Hainan FTP delivers robust results of island-wide customs regime in H1

In the first six months since island-wide special customs operations were launched, Hainan Free Trade Port has delivered robust economic results, with duty-free sales surging, trade expanding and the FTP's cross-border financial account system gaining significant traction.

Duty-free shopping, which is a key driver of Hainan's consumption-led growth, continued to increase between January and June, according to data from Haikou Customs. While the value of offshore duty-free sales reached 19.92 billion yuan ($2.9 billion), up 18.8 percent year-on-year, the number of shopping trips increased 12.6 percent to reach 2.79 million.

A working model that combines culture, tourism and events linked to duty-free shopping has helped broaden the customer base, with the 6th China International Consumer Products Expo, the ABB FIA Formula E World Championship and the 6th Asian Beach Games all attracting international visitors and boosting consumption.

Retailers have largely benefited from policy tailwinds. An offshore duty-free rule implemented in November allows Hainan residents, including expatriates living on the island, who have traveled outside Hainan, to purchase duty-free goods for on-the-spot pickup for up to one year following their trip. Previously, Hainan residents could only buy duty-free goods when they were about to leave the island, and many items had to be picked up at the airport or other ports before departure.

Hou Xiaofei, marketing director of Global Premium Duty Free Plaza, said the key policy, which supports promotional campaigns for local shoppers, has helped boost foot traffic at the plaza by 32 percent year-on-year during the first half of 2026.

The momentum has prompted duty-free operators to diversify product offerings. At the China Duty Free Group's Haikou Meilan Airport Duty Free Shop, a cluster of new brand stores opened recently across categories including luxury watches, cosmetics, fragrances and health supplements.

The airport duty-free operator said it added nearly 4,000 square meters of new commercial space and about 40 new storefronts from January to June. To further engage travelers during the peak summer season, the retailer also launched an interactive promotional campaign themed around experiential shopping, blending in-store activities with elements of entertainment.

Looking ahead to the second half of the year, Hainan's duty-free market is widely expected to sustain its upward trajectory. The Hainan Island Carnival, a month-long event that kicks off on July 18, will feature coordinated promotions linking duty-free retailers with hotels, scenic spots and local merchants.

Beyond consumer-facing industries, Hainan's financial infrastructure has emerged as a key development pillar. The multifunctional free trade accounts have become the core cross-border financial channel. By the end of June, the total business volume processed through these accounts had exceeded 600 billion yuan.

Notably, in the six months since the island-wide special customs regime took effect, the system recorded nearly 300 billion yuan in new transactions. Currently, 13 banks in the province offer these account services, with over 1,200 accounts opened and fund flows covering 105 countries and regions.

The accounts offer companies significant efficiency gains in cross-border settlements. Chen Qiuyi, financial director of Sunrise Fuel (Hainan) Co, said her company can now process cross-border payments online without the need for offline document reviews.

"A payment instruction can quickly and securely reach overseas accounts," Chen said, adding that the process, which previously involved one to two working days, could now be completed within a couple of hours.

The accounts also provide businesses with flexible exchange rate management.

Ye Hong, general manager of the transaction banking department at the Bank of China's Hainan branch, noted that the accounts support both onshore and offshore exchange rates, allowing companies to choose the more favorable rate based on their business needs and helping them manage currency risks and reduce overall financial costs.

Ye said the bank will continue expanding account coverage, refining policies and exploring institutional innovations to support the FTP's high-level opening-up.

chenbowen@chinadaily.com.cn