Authored by: Feng Xiaopeng , Kalina Solawa and Deng Hui
On July 23, 2025, the State Council Information Office held a press conference announcing that the Hainan Free Trade Port (hereinafter referred to as the “Hainan FTP”) will officially launch the island-wide independent customs operations on December 18, 2025. A series of new policies and supporting documents have been formulated and will be implemented to support the Hainan FTP after the launch of independent customs operations. One of these policies is the Duty-Exemption Policy for Hainan FTP Processed and Value Added Products (hereinafter referred to as the “Policy”).According to the Policy, goods made of imported materials and parts, whose value added through processing in the Hainan FTP reaches or exceeds 30%, will be exempt from import duties when entering other customs area of China (hereinafter referred to as “China’s Mainland” or “Chinese Mainland”, according to The Law of the People’s Republic of China on the Hainan Free Trade Port). For businesses looking to enter the Chinese Mainland market, especially by opening manufacturing facilities in China to produce goods using raw materials and parts imported from regions and countries outside China’s customs territory, this Policy offers significant benefits by reducing enterprise costs.