Recently, "Hainan closed" has become a buzzword, but many people hear "closed", thought it was "closed". In fact, the opposite is true - the closure is not the closure of the island, but a greater degree of openness.

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What is "sealing"?

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Simply put, customs sealing refers to the establishment of the entire island of Hainan as a special area for customs supervision and the implementation of "Liberalization of the first line, control of the second line, freedom of the island" policy.

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• frontline(between Hainan and abroad): freer entry and exit of goods and people, such as faster customs clearance for imported goods;
• second-tier(between Hainan and the mainland): only some special goods need to be inspected, ordinary people traveling to and from Hainan do not need additional documents, business trips and travel as usual;
• Island Freedom: Within Hainan Island, the movement of goods, capital and people is more convenient.

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Why December 18th?

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The launch of the sealing operation was scheduled for December 18, which is of great symbolic significance. This is the day of the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China (CPC) in 1978, marking the beginning of China's reform and opening up. The choice of the same date to start the Hainan customs sealing operation is to demonstrate to the world China's unswerving determination and confidence in expanding a high level of openness.

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Planning for the future

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• 2025: Initial establishment of a free trade port policy system;
• 2035: Institutional and operational models become more mature;
• By the middle of this century: a high-level free trade port will be built.

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Continuous upgrading of the duty-free policy for outlying islands

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After the closure of the island, Hainan will continue to implement the island duty-free shopping policy, and the preferential strength will be further expanded.

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Starting from November 1, 2024, Hainan's duty-free shopping policy for outlying island travelers has been adjusted to allow "outlying island and departing travelers" to enjoy the outlying island duty-free shopping policy.

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Imported "zero-tariff" commodities will be subject to negative list management, and the scope of the list will be expanded from the current 1,900 tariff lines to more than 6,600 tariff lines, accounting for about 74% of all commodity tariff lines.

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This means that more than 70% of imported goods will enjoy zero tariff treatment in Hainan, an increase of 53 percentage points over the pre-customs closure period.

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Will personal travel be affected?

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For people planning to travel to Hainan for tourism and business, the closure operation brings more convenience than restriction. Transportation and security procedures to and from Hainan Island remain basically unchanged.

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• Ordinary tourists traveling to Hainan do not need to apply for a 'customs clearance certificate', with ID cards can be normal passage;
• People from 86 countries can enjoy the visa-free policy, and 85 international direct flight routes make outbound travel more convenient. The multi-level visa waiver system includes 240 hours of visa-free transit;
• The 144-hour visa waiver for foreign tour groups from Hong Kong and Macao, and the 15-day visa waiver for foreign tour groups on cruise ships have significantly enhanced Hainan's international appeal;
• Express shipments to the Mainland will not be affected, and only special cargoes will be subject to inspection.

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What opportunities will there be for businesses?

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After the closure of the whole island, the main body of the import "zero tariff" benefit will basically cover all kinds of enterprises, institutions and private non-enterprise units that have actual import demand on the whole island.

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Processing value-added products up to 30% is possible.Duty-free sale to the Mainland. This policy was initially applied only to enterprises in the grain, oil and meat industries within the special customs supervision zone; it has now been expanded to include production and processing areas outside the zone, such as pharmaceuticals, coffee and jewelry, which has brought development opportunities to a wider range of industries.

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More importantly, imported "zero-tariff" commodities and their processed manufactured products are no longer restricted to enterprises for their own use, but can be freely circulated among the beneficiary entities and are exempted from the payment of import taxes.

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Will Hainan become a "tax haven" after the closure?

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Hainan Free Trade Port implements competitive tax policies, with corporate income tax reduced to 151 TP3T, and qualified individuals exempted from the actual tax burden in excess of 151 TP3T.

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These policies are fundamentally different from "tax havens" - Hainan's "low tax rate" is based on the premise of compliance, and "zero tariff" is guaranteed by regulation. Zero tariff" is guaranteed by regulation.

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• Build an "open and orderly" tax environment through qualification of benefits, anti-avoidance provisions, transparency of information and strict anti-money laundering mechanisms;
• Although Hainan implements special policies, it remains within the national legal and macro-management framework;
• Real estate regulation and control will be city-specific, but the principle of curbing speculation and safeguarding residents' housing needs will not be shaken.

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Hainan also put what "hard work"?

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To ensure the efficient movement of goods and people after the closure, Hainan isBuilding a Smart Customs Clearance SystemThe

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• In the future, you can make an appointment through your cell phone, the channel is automatically diverted, general cargo passes directly, and supervised cargo is scanned intelligently, and the result can be issued in 2 minutes. In terms of infrastructure, the carrying capacity of the new port inspection yard has been increased by 30%.
• 3.2 kilometers of closed corridors connect to the port, ensuring unimpeded cargo flow and freedom from extreme weather.
• Hainan is also creating a "special medical zone", the introduction of global cutting-edge medicines and equipment to enhance the level of medical services.
• It also promotes the development of the digital economy, facilitates easier cross-border data flow, and is committed to becoming a China-ASEAN hub to pool global resources.

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The closure of Hainan is actually a sign of greater openness and convenience:

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• For tourists, traveling and shopping is more free;
• For businesses, lower taxes and more space;
• For the country, it is an important testing ground for a new round of reform and opening-up.

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In the future to go to Hainan, is no longer "out of the province", more like entering a "territory outside the customs" of the international convenience zone. Such Hainan, is a more open attitude to meet the global attention, are you ready?