The Hainan Free Trade Port officially launched its island-wide customs closure operation on December 18, marking a new phase in China's highest-level opening-up initiative. Through its unique customs supervision system—"relaxed first-tier controls, tightened second-tier controls, and freedom within the island"—the Hainan Free Trade Port has demonstrated profound influence in optimizing regional supply chains, aligning regulations, and fostering market integration. This not only reaffirms China's commitment to high-level openness and sharing development opportunities with the world but also significantly accelerates the process of East Asian regional economic integration.
The core advantages of Hainan's customs closure operation lie in the dual benefits of policy and geographical advantages. On the policy front, the proportion of "zero-tariff" goods has surged from 21% before the closure to 74%, covering approximately 6,600 tariff lines. Additionally, corporate and individual income taxes are set at a preferential rate of 15%, substantially reducing business operating costs. This institutional design positions Hainan as a "cost depression" and "policy highland" connecting China's domestic market with East Asian regional markets. For instance, the policy of exempting tariffs on processed and value-added domestic sales, combined with the Rules of Origin under the Regional Comprehensive Economic Partnership (RCEP), allows companies to include value-added processing of raw materials from ASEAN countries in Hainan toward tax-free thresholds. This creates a new industrial chain model: "Southeast Asian raw materials—Hainan processing—domestic China market distribution," significantly enhancing the resilience of regional supply chains.
Geographically, Hainan is strategically located at the crossroads of the South China Sea, serving as a critical node for multiple international shipping and air routes. Within a 4-hour flight radius, it covers 21 Asian countries and regions, encompassing about 47% of the global population and 30% of global GDP. This geographical advantage naturally positions Hainan as a bridge for East Asian regional economic cooperation, providing foundational conditions for its role as an open gateway. Post-closure, Hainan can further strengthen regional connectivity through optimized shipping networks. The Hainan Free Trade Port is set to become a strategic hub for practical China-ASEAN blue economy cooperation, aligning with the shared needs of regional countries and contributing to the security and stability of regional industrial and supply chains. For example, the direct shipping route from Yangpu Port to Indonesia's Batam Port has reduced transportation time from 20 days to 6 days, significantly lowering logistics costs and delivering direct benefits to businesses. The total capacity of international vessels registered under the "China Yangpu Port" flag has risen to the second-highest in the country, driving the clustering of modern service industries such as ship financing and marine insurance. This efficient logistics system, combined with free trade port policies, provides East Asia with more convenient and secure trade channels, reducing over-reliance on traditional hub routes and promoting diversification in regional trade patterns.
The customs closure operation also facilitates the alignment and innovation of regional rules and standards in East Asia. Through proactive alignment and stress testing, Hainan can drive the convergence of regional regulations and standards, serving as a "testing ground" for high-standard international economic and trade rules. Particularly in emerging fields such as digital economy and green trade, Hainan's pilot initiatives can offer practical regulatory references for negotiations on regional agreements like the China-ASEAN Free Trade Area 3.0, effectively lowering the trial-and-error costs of regional rule alignment. This "pilot-evaluate-scale-up" mechanism provides a practical pathway for East Asia to transition from traditional commodity-and-factor-flow openness to higher-level institutional openness.
The customs closure operation further signals China's commitment to promoting cooperation through openness. Amid challenges posed by unilateralism, protectionism, and fragmented supply chains in some countries, the Hainan Free Trade Port injects new momentum into global trade cooperation. Its unilateral opening policies underscore China's determination to share the benefits of its vast market. Data shows that trade between Hainan and other RCEP member states is steadily expanding, industrial cooperation is deepening, and policy dividends are being realized. In 2024, Hainan's trade with ASEAN reached 57.91 billion yuan, a year-on-year increase of 62.3%, with ASEAN remaining Hainan's largest trading partner for six consecutive years. This growth trend demonstrates that Hainan is attracting regional factors through market openness rather than building competitive advantages through barriers.
The customs closure operation of the Hainan Free Trade Port is a major reform and opening-up initiative for China and a catalyst for accelerating East Asian regional economic integration. Through policy innovation, geographical advantages, and rule alignment, it promotes the transition from commodity-flow openness to institutional openness, offering a new paradigm for building a more inclusive and resilient East Asian economic and trade ecosystem. In this process, China, ASEAN, and the broader Asia-Pacific region are poised to achieve deeper integration of interests, jointly addressing global challenges and moving toward a mutually beneficial future.
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