Hainan trials consumption for development

On April 20, Hainan in South China launched a duty free policy for travelers who leave the island for inland. The island also has an existing exit duty free policy, launched in April 2008, which benefits non-mainland residents who shop in Hainan's downtown duty free shops and leave China via Hainan, and an exit VAT refund policy, introduced on January 1st this year.

The three policies can be conceived as a goods-for-services or consumption for development experiment. They are aimed at stimulating consumption in return for development of the local tourism industry and other related services.

The central government formulated the economic restructuring strategy and selected Hainan as a pilot area due to its unique geographical location and industrial structure.