Opinion

Hainan FTP to boost regional economic integration in East Asia

China on December 18 launched island-wide special customs operations in the Hainan Free Trade Port (FTP), the world's largest FTP by area. The move is widely seen as a landmark in China's efforts to promote free trade and expand high-standard opening-up. Officials describe the special customs system as offering "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. This enables regional supply chain optimization, rule alignment, and market integration, reaffirming China's determination to expand high-level openness and share development opportunities with the world, while boosting economic integration in East Asia.

The core advantage of special customs operations lies in both policy and geographic dividends. The share of zero-tariff products in the Hainan FTP has been raised from 21 to 74 percent, expanding the list of related items from 1,900 to over 6,600. Beyond zero tariffs, lower tax rates form another major policy advantage of the Hainan FTP, by reducing costs of business operation. Companies can benefit from a preferential corporate income tax rate of 15 percent, while their staff may qualify for a 15 percent personal income tax rate.

From a geographic perspective, Hainan is strategically located at the maritime crossroads of the South China Sea, a key passage for multiple international shipping and air transport routes. Its 4-hour flight radius covers 21 countries and regions in Asia, encompassing approximately 47 percent of the global population and 30 percent of the global Gross Domestic Product (GDP). This geopolitical advantage positions Hainan as a bridge for regional economic cooperation in East Asia, providing fundamental conditions for it to serve as an open gateway.

The island-wide special customs operations also facilitate the alignment and innovation of rules and standards within East Asia. Hainan will promote the convergence of rules and standards within the region, serving as a "testing ground" and a "stress test" for aligning with high-standard international trade and economic rules. This provides a new paradigm for building a more inclusive and resilient economic and trade ecosystem in East Asia.

Policy

1. The General Administration of Customs recently introduced a new round of 23 support and service measures to promote the high-quality development of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin. The measures involve aspects such as promoting the diversified development of Macao's industries, facilitating the daily life and employment of residents in Hengqin and Macao, and advancing the integrated development of the Guangdong-Hong Kong-Macao Greater Bay Area market. In the first 11 months of this year, the total import and export volume of the Cooperation Zone exceeded RMB 40 billion, representing a year-on-year increase of over 70 percent.

2. China's autonomous driving industry has entered a new phase of accelerated development, transitioning from testing to mass production, as Beijing Traffic Management Bureau of the Public Security Bureau approved three intelligent connected vehicles with level-3 highway autonomous driving licence plates on December 23. This milestone event showcased that China has pioneered the Level-3 autonomous driving era.

Data

1. China's railway freight volume maintained steady growth in the first 11 months of 2025, contributing to lower logistics costs across the economy and supported the stable operation of the national economy. The national railway system transported a total of 3.7 billion tonnes of cargo in the period, marking a year-on-year increase of 2.7 percent, China State Railway Group Co., Ltd. said on December 19.

2. This year, China's ports have maintained a positive operational trend. In the first 11 months, cargo throughput showed rapid growth, increasing by 4.4 percent year-on-year.

3. According to the National Energy Administration, the annual investment in major energy projects is expected to reach RMB 3.54 trillion this year, representing an 11 percent year-on-year growth. The target set in the "14th Five-Year Plan" outline, which aims to raise the proportion of non-fossil energy in total energy consumption to around 20 percent, is about to be exceeded.

4. China's animated film box office surpassed RMB 25 billion (about USD 3.54 billion) in 2025, making it the highest-grossing year for animated movies in the country's history, according to data from online ticketing platforms.

5. In the first half of 2025, digital consumption reached RMB 9.37 trillion (about USD 1.3 trillion) in China, accounting for 46.5 percent of total household consumer spending, according to a report on digital consumption for 2025 released by the China Internet Network Information Center.

6. The eastern and middle routes of China's South-to-North Water Diversion Project have recently celebrated the 11th anniversary of their full operational launch. The project has transferred over 84.5 billion cubic meters of water to the drought-prone north via the eastern and middle routes, according to China South-to-North Water Diversion Co., Ltd.

7. In 2025, China's public fund market achieved a historic breakthrough. The scale of ETFs surged to RMB 5.78 trillion, while the issuance scale of FOFs exceeded RMB 80 billion within the year, both setting new records.

8. According to an announcement from the State Administration for Market Regulation on December 23, China's corporate credit index reached 162.66 in November this year, indicating a steady and progressive improvement in corporate credit levels.

9. The number of charging piles for electric vehicles (EVs) in China exceeded 19.32 million as of the end of November this year, marking an increase of 52 percent from a year ago, official data showed on December 23.

10. International gold prices continued their upward trend in recent days. Driven by this, the price of gold denominated in RMB also reached a new high. On December 23, some branded 24k gold jewelry prices exceeded RMB 1,400 per gram for the first time.

(Source: Economic Daily)