Hainan’s island-wide customs closure has been in operation for half a year, and the first batch of data has been released.
Since its official launch on December 18, 2025, as of the end of May 2026, Hainan’s total foreign trade import and export volume has increased by 53.7% year-on-year, the number of foreign trade enterprises registered with the customs has increased by 57.8%, and the number of new foreign-invested enterprises has increased by 37.6% year-on-year.
Behind these figures is the implementation of a complete regional development strategy at the national level.
If you only look at the customs supervision adjustment of the customs closure itself, you will miss the really important thing – Hainan’s positioning has never been an isolated island experiment, but China’s triple move to simultaneously complete institutional pathfinding, regional coordination and geographical layout under the dual circulation pattern.
In the dimension of institutional experimentation, the border closure carries a “replicable” stress test.
From the perspective of the country’s top-level design, the core value of Hainan’s customs closure is not “how many discounts to give Hainan”, but “what rules to try out for the whole country.”
In the six months since customs was closed, the proportion of “zero-tariff” commodity tax items has increased from 21% to 74%, approaching the level of world-class free ports such as Singapore and Dubai.
But the strategic intention behind this number is far more complicated than the tax cut itself.
Chi Fulin, president of the China (Hainan) Reform and Development Institute, clearly pointed out that the current 74% zero-tariff coverage is still lower than the 94% level of the China-ASEAN Free Trade Area 2.0 Agreement, and far lower than the level of more than 99% in Singapore and Hong Kong. In the future, it is necessary to promote the transformation of “zero-tariff” from catalog management to legal arrangements.
This means that the state’s experiment in Hainan is not to provide a one-time policy, but to leave a set of institutional frameworks that can be continuously upgraded – after testing, it will be promoted nationwide.
What is more critical is the dimension of the stress test.
After the customs closure, Hainan completed two things at the same time: First, “first-line liberalization”, the average customs clearance time for imported goods was reduced by 20%, and low-risk goods were “released in seconds”; second, “second-line control”, the social management information platform realized island-wide closed-loop control, and no systemic risks occurred in key areas such as anti-smuggling, cross-border finance, and ecological environmental protection.
There is no precedent in the world for completing “domestic and external customs” supervision in a provincial administrative region of 33,000 square kilometers.
Once this experiment is successful, it means that China has the ability to promote similar institutional arrangements on a larger scale.
From the perspective of industrial opening up, stress testing is also advancing.
Hainan has implemented the country’s shortest negative list for foreign investment access and the country’s first negative list for cross-border service trade. The first wholly foreign-owned hospital has been unveiled and the seventh freedom route has been put into operation.
If these breakthrough policies are proven feasible, they will provide a direct reference for the opening up of service areas across the country.
In the dimension of regional coordination, Hainan’s customs closure is reshaping the economic geography of South China’s coast.
For the provinces surrounding Hainan, the customs closure is not as simple as “building a duty-free island next door”, but has actually changed the logic of regional division of labor.
Judging from the relationship between Hainan and the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong will firmly rank as Hainan’s largest source of foreign investment in 2025. The two parties have launched cooperation projects such as direct connection of Qiong-Hong Kong submarine cable and joint bond issuance to jointly build a cross-border industrial chain of “Hainan Gateway + Hong Kong Services”.
The “15th Five-Year Plan” of the two provinces of Guangdong and Qiongzhou has clearly stated the collaborative goal of “moving in the same direction”: Guangdong exports mature manufacturing and marine industry technical capabilities, Hainan exports the advantages of the open free trade port system, and jointly promotes the integration of ports and shipping in the Qiongzhou Strait.
This kind of division of labor is not a slogan in the planning document. After half a year of closing the border, Hainan has 172,100 new registered business entities, a year-on-year increase of 61.07%. A considerable proportion of these companies use Hainan as a springboard for the mainland market or a headquarters base for Southeast Asia.
The linkage logic with the Beibu Gulf urban agglomeration is equally clear.
