighted the efficiency of Hainan's business environment. Despite challenges, the company had completed and put into operation in Hainan its Yangpu International Container Port-based project by the end of 2023.

"The Hainan FTP's tax policies, unique geographic location and logistics advantages have enabled us to source raw materials globally and target ASEAN markets effectively," Zhu said.

Contact the writers at wangkeju@chinadaily.com.cn