China’s Hainan Island takes steps towards goal of becoming a leading free trade port

China’s southern island of Hainan has launched fully independent Customs operations islandwide on 18 Dec, a key step towards its ambition of becoming a globally influential free trade port by 2050, with 74 per cent of goods entering the province now tariff-free, up from 21 per cent previously. While this lowers business costs, challenges such as US tariffs and a shortage of skilled labour remain. Prof Tan Kong Yam, NTU’s Emeritus Professor and political economist, told The Straits Times that Hainan is unlikely to become another Shenzhen or Hong Kong in the near term but could instead develop into a rules-based platform for specific cross-border business models involving on-island assembly, testing, or customisation before re-exporting or accessing the mainland under clear conditions.

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