Key Highlights of the Customs Reform
China will launch a new customs regime in the Hainan Free Trade Port (FTP) on 18 December 2025, creating a self-contained customs zone with zero tariffs on many goods. The policy is intended to make Hainan a key trade and investment hub between China and global markets.
The Main Changes
- Zero tariffs on imports:
Most goods brought into Hainan from abroad will be exempt from import duty, VAT, and consumption tax, unless listed as restricted. The rule applies to registered companies and approved institutions in the FTP. - Zero tariffs on exports to the mainland:
Goods produced in Hainan using imported materials can enter the Chinese mainland duty-free if at least 30% of their value is added locally.
Basic processing such as packaging doesn’t qualify, and import VAT and consumption tax will still apply. - Digital customs:
A new “International Trade Single Window” and electronic tracking system will manage trade and simplify customs procedures.
Why It Matters
For manufacturers and logistics firms, the policy could lower costs and ease access to China’s market.
Hainan offers duty-free imports, faster clearance, and a strategic position for operations serving Asia.
However, firms must meet strict value-added and documentation rules, and all trade with the mainland will still pass through customs controls.
Outlook
Hainan’s new framework is part of China’s wider effort to test freer trade within a controlled environment.
If it works, it could serve as a model for future reforms — and a new entry point for British businesses looking to expand in China.
