Hainan is the largest economic special zone in China, with unique advantages in implementing comprehensive deepening reforms and the highest level of open-door policies. Supporting Hainan in gradually exploring and steadily advancing the construction of a China-specific free trade port, and establishing a policy and institutional system for free trade port step by step and in stages, are major reform and opening-up initiatives personally planned, deployed, and promoted by General Secretary Xi Jinping. It is a strategic decision made by the Party Central Committee with a focus on both the domestic and international situations, through in-depth research, overall consideration, and scientific planning.
The world is undergoing a new round of major development, transformation, and adjustment. Protectionism and unilateralism are on the rise, and economic globalization is facing greater headwinds and setbacks. Building a free trade port in Hainan is the fundamental requirement for promoting high-level openness, establishing a new open economic system; it is the urgent need for deepening market-oriented reforms and creating a legal, international, and facilitative business environment; it is the strategic choice for implementing the new development concept, promoting high-quality development, and building a modern economic system; it is the practical action to support economic globalization and construct a community with a shared future for humanity.
To thoroughly implement the important speech spirit of General Secretary Xi Jinping at the grand meeting celebrating the 30th anniversary of the establishment of Hainan Province and the establishment of the economic special zone, to implement the requirements of the “Guiding Opinions of the CPC Central Committee and the State Council on Supporting Hainan’s Comprehensive Deepening of Reform and Opening Up,” and to accelerate the construction of a high-level free trade port with Chinese characteristics, this plan is formulated.
1. General Requirements
(1) Guiding Ideology:
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, comprehensively implement the spirit of the 19th National Congress of the Communist Party of China (CPC) and the second, third, and fourth plenary sessions of the 19th CPC Central Committee.
Adhere to the overall leadership of the Party, uphold the general principle of seeking progress while maintaining stability, adhere to the new development concept, adhere to high-quality development, coordinate the advancement of the “Five-Sphere Integrated Plan” and the promotion of the “Four-Pronged Comprehensive Strategy.”
Benchmark international high-level economic and trade rules, emancipate the mind, innovate boldly, focus on liberalization and facilitation of trade and investment, establish a policy and institutional system compatible with high-level free trade ports, construct customs supervision special areas with international competitiveness and influence, and build Hainan Free Trade Port into a distinct symbol and vital gateway for China’s new era of opening up to the world.
(2) Basic Principles:
Drawing on International Experience:
Adhere to high-level planning and construction, actively adapt to the new trends of international economic and trade rules reconstruction, fully learn from and draw on the advanced management methods and institutional arrangements of international free trade ports, form open policies and systems with international competitiveness, accelerate the establishment of a new open economic system, enhance regional radiation and driving force, and build Hainan into a forefront area deeply integrated into the global economic system.
Reflecting Chinese Characteristics:
Adhere to the centralized and unified leadership of the Party, adhere to the socialist path with Chinese characteristics, put the people at the center, practice the core socialist values, and ensure the correct direction of Hainan Free Trade Port construction. Give full play to the institutional advantages of nationwide coordination and concentration of efforts to do big things, mobilize the enthusiasm and creativity of all parties, gather high-quality production factors globally, focus on promoting institutional innovation, nurturing growth momentum, and constructing a comprehensive open new pattern, providing solid support for achieving national strategic goals. Strengthen exchanges and cooperation with Southeast Asian countries and promote coordinated development with the Guangdong-Hong Kong-Macao Greater Bay Area.
Aligning with Hainan’s Positioning:
Focus closely on Hainan’s strategic positioning as a comprehensive deepening reform and opening-up pilot zone, national ecological civilization pilot zone, international tourism consumption center, and national major strategic service guarantee zone. Give full play to the advantages of Hainan’s rich natural resources, unique geographical location, and reliance on a super-large domestic market and hinterland economy. Seize the important opportunities of the new round of global technological revolution and industrial transformation, focus on developing tourism, modern service industries, and high-tech industries, and accelerate the cultivation of new competitive advantages with Hainan characteristics in cooperation and competition.
Emphasizing Reform and Innovation:
Strengthen awareness of reform and innovation, give Hainan greater autonomy in reform, support Hainan in vigorously promoting reform and innovation in all aspects, actively explore the establishment of more flexible and efficient legal, regulatory, and management systems adapted to the construction of free trade ports, and make great efforts to remove institutional obstacles hindering the flow of production factors. Deepen the opening-up driven by the flow of goods and factors, accelerate the promotion of institutional opening such as rules, and promote comprehensive deepening of reforms with high-level openness. Strengthen the integration of reform systems, pay attention to coordinated advancement, coordinate various innovative measures to complement each other, and improve the overall benefits of reform and innovation.
Upholding Bottom-Line Thinking:
Adhere to steady and solid progress, arrange the opening rhythm and progress in an overall manner, mature one step at a time, and avoid impatience and seeking quick success. Deepen the streamlining of administration and delegation, combine delegation with regulation, optimize services, comprehensively implement the institutional system of facilitating access and supervising processes in accordance with the law, and establish regulatory standards and normative systems aligned with international practices. Strengthen the identification of major risks and systemic risk prevention, establish and improve supporting measures for risk prevention and control. Improve the mechanism for preventing and controlling major epidemics and enhance the emergency management system for public health. Conduct regular assessments, promptly correct deviations and errors, and ensure the correct and healthy development direction of Hainan Free Trade Port construction.
(3) Development Goals:
By 2025, preliminarily establish a free trade port policy and institutional system with a focus on trade and investment facilitation. The overall business environment reaches the first-class level domestically, the number of market entities significantly increases, industrial competitiveness notably enhances, risk prevention and control are effectively implemented, laws and regulations adapted to the construction of free trade ports are gradually improved, and the quality and efficiency of economic development are noticeably enhanced.
By 2035, the free trade port system and operation mode become more mature, and a trade and investment rule system characterized by freedom, fairness, rule of law, and high-level process supervision is basically established. Achieve trade and investment facilitation, free flow of cross-border funds, easy entry and exit of personnel, smooth transportation, and orderly data security. The business environment is further optimized, the legal and regulatory system becomes more sound, the risk prevention and control system becomes more stringent, and the modern social governance pattern basically takes shape, making it a new highland for China’s open economy.
