Hainan Free Trade Port, from blueprint to reality, stands as a vivid reflection of China's commitment to openness. Since the new era began, China has focused on developing pilot free trade zones and free trade ports, breaking down institutional barriers, reducing trade costs, and facilitating the flow of production factors, thereby creating new opportunities for the global economy. Let us trace the timeline and witness China’s unwavering steps toward openness.
By 8 a.m., Yangpu Port is already bustling. Goods like coconuts from Southeast Asia and timber from South America are being unloaded—some destined for mainland China, others for processing on the island before distribution nationwide. Behind this routine operation, a significant change is about to take place. Two kilometers away, customs officials at Yangpu are working intensively.
Fu Zhenkun, a staff member at Yangpu Customs’ Comprehensive Business Division, explains: "We’ve been very busy these days as free trade port policies are being rolled out. More businesses are applying for preferential treatment benefits, and we’re currently reviewing their qualifications. After the customs closure on December 18, they’ll be able to import goods with zero tariffs."
With Hainan Free Trade Port’s customs closure imminent, the scope of zero-tariff imports will expand from the current 1,900 tariff lines to approximately 6,600. Fu’s primary responsibility is reviewing applications for processing value-added tax exemptions, a policy that brings substantial benefits to local enterprises.
"Nearly 1,000 companies in Yangpu alone have applied in the past two to three weeks," Fu notes. "I can feel the system becoming more open, and we’re continuously exploring new approaches in our work."
From the release of the *Hainan Free Trade Port Construction Master Plan* in June 2020 to the historic moment of island-wide customs closure, five years have seen a series of pioneering reforms implemented. Looking further back to 2013, when China’s first pilot free trade zone—Shanghai FTZ—was established, the journey has evolved from single-point breakthroughs to comprehensive exploration, each step marking China’s determination to expand high-level openness.
Recently, Tesla’s Gigafactory in Shanghai’s Lingang New Area, part of the Shanghai FTZ, celebrated the rollout of its 4 millionth vehicle. The factory now accounts for nearly half of Tesla’s global electric vehicle deliveries. Additionally, its supply chain localization rate exceeds 95%, supporting over 100,000 jobs.
Grace Tao, Tesla’s Global Vice President, recalls: "After entering China, we considered whether to build a factory here. The Shanghai FTZ’s policy lifted equity restrictions on foreign-funded new energy vehicle companies. This open-door policy led Tesla to establish its first overseas production base in China."
With the "negative list" continuously shrinking, innovative measures like "express approval," "tolerance for missing documents," and "parallel review" have been implemented in Lingang. In February this year, Tesla’s Shanghai Energy Storage Gigafactory, now operational, set a new benchmark for "Lingang speed."
Xi Tao, a researcher at Lingang’s High-Tech Division, reflects: "Through Tesla’s case, we developed a set of best practices. The shrinking negative list and Tesla’s entry demonstrate China’s courage and resolve in expanding openness and deepening reforms."
The march of openness has never stopped, and institutional innovation continues. Over the past decade, China has established 22 pilot free trade zones, forming a nationwide reform and opening-up framework covering coastal, inland, and border regions.
Each region leverages its strengths: Tianjin, capitalizing on shipping advantages, has become the world’s second-largest aircraft leasing hub. Zhejiang’s Zhoushan is rapidly building a trillion-yuan oil and gas industrial chain. From "a single blossom" to "a hundred flowers in bloom," China’s FTZs have promoted 485 institutional innovations by September this year.
Zhang Jianping, Deputy Director of the Academic Committee at the Ministry of Commerce’s Research Institute, states: "Pilot free trade zones serve as testing grounds for bold experimentation, while Hainan Free Trade Port represents an even higher level of openness. These pilot initiatives have become a crucial part of China’s institutional opening, fostering deeper integration between China and the world and strengthening the global multilateral trade system."
At a recent State Council press conference, key announcements related to Hainan’s island-wide customs closure sent a clear signal of China’s commitment to openness. From the bold experiment of the first FTZ to the emergence of Hainan Free Trade Port—China’s only free trade port—the door to openness is widening.
As Hainan prepares for full customs closure, the island is poised to advance steadily in regional and global economic landscapes. This marks not only a new exploration of China’s higher-level institutional openness but also a fresh starting point for China on the global stage.
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