Hainan sees higher levels of openness

As China's tropical island province of Hainan starts independent Customs operations by the end of the year, its level of openness is expected to reach new highs and benefit more foreign partners, said senior officials.

In line with the highest international standards of openness, the liberalization and facilitation of trade and investment have been the focal points for Hainan Free Trade Port, said Wang Bin, a senior official of Hainan province.

"We are gradually implementing China's most favorable tax policies, centered around zero tariffs and a simplified tax system," Wang said, adding that the port boasts China's shortest negative list for foreign investment access, largest catalog of encouraged industries, and first negative list for cross-border trade in services.

Wang made the remarks during a meeting on major trends of China's expanded opening-up held by the Center for China and Globalization on Friday.

Wang added that Hainan FTP also has dedicated international internet data channels covering key areas to meet the data needs of most sectors. Once special Customs operations come into effect this year, the region will further increase the convenience and freedom of trade and investment across the board, he said.

According to the latest government data, the number of new business entities established since the construction of the Hainan FTP has exceeded the total of the past 30 years, with 158 countries and regions investing in Hainan.

"Hainan FTP opens huge opportunities for cooperation between China, Indonesia, and other ASEAN member states and RCEP participating partners," said Djauhari Oratmangun, Indonesian ambassador to China, at the gathering.

In order to advance comprehensive strategic partnerships with China, Indonesia and ASEAN are expected to further increase economic cooperation, in particular, trade, investment and tourism with the country, Oratmangun said.

Hainan also has the lowest tax burden of any place on the Chinese mainland.

The current general corporate income tax rate on the Chinese mainland is 25 percent, while in the Hainan FTP, it is 15 percent, said Li Yufei, deputy director of the FTP's working committee. "Hainan serves as the most open place on the Chinese mainland to foreign investment," Li said.

As a result, the number of newly established foreign-funded enterprises has grown by an average of 57 percent annually, and paid-in foreign capital has grown by an average of 36 percent, government data showed. Its economic openness rate also increased from 17.3 percent in 2018 to 35 percent in 2024.

In a bid to strengthen economic ties with global trade partners and explore mutually beneficial cooperation mechanisms, the Hainan FTP has inked Global Free Trade Zone (Port) Partnership Initiative with 38 free trade zones (ports) worldwide, and signed cooperation memoranda with over one-third of pilot free trade zones in China, Wang added.

Boasting an advantageous location, the Hainan FTP is just four hours by plane from 21 countries and regions in Asia, encompassing roughly 47 percent of the global population and 30 percent of the world's GDP.

"Its location is conducive for both international firms looking to break into the Chinese market and Chinese companies seeking to go global … better fostering economic globalization and promoting the building of a community with a shared future for mankind," Wang said.