By the middle of this century, comprehensively build a high-level free trade port with strong international influence.
(4) Implementation Scope:
The implementation scope of the Hainan Free Trade Port covers the entire island of Hainan.
2. Institutional Design:
Focusing on liberalizing and facilitating trade and investment, supported by the free and orderly flow of various production factors across borders and a modern industrial system, and safeguarded by special tax arrangements, efficient social governance system, and comprehensive legal system, a policy and institutional system for the Hainan Free Trade Port will be constructed. Under the premise of clear division of labour and mechanism measures and ensuring that no systemic risks occur, the policy and institutional system of the Hainan Free Trade Port will be established.
(1) Trade Liberalization and Facilitation:
Under the premise of effective supervision, establish customs supervision special areas operating across the entire island. For goods trade, implement a liberalization and facilitation system characterized by “zero tariffs” as the basic feature. For service trade, implement policies and measures of liberalization and facilitation characterized by both “market access and operation permit.”
“First Line” Open-up:
Establish a “first line” between the Hainan Free Trade Port and other countries and regions outside the People’s Republic of China’s border. Strengthen security access control at the entry and exit points of the “first line,” enhance port public health safety, national biosecurity, food safety, and product quality control.
While ensuring compliance with international treaties China has signed or participated in, formulate a list of goods and items prohibited or restricted from import and export in the Hainan Free Trade Port. Goods and items not on the list can enter and exit freely, and customs will regulate them in accordance with the law.
Formulate a catalogue of taxable imported goods for the Hainan Free Trade Port, with goods outside the catalogue exempt from import duties upon entry into the free trade port. Goods transported under through bills of lading are not subject to taxation or inspection.
Goods and items departing from the Hainan Free Trade Port are managed as exports. Implement convenient and efficient customs supervision and construct a high-standard international trade “single window.”
“Second Line” Management:
Establish a “second line” between the Hainan Free Trade Port and other regions within the People’s Republic of China’s border (hereinafter referred to as the mainland).
When goods enter the mainland from the Hainan Free Trade Port, relevant procedures should generally follow import regulations, and tariffs and import-related taxes should be levied according to regulations.
For goods produced by industries encouraged to operate in the Hainan Free Trade Port, which do not contain imported materials or where the value added in the Hainan Free Trade Port exceeds 30%, import duties are exempted when entering the mainland via the “second line,” while value-added tax and consumption tax are levied according to regulations. Postal items entering the mainland from the Hainan Free Trade Port are supervised according to regulations, and taxes are levied according to regulations.
Import management for transportation tools heading from the Hainan Free Trade Port to the mainland is simplified. Goods, items, and transportation tools entering the Hainan Free Trade Port from the mainland are managed according to domestic circulation regulations.
Goods transferred from the mainland to the Hainan Free Trade Port for further transport to the mainland do not require customs declaration procedures and should be loaded and unloaded at customs-supervised operation sites (locations) within the free trade port separately from other customs-supervised goods, with clear identification labels. Enterprises operating in these sites should transmit information to customs as required for supervision.
Island-wide Freedom:
Customs implement precise supervision with low intervention and high efficiency for enterprises and institutions within the Hainan Free Trade Port, allowing them to operate freely.
Goods shipped from abroad, transhipped, sorted, and assembled in the Hainan Free Trade Port, and then sent to other countries or regions, undergo simplified customs procedures.
There is no storage period limit for goods within the Hainan Free Trade Port, and they can be stored at the discretion of the owner. Goods subject to “zero tariffs” are exempt from regular customs supervision.
Promoting Trade in Services Liberalization and Facilitation:
Implement a negative list system for cross-border trade in services, remove various barriers existing in service trade models such as cross-border delivery, overseas consumption, and individual movement, and provide national treatment to overseas service providers.
Implement a fund payment and transfer system supporting cross-border trade in services. Further standardize domestic regulations affecting the freedom and convenience of trade in services in terms of notification, qualification requirements, technical standards, transparency, and regulatory consistency.
(2) Investment Liberalization and Facilitation:
Significantly broaden market access in the Hainan Free Trade Port, strengthen property rights protection, ensure fair competition, and create an open, transparent, and predictable investment environment to further stimulate the vitality of various market entities.
Implementing Commitment-based Market Access.
Strictly implementing the principle of “unless prohibited, it is permitted,” and under the premise of effective regulation, in areas with mandatory standards, permits and approvals are generally abolished. Instead, a filing system is established where market entities commit to meeting relevant requirements and submit relevant materials for record-keeping to engage in investment and business activities. The agency responsible for filing acceptance assumes review responsibilities upon receipt of the filing. For foreign investment, a system of national treatment plus a negative list management is implemented to significantly reduce prohibitions and restrictions.
Innovating and Improving the Investment Freedom System.
Implementing an investment facilitation system with process supervision as the focus. Establishing convenient establishment procedures primarily through electronic licenses, business facilitation based on the principles of “responsive when needed” and “non-interference when not needed,” cancellation facilitation primarily through public commitments and streamlined procedures, and bankruptcy facilitation primarily through diligence and responsibility.
Establishing and Improving a Fair Competition System.
Strengthening the foundational status of competition policy to ensure that market entities of all types of ownership enjoy equal treatment in terms of factor acquisition, standard setting, access permits, business operations, and preferential policies.
Government procurement treats domestic and foreign-funded enterprises equally. Strengthening and optimizing anti-monopoly enforcement, breaking administrative monopolies, preventing market monopolies, and maintaining fair competition in the market order.
Improving the Property Rights Protection System.
Legally protecting the rights of individuals and legal persons to acquire, use, dispose of, and inherit property, as well as the right to compensation when private or corporate property is expropriated in accordance with the law.
Implementing laws and regulations such as the Company Law to strengthen protection for small and medium-sized investors. Strengthening penalties for intellectual property rights infringement and establishing a sound credit-based supervision and punishment mechanism for market entities in the field of intellectual property rights.
Strengthening the application of blockchain technology in intellectual property transactions, evidence preservation, etc., and exploring new models suitable for the development of free trade ports.
