Hainan FTP gains momentum, underscoring China's commitment to opening up

Workers inspect an aero engine at a repair facility in the comprehensive bonded zone of Haikou Airport in Haikou, south China's Hainan province, June 18, 2025. (Photo/Su Bikun)

China's Hainan Free Trade Port (FTP) will officially launch an island-wide independent customs operation on December 18, 2025. This milestone in the development of the Hainan FTP sends a clear and unequivocal message to the world: China remains steadfast in its commitment to expanding high-level opening up, even amid rising protectionist headwinds.

The establishment of the Hainan FTP is a major reform and opening-up initiative personally planned and advanced by Chinese President Xi Jinping. Over the past seven years, the FTP has steadily taken shape, leveraging the advantages of China's vast domestic market while aligning with high-standard international trade rules. It has increasingly become a focal point for both domestic and global investors.

As a hallmark of China's reform and opening up in the new era, the Hainan FTP is emerging as a pioneering platform of institutional innovation, a hub for regional cooperation, and a new engine for global economic integration. It embodies China's readiness to share its development opportunities and work in partnership with the rest of the world.

Consumers shop at a duty-free mall in Haikou, south China's Hainan province, July 15, 2025. (Photo/Su Bikun)

The launch of independent customs operations does not imply isolation; rather, it marks a deeper level of opening up. The number of tariff items eligible for zero-tariff treatment will expand to around 6,600 - about 74 percent of all tariff items - representing a sharp increase of nearly 53 percentage points. A targeted, low-intervention regulatory model will be adopted, featuring streamlined supervision for zero-tariff goods and goods under relaxed management.

Two distinct customs "lines" will facilitate these operations. The "first line" will connect the Hainan FTP with economies outside China's customs territory, enabling the smooth flow of zero-tariff goods through simplified policies. The "second line" will link the FTP with the Chinese mainland, where tailored oversight will help safeguard the broader domestic market. Within the FTP, zero-tariff goods and processed products can be stored without time restrictions, offering businesses greater operational flexibility.

The Hainan FTP will also introduce more favorable tariff policies, simplified trade measures, improved travel and logistics procedures, and targeted regulatory oversight. With both institutional "software" and physical "hardware" in place, Hainan is set to become a modern, globally connected hub of vitality and openness, injecting strong momentum into China's high-quality development and setting a benchmark for higher-level opening up.

Unlike traditional opening-up models that primarily focus on the flow of goods and production factors, institutional opening up – centered on rules, regulations, management, and standards - represents a higher standard of openness. The Hainan FTP is designed to align with the most advanced open economies in the world, providing a more stable and predictable regulatory environment and broader opportunities for businesses worldwide.

The results are already evident. In 2024, despite global economic uncertainties, the number of newly registered foreign-invested firms in Hainan exceeded 2,000, representing a year-on-year increase of approximately 20 percent. At the 2025 Global Industrial Investment Promotion Conference for the Hainan Free Trade Port held in April, 265 projects were signed with a combined contract value of roughly 233.6 billion yuan ($32.44 billion). To date, investors from 176 countries and regions have entered the Hainan market, and the province's economic openness has reached 35 percent. This continued inflow of global capital underscores the international business community's confidence in China's high-level opening up.

At a time when unilateralism and protectionism are on the rise and economic globalization is encountering severe challenges, China's determination to remain open is particularly significant.

Since the launch of its first pilot free trade zone (FTZ) in Shanghai in 2013, China has leveraged FTZs and the Hainan FTP to dismantle institutional barriers, reduce trade costs, and enhance the free flow of resources. Institutional opening up has thus become increasingly substantive, providing fresh momentum for global economic growth and creating new opportunities for win-win cooperation.

China continues to shorten its negative list for foreign investment and expand its global network of high-standard free trade agreements. As the breadth, depth, and quality of its opening up increase, the benefits of reform and opening up are being shared more widely with the world.

Time and again, facts have demonstrated that China's pursuit of high-level opening up is not a short-term tactic, but a strategic choice aligned with global development trends and the country's long-term development goals. China was, is, and will remain an attractive, safe, and promising destination for global investors.

The rise of the Hainan FTP offers a vivid testament to China's evolving model of opening up. Looking ahead, China will continue to pursue high-level opening up as a driver of high-quality growth and will contribute even more actively to building an open world economy and a community with a shared future for mankind.