The imminent island-wide customs closure of the Hainan Free Trade Port, a landmark initiative in China's high-level opening-up, has drawn widespread attention from the global business community. Recently, multiple international industry organizations, commercial entities, and financial institutions have discussed the opportunities arising from this development from various market and sector perspectives.
Zoran Čadež, President of the Serbian Chamber of Commerce, stated in an interview that the Hainan Free Trade Port is committed to boosting consumption, services, and innovation through clear policy support and long-term tax incentives to attract more domestic and international resources. He emphasized that the island-wide customs closure will have comprehensive positive impacts.
Čadež noted that for Serbia, which has already signed a free trade agreement with China, the full customs closure of Hainan presents a new opportunity to engage with Chinese consumers and establish fresh investment and technological partnerships. "We will work with our counterparts in the Chinese Chamber of Commerce to build this partnership," he added.
Upon implementation, the Hainan Free Trade Port will adopt a liberalized and facilitated policy framework characterized by "first-line liberalization, second-line regulation, and free movement within the island." Čadez views this as a significant step in China's commitment to expanding openness, demonstrating its willingness to broaden free trade space, stabilize global supply chains, and contribute to an open world economy.
Mohammed Al Zarooni, Chairman of the World Free Zones Organization, headquartered in Dubai with over 1,600 members across 140+ countries, believes Hainan's successful practices highlight the importance of institutional innovation, green economy, digital transformation, and global cooperation, showcasing its vast development potential.
An analysis by the Financial Times' FDI Intelligence pointed out that the Hainan Free Trade Port will serve as a "bridge and testing ground for piloting liberalization in imports/exports, investment, talent, and data flows," aiming to become a gateway for foreign companies entering and expanding in China.
Morgan Stanley's research report projects that post-closure, "the range of duty-free goods in Hainan will surge from the current 1,900 items to approximately 6,600, covering nearly 74% of categories." This is expected to benefit off-island duty-free and travel retail enterprises.
The "Hainan Free Trade Port Travel Retail Whitepaper 2025," co-published by KPMG China and Moody's Analytics, suggests that as customs policies take effect, tax reforms and a dual-track retail model will drive market growth and create more opportunities for domestic and international retailers.
The U.S. Department of Commerce’s International Trade Administration noted in its market analysis of Hainan’s financial services that the province, as a pilot zone for China’s financial opening, is further liberalizing its financial sector through free trade accounts, diversified cross-border investment policies, and tax incentives to facilitate capital flows.
Since the release of the "Master Plan for the Construction of Hainan Free Trade Port" in 2020, international capital has demonstrated confidence in Hainan. Over the past five years, the province attracted RMB 102.5 billion in actual foreign investment, with an average annual growth of 14.6%. Newly established foreign-funded enterprises totaled 8,098, growing at 43.7% annually, while foreign direct investment from 176 countries and regions expanded by 97% per year—figures underscoring Hainan’s global appeal.
The international business community widely regards Hainan’s customs closure as a pivotal move by China to provide certainty through institutional openness and share market opportunities, potentially injecting new momentum into global economic and trade cooperation.
Comments