(3) Facilitating Free Cross-border Capital Flow.
Adhering to the principle of financial services serving the real economy, with a focus on liberalizing and facilitating trade and investment, gradually opening up capital projects, and orderly promoting the free and convenient flow of funds between the Hainan Free Trade Port and overseas.
Establishing a Multifunctional Free Trade Account System.
Building on existing domestic and foreign currency accounts and free trade accounts, construct the foundational platform for Hainan’s financial opening to the outside world. Through financial account isolation, establish an electronic “enclosure” for funds to provide the basic conditions for the free and convenient flow of cross-border funds between the Hainan Free Trade Port and overseas.
Facilitating Cross-border Trade and Investment Fund Flows.
Further promoting the facilitation of cross-border trade in goods, services, and new forms of international trade settlement to transition from ex-ante verification of bank authenticity to ex-post verification.
Simplifying management in the direct investment transaction process according to the national treatment plus negative list model, improving the convenience of registration and exchange in the exchange process, and exploring new forms of cross-border investment management that meet market demands.
In the field of cross-border financing, explore the establishment of a new external debt management system, pilot the consolidation of transactional external debt management frameworks, improve the management of corporate external debt issuance registration, fully implement comprehensive cross-border financing macro-prudential management, steadily expand the scope of cross-border asset transfers, and enhance the facilitation of foreign exchange settlement for external debt funds.
In the field of cross-border securities investment and financing, prioritize serving the real economy’s investment and financing needs, support the development of industries with distinctive and comparative advantages in Hainan, and provide priority support for overseas listings, bond issuance, and simplify exchange management.
Expanding the Opening-up of the Financial Industry Internally and Externally.
Taking the lead in implementing the policy of further opening up the financial industry in the Hainan Free Trade Port. Support the establishment of international trading venues for energy, shipping, property rights, equities, etc. Accelerate the development of settlement centres.
Accelerating Financial Reform and Innovation.
Support the innovative and standardized development of housing leasing financial services and the development of Real Estate Investment Trusts (REITs). Steadily expand various forms of industrial financing channels and relax the scope of capital use for foreign-funded enterprises. Innovate policies, products, and tools in financial technology.
(4) Facilitating Free Entry and Exit of Personnel.
According to the development needs of the Hainan Free Trade Port, a more open talent and residence policy will be implemented for high-end industry talents to create a highland for talent aggregation.
Under the premise of effectively preventing and controlling risks related to foreign security, more convenient entry and exit management policies will be implemented.
Providing entry and exit facilitation for foreign high-level talents engaged in investment entrepreneurship, academic exchanges, and economic and trade activities.
Improving the international talent evaluation mechanism, assessing human resources categories primarily based on salary levels, and establishing a market-oriented talent mechanism. Implementing a negative list management system for work permits for foreign nationals entering the Hainan Free Trade Port, and relaxing the residence policy for foreign professionals with technical skills.
Allowing qualified overseas individuals to serve as legal representatives of statutory institutions, public institutions, and state-owned enterprises within the Hainan Free Trade Port. Implementing lenient temporary entry and exit policies for business personnel.
Establishing and improving the talent service management system. Realizing information sharing and joint review and inspection of work permits, visas, and residence permits. Promoting the establishment of talent service centres to provide employment, education, and life services and safeguard their legitimate rights and interests.
Implementing more convenient entry and exit management policies. Gradually implementing a broader scope of visa-free entry policies and gradually extending visa-free stay durations. Optimizing border control and customs inspection management for entry and exit to provide clearance facilitation for business personnel, cruise ships, and yachts.
(5) Facilitating Free and Convenient Transportation.
Implementing highly open and convenient transportation policies to promote the construction of the Western Land-Sea New Passage international shipping hub and aviation hub, accelerating the establishment of a modern comprehensive transportation system.
Establishing a more open and liberalized shipping regime.
Constructing a “China Yangpu Port” registry port and supporting ship registration activities in the Hainan Free Trade Port. Researching and establishing maritime operational management systems and seafarer management systems for the Hainan Free Trade Port. Further relaxing airspace control and route restrictions, optimizing shipping routes, encouraging increased capacity deployment, and expanding flight routes.
Enhancing the level of transportation facilitation and service guarantees.
Promoting joint boarding inspections for vessels. Constructing efficient, convenient, and high-quality special regulatory policies for flag states. Providing higher-quality and more efficient financial services for ship and aircraft financing, removing restrictions on overseas financing for ships and aircraft, and exploring insurance as an alternative to security deposits.
Strengthening the construction of transportation and customs facilitation-related facilities and equipment between the mainland and the Hainan Free Trade Port, rationalizing staffing, and improving the level of free and convenient transportation.
(6) Orderly Flow of Data Security.
Expanding openness in the data field, innovating security system design, ensuring the controllable security of data flow, and fostering the development of the digital economy.
Orderly expansion of communication resources and business openness.
Opening up value-added telecommunications services and gradually lifting restrictions on foreign ownership. Allowing entities registered and service facilities in the Hainan Free Trade Port to conduct online data processing and transaction services for the entire Free Trade Port and internationally, gradually expanding business operations nationwide under the premise of controllable security.
Safely and orderly opening up basic telecommunications services. Conducting pilot projects for international internet data exchange, constructing international submarine cables and landing points, and establishing international communication entry and exit bureaus.
(7) Modern Industrial System.
Vigorously developing the tourism industry, modern service industry, and high-tech industries, continuously strengthening the foundation of the real economy, and enhancing industrial competitiveness.
Tourism Industry.
Adhering to ecological priority and green development, focusing on the construction of an international tourism consumption centre, promoting the deep integration of tourism with culture, sports, health care, and elderly care, enhancing the development level of the Bo’ao Lecheng International Medical Tourism Pioneer Zone, supporting the construction of cultural tourism industry parks, developing characteristic tourism industry clusters, cultivating new formats and models of tourism, and creating a demonstration province for comprehensive tourism.
Accelerating Sanya’s development into an international cruise homeport, supporting the construction of cruise tourism pilot zones, and attracting international cruise registrations. Establishing a yacht industry reform and development innovation pilot zone. Supporting the creation of national-level tourism resort areas and 5A-level scenic spots.
