On Feb. 2, the Hainan Free Trade Port’s pilot policy exempting import tariffs on products with 30% or higher value added after processing has been expanded to cover the entire FTP. Since the measure was originally implemented, products valued at over 6.7 billion yuan have been imported under the zero tariff policy, saving companies around 540 million yuan in exempted tariffs. The resulting benefits enjoyed by importers have served to add fresh vitality to the high quality development of the Hainan Free Trade Port.
An aerial view of Haikou Port, a vital trade hub in south China's Hainan Province. (Photo: Hainan Daily)
As an important component of the Hainan Free Trade Port policy system, the benefits provided by the value added zero tariff policy far outstrip those of the traditional customs special supervision area domestic sales alternative tariff policy. The value added zero tariff policy is mainly applicable to raw materials or the trade of processed commodities with high tax rates, promoting the development of the high-end processing and manufacturing industries of Hainan through domestic and international markets and resources.
In order to speed the process, many Hainan departments have linked up, taking action to deepen the application of the value added zero tariff policy, encouraging more companies to participate in the value-added processing pilot program and expanding the scope of policy benefits. In this way, the ‘walled garden’ of the original pilot program will become a ‘lush forest’ filling the entire island, and the beneficial policy will turn into a development advantage. In July, 2021, the value added zero tariff policy was first implemented in the Yangpu Free Trade Zone, and then gradually expanded to the other customs special supervision areas and 13 key industrial parks of Hainan province. Now, the policy has been expanded to cover all of the Hainan Free Trade Port in accordance with the principle of ‘not limiting the policy to Authorized Economic Operators or key industrial parks’.
“At present, there are 106 value-added processing enterprises in Hainan Province,” said Haikou Customs. Over the past four years, the policy has benefited a variety of enterprises, including those in the production and manufacturing of grain & oil, meat, aquatic products, medical devices, diamond jewelry, and new high-performance materials, spurring their rapid development and industrialization.
Haikou Customs, along with the Hainan Provincial Department of Commerce, has set up an online processing value-added pilot declaration system. The time required for approval of applications has been shortened from 2-3 months to only 18 working days, allowing enterprises better, faster access to the policy benefits of the Hainan Free Trade Port.
This year, special customs operations will be anchored, further deepening the pilot of Hainan’s ‘open first line and controlled second line’ import-export policy and intensifying the pressure test of the policy system, business process, system function, risk prevention & control, and guarantee mechanisms of the FTP. This will allow more companies to enjoy the benefits of Hainan’s policies and strengthen industry clusters, accelerating the transformation of beneficial policies into development advantages and making the rapid development of the FTP’s industries into a brightly shining beacon welcoming companies from around the world to do business here in Hainan.
Jointly produced by the Office of the Free Trade Port Working Committee of the CPC Hainan Provincial Committee and the Hainan International Media Center