Hainan has begun “closed customs operations” for its free trade port reports Caixin, marking a milestone in China’s experiment with deeper financial and trade liberalization.
In customs terms, “closed operations” mean the entire island will function as a special customs-supervised zone, where goods, capital and people can move freely between Hainan and overseas markets, while flows between Hainan and the rest of China remain subject to standard customs controls and taxes.
The model effectively makes Hainan a “domestic offshore” zone, allowing companies on the island to benefit from policies such as zero tariffs, while maintaining regulatory boundaries with the mainland.