Modern Service Industry.
Gathering global innovative elements, deepening internal and external opening up, and attracting multinational corporations to establish regional headquarters. Innovating port management systems and mechanisms, promoting the integration of port resources, expanding the shipping service industry chain, promoting the development of bonded warehousing, international logistics distribution, transit trade, bulk commodity trade, import product exhibitions, circulation processing, container dismantling and assembly, and enhancing global supply chain service management capabilities.
Building international shipping hubs, promoting the integrated development of ports, industries, and cities. Constructing Hainan International Design Island, International Education Innovation Island for science, engineering, agriculture, and medicine, and a regional international convention and exhibition centre, expanding the opening up of professional service industries.
Improving marine service infrastructure, actively developing marine logistics, marine tourism, marine information services, marine engineering consulting, maritime finance, maritime commerce, and other sectors, building an internationally competitive marine service system. Establishing a national base for foreign cultural trade.
High-tech Industries.
Focusing on platform carriers, upgrading industrial capabilities, and focusing on the development of the information industry with a focus on the Internet of Things, artificial intelligence, blockchain, and digital trade.
Relying on the Wenchang International Aerospace City and the Sanya Deep Sea Science and Technology City, layout and construct major scientific and technological infrastructure and platforms, cultivate deep-sea and deep-space industries.
Strengthening advanced manufacturing industries around ecological protection, biomedicine, new energy vehicles, and intelligent automobiles. Leveraging the advantages of the National Southern Breeding Research and Breeding Base, constructing a global tropical agriculture centre and a global plant and animal germplasm resource introduction and transfer base. Building a Smart Hainan.
(8) Taxation System.
Following the principles of zero tariffs, low tax rates, simplified tax system, strong rule of law, and phased implementation, we will gradually establish a taxation system that is conducive to high-level free trade ports.
Zero Tariffs.
Before the island-wide customs closure, certain imported goods are exempt from import tariffs, value-added tax, and consumption tax. After the island-wide customs closure and the streamlining of the tax system, imported goods allowed to be imported into the Hainan Free Trade Port, beyond the taxed imported goods catalog, are exempt from import tariffs.
Low Tax Rates.
Enterprises engaged in substantive operations in the Hainan Free Trade Port are subject to preferential corporate income tax rates. Individuals meeting certain conditions are subject to preferential individual income tax rates.
Simplified Tax System.
In line with the direction of tax system reform in China, efforts are made to explore and promote a simplified tax system. Reforming the tax system, reducing the proportion of indirect taxes, achieving a simple and scientific tax structure, optimizing tax system elements comprehensively, significantly reducing the tax burden, clarifying income attribution, and generally balancing fiscal revenues and expenditures.
Strong Rule of Law.
Tax authorities assess and alert tax behaviours based on the principle of substantive economic activities and value creation locations. They establish clear and concise criteria for determining substantive business locations and places of residence, strengthen the identification of tax evasion risks, prevent erosion of the tax base and profit shifting, and avoid becoming a “tax haven”.
Actively participating in international tax collection and management cooperation, enhancing the sharing of tax-related intelligence information. Strengthening credit classification services and management in the tax field, taking corresponding measures against enterprises and individuals who violate laws and regulations.
Phased Approach.
According to the different stages of construction of the Hainan Free Trade Port, a phased implementation of zero tariffs, low tax rates, and a simplified tax system is carried out step by step, ultimately forming a tax system with international competitiveness.
(9) Social Governance.
Efforts are focused on advancing government institutional reform and the transformation of government functions, encouraging the integrated application of technologies such as blockchain in governance systems and modernizing governance capabilities, and constructing a comprehensive, scientifically standardized, and effectively operating governance system for the free trade port.
Deepening Government Institutional Reform.
Further promote the reform of large department systems in Hainan, integrate similar or similar functional responsibilities scattered across departments, and promote the merger of departments with similar functions.
Control the proportion of administrative comprehensive civil servants, tilt administrative personnel towards regulatory departments, and implement a market-oriented professional personnel appointment system.
Promoting the Transformation of Government Functions.
Strengthen legislative and law enforcement supervision, enhance the application of the social credit system, deepen the “double random, one open” market supervision system, and adhere to inclusive and prudent regulation of emerging business models.
Give full play to the role of modern information technologies such as “Internet Plus,” big data, and blockchain, standardize government service standards through platforms such as government affairs services, realize government process reengineering and “one-stop” government services, strengthen orderly data sharing, and enhance government service and governance capabilities.
Government commitments must be faithfully fulfilled, and compensation or compensation should be provided in a timely manner for losses caused by unfulfilled or poorly executed commitments.
Building a Social Governance Pattern of Co-construction, Co-governance, and Shared Governance.
Deepen the reform of the household registration system, further relax the household registration transfer policy, and implement a unified island-wide residence permit system with the citizen identification number as the sole identifier.
Grant industry organizations greater autonomy and play their important role in maintaining market order, implementing standards, and resolving industry disputes. Grant communities greater grassroots governance authority and accelerate innovation in community services and governance.
Innovative Ecological Civilization System Mechanism.
Deepen the construction of the National Ecological Civilization Pilot Zone (Hainan), comprehensively establish a system for efficient resource utilization, and improve the natural resource property rights system and the system of compensated use.
Solidly promote the construction of the national land spatial planning system and implement differentiated control over the use of natural ecological space. Improve systems such as the concession rights for natural resource assets within nature reserves and explore mechanisms for realizing the value of ecological products.
Establish national parks such as tropical rainforests and construct a natural protected area system with national parks as the main component. Explore the establishment of a government-led, enterprise and social participation, market-oriented operation, and sustainable ecological protection compensation mechanism.
Accelerate the establishment of a unified system for the investigation, evaluation, monitoring, and registration of natural resources. Improve the ecological environment monitoring and evaluation system.
(10) Rule of law system.
Establish a rule of law system for the Hainan Free Trade Port based on the Hainan Free Trade Port Law, with local regulations and commercial dispute resolution mechanisms as important components, to create a world-class rule of law environment for the Hainan Free Trade Port.
Formulate and implement the Hainan Free Trade Port Law.
