Hinan Free Trade Port
On June 1, 2020, Beijing rolled out a master plan, laying out a series of special policies, in a bolder move to develop Hainan into a high-level free trade port (FTP). The objective here would be to make Hainan FTP at par with other international trade ports like Hong Kong, Singapore, Rotterdam, and Dubai by 2050.
the Hainan FTP aims to build a port area with more liberalized special customs supervision, which will allow free cross-border flows of trade, investment, capital, personnel, transport, and data. To improve its smaller-scale economy and develop local industries, Hainan will also release its own Negative List and provide broader market access for foreign investment in specific industries like healthcare, telecommunication, tourism, and education.
In addition to the above tax breaks, as a free trade port, Hainan also imposes zero-tariff policy on offshore duty-free goods. Some of the other imported goods will also be exempt from import duties, import value-added tax (VAT), and import consumption tax (CT) before the whole island becomes a separate customs jurisdiction.
After the whole island is ring-fenced and the tax regime is streamlined, all goods – that are outside the to-be-formulated Negative List of commodities subject to import taxes – will possibly be exempt from import duties.
In addition, for enterprises engaged in encouraged sectors in Hainan FTP, their imported products can be exempted from import tariffs when entering the rest of China, provided that the imported intermediary products get added value exceeding 30 percent after processing in Hainan FTP.
Hainan Boao Medical Tourist Zone
The Hainan medical tourism pilot zone was designed to provide various medical services and a green medical convalescence environment to attract domestic and foreign tourists.
The following are among the new measures introduced to attract greater investment in the zone:
- Allowing in-zone medical institutions to import much needed foreign drugs and medical equipment that are not yet approved by the top drug authority in China;
- Allowing patients to take imported drugs of limited dosage (which have not been registered in China) out of the pilot zone for personal use;
- Allowing research hospitals to collect real-world clinical data from patients using imported drugs and medical devices. The data could be used to expedite the registration and approval process for innovative drugs and medical instruments to enter China;
- Encouraging state-level public hospitals to enter the zone. Three to five public hospitals will be authorized to franchise brand, trademark, and technology to medical institutions in the pilot zone; and
- Building an evaluation center for imported drugs and medical devices to facilitate the clinical use of imported drugs and medical devices.
In this medical tourism pilot zone project, the government will act as an advocate, planner, and regulator while private institutions can capitalize on pilot policy benefits to catch investment opportunities.