Relying on the New Western Land-Sea Corridor, Yangpu Port, as a core shipping hub, forms a multimodal transport network with Guangxi Beibu Gulf Port.
After the Guangxi Water Resources Allocation Project around the Beibu Gulf is completed, the industrial added value of the Beibu Gulf Economic Zone is expected to increase from 169.9 billion yuan to 425 billion yuan in 2035.
The institutional dividends of Hainan’s customs closure will form a combined advantage of “Beibu Gulf manufacturing + Hainan zero-tariff customs clearance” with the industrial upgrading of the Beibu Gulf. The “channel-manufacturing-service” closed loop formed by the three will have a competitiveness facing the ASEAN market that a single province cannot match.
In the geo-economic dimension, Hainan, after closing the border, is becoming a bridgehead for RCEP.
What supports this judgment is not only the geographical location, but also a set of institutional arrangements that are being implemented.
Haikou Customs data shows that as of the end of May 2026, more than 2,000 RCEP certificates of origin have been issued, with a visa value of over 1.5 billion yuan, 2 approved exporters have been cultivated, and companies have independently issued declarations of origin worth 536 million yuan.
Feng Fei, Secretary of the Hainan Provincial Party Committee, made it clear that Hainan will promote the implementation of RCEP provisions in Hainan first, and at the same time actively align with international high-standard economic and trade rules such as CPTPP and DEPA, and fully implement the provisions of the China-ASEAN Free Trade Area Version 3.0 Upgrade Protocol.
This means that Hainan’s institutional opening is not about designing a set of rules behind closed doors, but actively benchmarking against internationally accepted economic and trade standards.
Physical platforms are also following suit.
Hainan Farm has started to build the RCEP International Agricultural and Sideline Products Trading Center, using the model of “overseas direct procurement, Hainan storage, and global distribution” to open up direct trade links with ASEAN countries such as Thailand, Vietnam, and Indonesia.
Chen Bo, a senior researcher at the Institute of East Asian Studies at the National University of Singapore, pointed out that Hainan can rely on its land and market hinterland advantages to create a provincial-level open form that goes beyond the traditional city-based free port.
For ASEAN companies, the institutional dividends created by Hainan’s customs closure mean a low-threshold channel to enter China’s market of 1.4 billion people.
In the South China Sea dimension, Hainan’s positioning is equally clear.
The “Hainan Province’s “15th Five-Year Plan” Marine Economic Development Plan” released in 2026 proposes that the marine economy will account for more than 45% of the province’s GDP by 2030, and the scale of the deep-sea industry will exceed 100 billion yuan.
A relevant report from the China South China Sea Research Institute pointed out that the Hainan customs closure will significantly strengthen its function as a core base for South China Sea development service support, and gradually build a practical carrier for a regional maritime community of shared future through cooperation in low-sensitive areas – waterway protection, meteorological early warning, maritime search and rescue, and coral reef ecological restoration.
Looking at the three dimensions of institutional experimentation, regional coordination and geo-economics together, the national strategic logic of Hainan’s customs closure becomes clear: this is not an isolated case of “special policies for Hainan”, but a first move by China in the dual circulation pattern.
Internally, it is responsible for the stress test function of pioneering the path for wider opening up across the country; externally, it is building a rule docking and trade hub for ASEAN under the RCEP framework; at the regional level, it is reshaping the industrial division of labor pattern in the three provinces and one region along the South China coast (Guangdong, Hong Kong, Qiong, and Guangxi).
Data from the six months since the customs was closed prove that this design is not just an idea on paper.
However, what needs to be viewed calmly is that the proportion of new foreign-invested enterprises is still low, and large-scale foreign investment is still on the way; in the 54.6% foreign trade growth rate, both the customs closure policy and the base effect contributed, and it is difficult to separate the two.
It takes time to transform institutional dividends into industrial competitiveness.
Hainan’s exam papers have not been handed in yet.