Clarify the institutional arrangements of the free trade port in legal form to provide principled and foundational legal guarantees for the construction of the free trade port.
Formulate regulations for the economic special zones.
Under the premise of adhering to the Constitution and the basic principles of laws and administrative regulations, support Hainan in fully exercising legislative power for economic special zones, based on the practical needs of constructing the free trade port, and formulate regulations for the economic special zones.
Establish a diversified mechanism for resolving commercial disputes.
Improve the centralized adjudication mechanism for international commercial dispute cases and provide various non-litigation dispute resolution methods such as international commercial arbitration and mediation for international commercial disputes.
(11) Risk prevention and control system.
Formulate and implement effective measures to prevent and mitigate major risks in areas such as trade, investment, finance, data flow, ecology, and public health with targeted prevention and control measures.
Trade risk prevention and control.
Construct open ports and “second-tier ports” with high standards of infrastructure and regulatory facilities, increase investment in information systems and technological equipment, implement intelligent and precise supervision.
Rely on the island-wide “people flow, goods flow, capital flow” information management system, social management and supervision system, and port supervision system as the “three lines of defense” to establish a social management informatization platform in Hainan.
Implement round-the-clock dynamic monitoring for non-customs clearance areas. Strengthen supervision in specific areas, set up comprehensive law enforcement points in regions without customs inspection institutions, and conduct real-time monitoring and processing of vehicles, loading and unloading of goods, and items.
Goods, items, personnel, and transport vehicles entering and exiting between the Hainan Free Trade Port and the mainland must pass through ports. Improve the configuration of port supervision equipment and facilities.
Customs is responsible for supervision and anti-smuggling work at ports and other customs supervision areas. The Hainan provincial government is responsible for the comprehensive governance of anti-smuggling throughout the province and evaluates the anti-smuggling comprehensive governance work of subordinate governments.
Establish a joint prevention and control mechanism against smuggling with Guangdong Province, Guangxi Zhuang Autonomous Region, and other areas.
Investment risk prevention and control.
Improve process supervision system that is in line with investment rules, strictly implement the review responsibilities of filing acceptance agencies and the filing responsibilities of filing entities.
Clearly define rules and standards for strengthening process supervision, fulfil supervisory responsibilities, effectively supervise the entire life cycle of investment and business activities according to law, adopt inclusive and prudent supervision for new technologies, new industries, new formats, and new models, and implement key supervision for high-risk industries and fields.
Establish and improve the legal responsibility system, and formulate strict punitive measures for filing entities that provide false filing information or engage in illegal business activities.
Implement foreign investment security review well, while creating a stable, transparent, and predictable investment environment, effectively prevent national security risks.
Financial risk prevention and control.
Optimize financial infrastructure and the legal environment, strengthen the protection of financial consumer rights, rely on the fund flow information monitoring management system, establish and improve the fund flow monitoring and risk prevention and control system.
Establish a macro-prudential management system for cross-border capital flows in the free trade port, strengthen the identification of major risks and the prevention of systemic financial risks.
Strengthen anti-money laundering, anti-terrorist financing, and anti-tax evasion reviews, study the establishment of a money laundering risk assessment mechanism, and regularly assess money laundering and terrorist financing risks.
Construct a financial regulatory coordination mechanism suitable for the construction of the Hainan Free Trade Port.
Network security and data security risk prevention and control. Thoroughly implement the network security level protection system, focusing on safeguarding the security of critical information infrastructure and data, improving the network security guarantee system, and enhancing the capabilities and levels of network security guarantee related to the construction of the Hainan Free Trade Port. Establish a sound system for the management of data export security. Improve measures for controlling data flow risks.
Public health risk prevention and control.
Strengthen the construction of the public health prevention and control system, establish monitoring and early warning platforms, emergency response platforms, and decision-making command systems for infectious diseases and sudden public health incidents, enhance early prevention, risk assessment, and timely disposal capabilities.
Strengthen the construction of the disease prevention and control system, construct provincial-level disease prevention and control centres to high standards, establish the Hainan branch of the National Tropical Disease Research Centre, accelerate the infrastructure construction of disease prevention and control institutions at all levels, and optimize the allocation of laboratory inspection and testing resources.
Strengthen the construction of public health talent teams, improve the capabilities of monitoring and early warning, inspection and testing, field epidemiological investigation, emergency response, and medical treatment.
Construct level-three biosafety laboratories and institutes for infectious disease prevention and control, enhance comprehensive detection and rapid screening capabilities, optimize the reserve and capacity guarantee system for important public health emergency supplies.
Improve and optimize the system for major epidemic treatment, establish a medical service network for infectious diseases, establish provincial and municipal infectious disease medical centres based on comprehensive hospitals or specialized hospitals, improve the infrastructure and medical conditions of infectious disease medical centres and hospitals.
Focus on strengthening the capacity building of grassroots infectious disease medical services, enhance the diagnosis and treatment capabilities of infectious diseases in county-level comprehensive hospitals.
Build a grid-based and closely-knit medical group, promote resource sinking and integration of medical treatment and prevention. Improve the standardized construction of grassroots medical and health institutions, strengthen the capabilities of diagnosing and treating common and prevalent diseases, public health services, and health management.
Strengthen international health quarantine cooperation and international epidemic information collection and analysis, enhance the guarantee of health quarantine technical facilities at ports, establish first-class international travel health care centres, strictly implement the health declaration system for inbound and outbound personnel, strengthen health quarantine for transportation vehicles, personnel, goods, and items from key countries or regions, strengthen joint prevention and control, and strengthen the port quarantine line.
Strengthen the monitoring of global infectious disease epidemics, promote early warning of overseas infectious disease epidemic risks, and prevent major infectious diseases from crossing borders.
Establish a joint prevention and control mechanism for overseas epidemic diseases and harmful biological agents involving multiple departments such as customs.
Enhance the risk warning and rapid response regulatory capabilities for import and export commodity quality and safety risks and improve the supervision of key and sensitive import and export commodities.
Ecological risk prevention and control.
Implement strict entry and exit environmental safety access management system, prohibit the import of foreign waste.
