Beginning January 1, 2026, a series of new national regulations came into force. Covering taxation, finance, education, public security, technology, and judicial procedures, these measures may affect different aspects of life depending on individual circumstances, including your finances, travel, credit record, and access to public services.
The following sections outline the major regulatory changes and provide guidance on how each may impact foreign residents living in Hainan.
1. The Value-Added Tax Law Comes Into Effect
The Value-Added Tax Law of the People’s Republic of China and its Implementation Regulations came into effect on January 1, 2026. The regulations consist of six chapters and include the following major provisions:
Clarifying taxpayers and the scope of taxation, making it clearer who must pay VAT and under what circumstances.
Specifying applicable tax rates, including situations such as zero-rated exports.
Defining calculation methods for taxable amounts under different circumstances, and detailing the types of VAT deduction certificates and methods for deducting input tax.
Improving tax incentives, setting specific standards for VAT‑exempt items under the VAT Law, requiring timely public disclosure of preferential policy criteria, and mandating timely reporting of implementation results.
Strengthening tax collection and administration, standardizing procedures for tax payment timing, invoice issuance, tax refund management, and related processes.
Relevance for Expats in Hainan
Moderate relevance.
This matters primarily to expats who:
operate a business in Hainan
freelance or invoice clients
engage in import/export activities
work in finance, accounting, or compliance
For expats with only personal income, the impact is minimal.
2. VAT Exemption for Personal Home Sales After Two Years
According to the announcement jointly issued by the Ministry of Finance and the State Taxation Administration, beginning January 1, 2026:
Individuals (excluding general taxpayers among individual businesses) who sell residential property purchased less than two years ago must pay VAT at a 3% collection rate on the full sales amount. (This rule applies to ordinary individuals selling their own residential property. It does not apply to individual business owners who are registered as general VAT taxpayers.)
Individuals who sell residential property purchased two years or more ago will be exempt from VAT.
For personal home sales occurring before January 1, 2026, where VAT has not yet been declared or paid, cases that meet the requirements of this announcement may be processed in accordance with its provisions.
Relevance for Expats in Hainan
High relevance, if you own property.
Foreigners can buy one property in Hainan after meeting residency/work requirements.
This rule affects:
expats planning to sell property
long-term residents considering buying
investors evaluating resale timelines
Renters are not affected.
3. One-Time Credit Repair Policy: Rebuilding Personal Credit
Under arrangements released by the People’s Bank of China, beginning January 1, 2026, the Credit Reference Center will automatically adjust relevant overdue records based on repayment circumstances. Qualified overdue records will no longer appear in personal credit reports.
This applies when all three of the following conditions are met:
1. The overdue information was generated between January 1, 2020, and December 31, 2025.
2. The overdue amount for an individual record does not exceed 10,000 yuan.
3. The overdue debt is fully repaid on or before March 31, 2026.
Relevance for Expats in Hainan
Moderate relevance.
Expats with Chinese credit histories, such as those who:
hold Chinese credit cards
have bank loans
use installment plans for phones or electronics
may benefit from this one-time cleanup.
Expats without Chinese credit records are unaffected.
4. Kindergarten Fees Must Be Itemized and Publicly Disclosed
The Notice on Improving Kindergarten Fee Policies came into effect on January 1, 2026. The notice specifies:
Childcare, education, and accommodation fees for public, inclusive, and other non-profit private kindergartens will follow government‑guided pricing.
The same fees for, for‑profit private kindergartens, as well as service charges and incidental fees for all types of kindergartens, will follow market‑based pricing.
A directory-based fee management system will be implemented, establishing two lists:
one for local service and incidental charges,
and one for each kindergarten’s own fees.
Fees not included in the directory or not publicly disclosed may not be charged.
Relevance for Expats in Hainan
High relevance for families.
This directly benefits expat parents by:
preventing hidden or unauthorized fees
ensuring transparent pricing
standardizing charges across public and private kindergartens
This is especially useful in Haikou and Sanya, where many expat families enroll children in local kindergartens.
5. Regulating Language and Character Use in Cyberspace
The newly revised Law on the Standard Spoken and Written Chinese Language came into effect on January 1, 2026. The revision:
Strengthens education in the standard national language.
Promotes innovation in information technologies related to the standard language.
Introduces stricter norms for language and character usage in cyberspace.
Designates the third week of September each year as the National Standard Spoken and Written Chinese Language Promotion Week.
