ISTANBUL

China on Thursday launched a separate customs regime island-wide in the Hainan Free Trade Port (FTP), the world's largest FTP by area, allowing the entry of overseas goods freely, state news agency Xinhua reported.

The FTP area located in the southern island province of Hainan, is roughly the size of Belgium, where foreign firms can now benefit from lower tax and production costs, and use the island to tap into the Chinese mainland market.

Officials describe the system as "freer access at the first line," referring to freer trade between Hainan and areas outside China's customs borders, and "regulated access at the second line," which involves applying standard customs controls for goods moving from Hainan to the mainland.

The share of zero-tariff products in the Hainan FTP has been increased from 21% to 74%, expanding the list of related items from 1,900 to over 6,600.

Zero-tariff goods processed in Hainan that achieve an added processing value of 30% or more can be sold to the mainland China duty-free.

Hainan, which currently has a population of roughly 10 million, became China's largest special economic zone in 1988, hosting more than 9,600 foreign-invested enterprises since 2020, according to official data.

In recent decades, China has established 22 pilot free trade zones, with largest being consisting of the entire Hainan Island with a 30,000 square km area.