Promote the construction of facilities for the disposal of medical waste and other hazardous waste, and enhance emergency preparedness and response capabilities for sudden ecological environmental incidents. Establish and improve the environmental credit evaluation system.
3. Arrange in steps and stages.
(1) Key tasks before 2025.
Centred around liberalizing and facilitating trade and investment, and under effective supervision, orderly advance the opening-up process, promote the efficient flow of various factors, achieve early results, and timely initiate island-wide customs closure operations.
Strengthen the construction of customs special supervision areas. Implement an import and export management system in customs special supervision areas such as Yangpu Bonded Port Area, where “first-tier” liberalization and “second-tier” control are prioritized.
Increase the establishment of customs special supervision areas according to the needs of constructing the Hainan Free Trade Port.
Implement zero-tariff policies for certain imported goods.
Apart from goods expressly exempted by laws, regulations, and related provisions or prohibited for import by national regulations, “zero-tariff” negative list management will be applied to production equipment imported by enterprises for self-use; “zero-tariff” positive list management will be applied to commercial vehicles and yachts imported for transportation and tourism use, as well as raw and auxiliary materials consumed in production for self-use or in processing activities (or service trade processes) conducted under the “two places” model; “zero-tariff” positive list management will also be applied to imported goods for consumption by residents on the island, allowing tax-free purchases. Goods and items managed under the “zero-tariff” list will be exempted from import duties, import value-added tax, and consumption tax.
The list will be dynamically adjusted by relevant departments according to the actual needs and supervision conditions in Hainan. The duty-free shopping limit for outbound travellers will be raised to 100,000 yuan per person per year, and the variety of duty-free goods will be expanded.
Reduce restrictions on cross-border trade in services.
In key areas, regulations affecting the freedom and convenience of trade in services will be standardized first.
The Negative List for Cross-border Trade in Services in the Hainan Free Trade Port will be formulated and promulgated, granting national treatment to foreign service providers.
The establishment of the Hainan International Intellectual Property Exchange will be promoted, and institutional innovations will be carried out in intellectual property transfer, utilization, and tax policies, exploring the securitization of intellectual property.
Implement a “simplified approval” investment system.
The Special Market Access List and the Negative List for Foreign Investment Access will be formulated and promulgated for the Hainan Free Trade Port. For foreign-invested enterprises established in specific service sectors that are opened up in advance, the geographical scope of business operations will be specified.
A comprehensive “simplified approval” system will be implemented by establishing and improving systems such as national security review, industry access environment standards, and social credit system, deepening the reform of “delegation of powers, regulation, and service” and establishing a process supervision system based on credit supervision and adapted to negative list management.
Pilot reform of cross-border securities investment and financing policies.
Support domestic enterprises registered in the Hainan Free Trade Port to issue stocks overseas according to domestic and foreign financing plans, give priority to supporting enterprises in financing through overseas bond issuance, and delegate the registration and filing management of enterprise external debt issuance to the development and reform department of Hainan Province.
Explore pilot projects for cross-border asset management business, and facilitate cross-border securities investment and financing exchanges. Allow Hainan Free Trade Port enterprises to directly handle foreign exchange registration for overseas listings at banks.
Accelerate the opening-up of the financial industry domestically and internationally.
Cultivate and enhance the ability of Hainan’s financial institutions to serve the opening-up policy, and support the implementation of the financial industry’s opening-up policy in the Hainan Free Trade Port. Support qualified overseas securities, funds, and futures operating institutions to establish wholly-owned or joint venture financial institutions in the Hainan Free Trade Port.
Support financial institutions to innovate financial products and improve service quality and efficiency based on the needs of key industries such as Hainan’s tourism, modern services, and high-tech industries. Relying on the construction of the Hainan Free Trade Port, promote the development of related over-the-counter derivative businesses.
Support Hainan in establishing trading venues in line with international practices in terms of membership, trading, taxation, clearing, settlement, investor protection, anti-money laundering, etc., while optimizing and upgrading existing trading venues.
Subject to relevant laws and regulations, support the establishment of property insurance, life insurance, reinsurance companies, mutual insurance organizations, and self-insurance companies in the Hainan Free Trade Port.
Enhance the ability of financial services to serve the real economy.
Support the issuance of corporate credit bonds, project revenue bonds, and special bonds for housing leasing, among others.
Promote pilot securitization of quality tourism assets with stable cash flows. Support financial institutions, on the premise of compliance with laws and regulations and effective risk prevention, to carry out insurance financing, warehouse receipt pledge loans, accounts receivable pledge loans, and intellectual property pledge financing in the field of trade in services.
Support high-tech enterprises in the maritime industry to use equity and intellectual property for pledge financing, and regulate and steadily develop shipping logistics financial products and supply chain financing products.
Promote the landing of research results in the financial technology field such as artificial intelligence, big data, and cloud computing in the Hainan Free Trade Port.
Explore the establishment of commercial medical insurance services that are linked to the international commercial insurance payment system. Support financial institutions in the insurance industry to cooperate with overseas institutions to develop cross-border medical insurance products.
Implement more convenient visa-free entry measures.
Expand the channels for visa-free entry for foreigners from being invited and received by travel agencies to self-declaration or invitation and reception by units.
Relax restrictions on the reasons for foreigners applying for visa-free entry, allowing foreigners to apply for visa-free entry to Hainan for reasons such as business, visit, family visit, medical treatment, exhibition, and sports competitions.
Implement a 15-day visa-free policy for foreign tourist groups entering by cruise ship.
Implement a more open maritime transport policy.
Establish the “China Yangpu Port” as the port of registry for ships, simplify inspection procedures, gradually relax the statutory inspection of ships, establish the International Ship Registration Centre in the Hainan Free Trade Port, and innovate convenient and efficient ship registration procedures.
Remove restrictions on the foreign shareholding ratio of ship registration entities. Under the premise of ensuring effective supervision and controllable risks, domestically-built ships registered at “China Yangpu Port” and engaged in international transportation are treated as exports and eligible for export tax rebates.
For domestic ships engaged in domestic and international trade transshipment through Yangpu Port, they are allowed to refuel with bonded oil needed for this voyage; for refuelling with locally produced fuel oil needed for this voyage, export tax rebate policy is implemented.