Relevance for Expats in Hainan
Low to moderate relevance.
This does not impose obligations on foreigners.
However, it may influence:
school language policies
signage and public communication
online content moderation on Chinese platforms
Useful to be aware of, but not a major daily-life change.
6. Penalties for Exam Cheating, Unauthorized Drone Flights, and Other Behaviors
The revised Law on Penalties for Administration of Public Security came into effect on January 1, 2026. It incorporates newly emerging behaviors affecting public order and further refines procedures for handling public security cases.
Behaviors that may face penalties include:
Exam cheating
Organizing or leading pyramid schemes
Acts harming the protection of heroes and martyrs
Interfering with the normal operation of public transportation (i.e. by seizing control of driving mechanisms)
Releasing airborne objects carrying open flames
Throwing objects from height
Unauthorized (“black flight”) drone operations
Failing to take safety measures for animals, resulting in the animal injuring others
Relevance for Expats in Hainan
Medium to high relevance.
This matters if you:
fly drones (very common among photographers in Hainan)
own pets
participate in large events or gatherings
Drone rules in particular are strictly enforced in coastal and airport-adjacent areas.
7. Electric Vehicle Driving Range to Increase by About 7%
The national standard Limits for Energy Consumption of Electric Vehicles, Part 1: Passenger Cars will be implemented on January 1, 2026. It is the world’s first mandatory standard limiting electric energy consumption for electric vehicles.
After implementation:
Manufacturers must upgrade newly produced models to meet the new requirements.
For a vehicle weighing around two tons, the standard requires electricity consumption per 100 km to not exceed 15.1 kWh.
With technical upgrades and unchanged battery capacity, the average driving range of electric vehicles is expected to increase by about 7%, significantly improving the driving experience.
Relevance for Expats in Hainan
Moderate relevance.
Many expats in Hainan drive EVs (BYD, Tesla, NIO).
This affects:
new EV purchases
expected range improvements
potential price adjustments
Existing vehicles are not affected.
8. Strict Control of New Cars Exported as “Used Cars”
The Ministry of Commerce and three other departments jointly issued the Notice on Further Strengthening the Management of Used Car Exports.
The notice:
Strictly prohibits exporting new cars under the guise of used cars.
Standardizes the application and issuance of export licenses.
Establishes a dynamic management and exit mechanism for enterprises.
Beginning January 1, 2026:
For applications to export vehicles registered for 180 days or less, local commerce authorities must guide enterprises to submit a Confirmation of After‑Sales Maintenance Service issued by the vehicle manufacturer.
Relevance for Expats in Hainan
Low relevance for most.
This matters only if you work in:
automotive trade
logistics
export businesses
It does not affect personal car ownership or domestic sales.
9. New Cybersecurity Law Adds AI Risk Monitoring and Safety Regulation
The amended Cybersecurity Law of the People’s Republic of China came into effect on January 1, 2026. To address the needs of AI governance and development, the amendment:
Supports basic theoretical research and key technology R&D in artificial intelligence, including algorithms.
Promotes the development of infrastructure such as training data resources and computing power.
Strengthens AI ethical standards.
Enhances risk monitoring, assessment, and security regulation.
Promotes the application and healthy development of AI.
Relevance for Expats in Hainan
Moderate relevance.
This affects expats who:
work in tech, AI, or data-related industries
operate businesses using Chinese digital platforms
rely heavily on cloud or AI services
For everyday users, the impact is indirect.
10. Online Virtual Property Disputes Added as Civil Case Causes of Action
The amended Provisions on Causes of Action for Civil Cases came into effect on January 1, 2026. A cause of action summarizes the nature of the legal relationship in dispute between the parties.
The new amendment:
Adds causes of action related to data and online virtual property.
Refines causes of action related to intellectual property.
Improves causes of action for competition disputes and commercial disputes.
Improves causes of action involving rural collective economic organizations and farmers’ specialized cooperatives.
Enhances causes of action in areas of public concern, including new forms of employment and protection of the rights and interests of the elderly.
The total number of causes of action now reaches 1,055.
Relevance for Expats in Hainan
Moderate relevance.
Expats can be parties to civil cases in China.
This update matters if you are involved in:
online platforms
digital assets or virtual property
employment disputes
commercial or IP-related activities
It reflects a more detailed and modernized legal framework.
Related article: 2026 China Public Holiday Schedule: Key Dates to Know