For qualified container goods transhipped through Yangpu Port and leaving the country, a port of shipment tax rebate policy is implemented. Accelerate the integration of port and shipping in the Qiongzhou Strait.
Implement a more open aviation transport policy.
On a reciprocal basis, promote the opening of the third and fourth freedoms of the air for carriers of both parties in bilateral air transport agreements to fly to and from Hainan, and according to China’s overall aviation transport policy, expand the necessary air rights arrangements for the construction of the Hainan Free Trade Port, including the fifth freedom of the air.
Support the pilot opening of the seventh freedom of the air in Hainan. Allow airlines from relevant countries and regions to carry out passenger and cargo services from Hainan to third countries (regions).
Implement international transit passengers and their luggage through-check. Support major base airlines based in Hainan to open international routes.
Allow refuelling with bonded aviation fuel for flights entering and leaving Hainan.
Facilitate the flow of data.
Under the framework of the national data cross-border transmission security management system, carry out pilot projects for data cross-border transmission security management, and explore mechanisms that can facilitate data flow while ensuring security.
Deepen the opening-up of industries to the outside world.
Support the development of headquarters economy. Host the China International Consumer Goods Expo, where imported exhibits from national-level exhibitions enjoy tax-free import and sales during the exhibition period; the specific tax-free policy is formulated by the relevant departments.
Support Hainan in vigorously introducing high-quality medical resources from abroad. Summarize the experience of pilot projects for the construction of regional medical centres, and study support for Hainan to build regional medical centres.
Allow high-level universities and colleges in science, engineering, agriculture, and medicine from abroad to independently establish schools and set up international schools in the Hainan Free Trade Port.
Promote key domestic universities to introduce well-known foreign institutions to establish independent legal entities for Sino-foreign cooperative education institutions in the Hainan Free Trade Port. Build Hainan into a national base for blockchain technology and industrial innovation development.
Optimize tax policy arrangements.
From the date of issuance of this plan, enterprises registered and substantially operated in the Hainan Free Trade Port in encouraged industries will be subject to a 15% reduction in corporate income tax. Income derived from overseas direct investment made by tourism, modern service, and high-tech industrial enterprises established in the Hainan Free Trade Port before 2025 will be exempt from corporate income tax.
Capital expenditures meeting certain conditions by enterprises will be allowed to be deducted in a lump sum or accelerated depreciation and amortization in the year when the expenditure occurs.
High-end talents and scarce talents working in the Hainan Free Trade Port will be exempt from individual income tax on the portion of their actual tax burden exceeding 15%.
High-end talents and scarce talents enjoying the above preferential policies will be subject to list management, with specific management measures formulated by the Hainan Provincial Department of Commerce, Finance, and the State Administration of Taxation.
Increase central financial support.
The central government will allocate comprehensive financial subsidies to appropriately compensate for the reduction in local government revenue.
Encourage Hainan to issue local government bonds within the approved quota by the State Council to support the construction of the free trade port projects.
On the premise of effectively preventing risks, steadily increase the quota for issuing special bonds by Hainan local governments to support the construction of major infrastructure projects.
Encourage the issuance of local government bonds to qualified overseas investors in the Hainan Free Trade Port. The Hainan Free Trade Port Construction Investment Fund will be established by coordinating central funds and self-financing by Hainan, operating in a government-guided and market-oriented manner.
Provide full legal authorization.
Any reform policy measures proposed in this plan that involve adjustments to existing laws or administrative regulations shall be implemented after unified authorization by the National People’s Congress and its Standing Committee or the State Council.
Research will be conducted to simplify the work procedures for adjusting existing laws or administrative regulations to facilitate rapid implementation.
Authorize Hainan to formulate and promulgate regulations on commercial deregistration, bankruptcy, fair competition, expropriation, and requisitioning in the free trade port.
Accelerate the formulation and promulgation of laws for the Hainan Free Trade Port.
Strengthen land and sea use guarantees.
Authorize Hainan to approve adjustments to the layout of the province’s farmland, permanent basic farmland, forest land, and construction land under the condition of not exceeding important indicators such as the ecological protection red line, the area of permanent basic farmland, the total amount of cultivated land and forest land, and ensuring that the quality is not reduced, in accordance with the conditions stipulated by the state, and incorporate them into the provincial and municipal county land and space planning.
Actively promote the integrated development of urban and rural areas and the new mode of construction land in reclamation areas, and promote the capitalization of farmland in farm reclamation areas.
Establish a system of intensive and efficient land use, evaluation standards, and policies for revitalizing and disposing of existing construction land.
Summarize and promote the three pilot experiences of rural land system reform in Wenchang, support Hainan in promoting rural land system reform throughout the province. Legally guarantee the demand for sea use of major national projects.
Prepare for customs closure operations.
Formulate and promulgate the list of taxable imported goods, the list of restricted imported goods, the list of prohibited imported goods, the list of restricted exported goods, the list of prohibited exported goods, and the management measures for transportation tools in the Hainan Free Trade Port, as well as standardize the format of customs clearance documents and operational procedures for customs clearance with mainland customs, export clearance procedures, etc.
Increase the opening of ports to the outside world and construct supporting facilities for island-wide customs closure operations.
Timely initiate island-wide customs closure operations.
Before 2025, conduct a comprehensive assessment of the preparation for island-wide customs closure operations and address security vulnerabilities.
Island-wide customs closure operations will be implemented when conditions are ripe, and there will no longer be retained customs special supervision areas such as the Yangpu Bonded Port Zone and the Haikou Comprehensive Bonded Zone.
Relevant supervision implementation plans will be formulated by the relevant departments.
Simultaneously with island-wide customs closure operations, streamline the current value-added tax, consumption tax, vehicle purchase tax, urban maintenance and construction tax, and education surcharge in accordance with the law, and initiate related work on the collection of sales tax at the retail stage for goods and services.
4. Key Tasks by 2035:
Further optimize and improve open policies and related institutional arrangements to comprehensively achieve trade liberalization and facilitation, investment liberalization and facilitation, free and convenient cross-border capital flow, free and convenient entry and exit of personnel, free and convenient transportation, and orderly flow of data security, promoting the construction of a high-level free trade port.
This indicates a continued commitment to enhancing the openness and efficiency of the free trade port, aiming for a more comprehensive and seamless flow of goods, services, capital, and people, while ensuring data security and orderly management.
Achieving Trade Liberalization and Facilitation:
Innovate customs supervision systems to establish a non-tariff trade measures system compatible with the overall national security concept.
Establish a system for the free and convenient import and export of goods, ensuring overseas goods enjoy free and convenient entry and exit in the Hainan Free Trade Port.
Establish and improve relevant systems for cross-border payment businesses, creating a favourable market environment for payment services and enhancing the efficiency of cross-border payment services.
Promote the liberalization and facilitation of cross-border trade in services in accordance with laws and regulations.
Achieving Investment Liberalization and Facilitation:
Fully open up investment access except in areas related to national security, social stability, ecological protection red lines, and major public interests.
In areas with mandatory standards, establish an “standardization + commitment” investment system where market entities can conduct investment and business activities upon meeting relevant requirements and making commitments.
Achieving Free and Convenient Cross-Border Capital Flow:
Allow non-financial enterprises meeting certain conditions to autonomously borrow foreign debts according to actual financing needs, ultimately achieving full convertibility of non-financial enterprise foreign debts in the Hainan Free Trade Port.
Achieving Free and Convenient Entry and Exit of Personnel:
Further relax restrictions on the entry and exit of personnel.
Implement more flexible temporary entry and exit policies for business personnel and convenient work visa policies, further improving the residence system.
Achieving Free and Convenient Transportation:
Implement a special ship registration review system.
Further relax airspace control and route access restrictions.
Encourage domestic and foreign airlines to increase capacity and open new routes and flights.
Prioritize the issuance of international route flight permits to foreign airlines flying to Hainan when reviewing international route operation permits for foreign airlines based on bilateral air transport agreements.
Achieving orderly and secure data flow.
Innovate the institutional design for data security outbound, explore more convenient methods for assessing the security of personal information outbound.
Initiate institutional integration for the entry of personal information, explore joining regional international arrangements for cross-border data flow, and enhance data transmission convenience.
Actively participate in the formulation of international rules for cross-border data flow, and establish standards and rules for data ownership, data transactions, data security, and blockchain finance.
Further advance fiscal and taxation system reform.
For enterprises registered and substantially operating in the Hainan Free Trade Port (excluding industries on the negative list), corporate income tax shall be levied at a reduced rate of 15%.
Individuals who have resided in the Hainan Free Trade Port for a cumulative period of 183 days or more within a tax year, and derive comprehensive income and business income from within the scope of the Hainan Free Trade Port, shall be subject to progressive tax rates of 3%, 10%, and 15% for personal income tax.
Expand Hainan’s local tax management authority. Corporate income tax and personal income tax are shared between the central and local governments, while revenue from sales tax and other domestic taxes is considered local income.
Hainan is authorized to independently reduce, exempt, or defer the payment of government funds, except those with ecological compensation nature, and to establish administrative fees related to business activities. Central-level administrative fees shall be uniformly regulated by the central government.
Adjustments to central fiscal support policies shall be made in accordance with changes in the tax system, with increased support. Further research on improving subsidy policy frameworks to provide references for China’s participation in the formulation of international subsidy rules.
5. Organizing and Implementing
Strengthening the comprehensive leadership of the Party.
Adhere to arming party members and cadres with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, conscientiously implement the decisions and deployments of the Party Central Committee and the State Council, enhance the “Four Consciousnesses,” firm up the “Four Confidences,” and uphold the “Two Upholds.”
Establish and improve the Party’s leadership system and mechanism for the construction of the Hainan Free Trade Port, fully leverage the role of the Party in overall planning and coordination, and strengthen the Party’s leadership in all aspects and at all levels of the construction of the Hainan Free Trade Port.
Taking the Party’s political construction as the overarching principle and enhancing organizational strength as the focus, comprehensively improve the quality of Party building to provide strong political guarantee for the construction of the Hainan Free Trade Port.
Strengthen the construction of grassroots Party organizations, guide Party members to play a vanguard and exemplary role, and build grassroots Party organizations into strong fortresses for promoting the construction of the Hainan Free Trade Port.
Improve the evaluation system for cadres reflecting the requirements of the new development philosophy and a correct view of achievements, establish incentive mechanisms and error-tolerance and correction mechanisms, and firmly support and encourage cadres who dare to take responsibilities, work diligently, and do not seek personal gain. Integrate the core socialist values into all aspects of economic and social development.
Persist in rectifying discipline and upholding integrity, strengthen disciplinary inspection and supervision work, and create a good environment of clean and upright governance.
Improve the implementation mechanism.
Under the guidance of the Leading Group for Advancing the Comprehensive Deepening Reform and Opening up in Hainan, the Hainan Province must effectively fulfil its main responsibility, strengthen organizational leadership, and make every effort to promote the construction of the Hainan Free Trade Port.
Relevant central and state organs should actively guide and promote the construction of the Hainan Free Trade Port in accordance with the requirements of this plan, further refine related policies and measures, formulate and implement implementation plans, and ensure the effectiveness of policy implementation.
Promote the establishment of a working group to guide the promotion of Hainan’s Free Trade Port construction under the leadership of the Leading Group for Advancing the Comprehensive Deepening Reform and Opening Up in Hainan.
Departments such as the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce, the People’s Bank of China, and the General Administration of Customs will dispatch cadres to Hainan to provide on-site guidance for the construction of the Free Trade Port, and relevant situations will be promptly reported to the leading group.
The Development Research Centre of the State Council will organize a comprehensive process evaluation of the construction of the Hainan Free Trade Port, and establish an expert advisory committee to provide advice and suggestions for the construction of the Hainan Free Trade Port.
Steadily promote policy implementation.
Increase efforts to urge implementation, solidify and refine various policy measures, and achieve tangible results. Carefully study and properly address new situations and problems encountered in the construction of the Hainan Free Trade Port, conduct pilot work for some major policy measures, and actively and steadily promote the implementation of the plan.
Related article: Compilation of important policies for Hainan Free Trade Port (February 2024)
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