The sealing-off of Hainan, China, is about a month away. The sealing-off is a high-level opening measure that converts Hainan into an independent customs system separate from mainland China. Developing Hainan into a free trade port is one of Chinese President Xi Jinping's pledges, and the first phase of development is nearing completion this year. As China stressed in the 15th Five-Year Plan (2026–2030) that it would expand the level of external opening, Xi said, "The Hainan free trade port is an important gateway leading external opening."
According to state-run China Central Television (CCTV) on the 7th, Xi received a report on the construction of the Hainan free trade port in Sanya, Hainan Province, on the 6th and said, "We will officially launch the sealing-off of the entire island of Hainan on Dec. 18," calling it "a symbolic move toward expanding high-level external opening and building an open world economy."
According to Xinhua News Agency, the Hainan free trade port is a large trade-opening project that turns the entire island of Hainan into a single special zone separated from mainland China. The goal is to simplify customs and administrative procedures and completely exempt tariffs on certain items to create a free business environment.
Since June 2020, authorities have accelerated institutional and infrastructure preparations aimed at sealing off the entire island. According to Haikou Customs, as of June, duty-free goods imported through the Hainan free trade port amounted to 241.6 billion yuan (about 49.4 trillion won), with the scale of exemptions reaching 4.68 billion yuan (about 956.9 billion won). As of July, the cumulative sales of these goods reached 10.46 billion yuan (about 2.14 trillion won), and the amount of exemptions reached 810 million yuan (about 1.656 trillion won).
The free trade port's duty-free policy is attracting corporations. At a meeting on free trade port construction held at the end of Aug., more than 100 private corporations participated, and 42 projects spanning energy, agriculture, finance, and distribution were signed. Major corporations such as New Hope Group, Geely, and Huawei, and emerging corporations such as UNITREE and EHang are included.
In addition, special-vehicle modification corporation Hezhili Auto plans to expand its modification business for medical, police, and emergency vehicles in Hainan. It also plans to carry out modification projects targeting tourism demand, including campers and business vehicles.
Institutions and infrastructure to support the operation of the sealing-off are also being strengthened. The Hainan free trade port operates under a system of "first-line opening (overseas), second-line management (mainland China), and freedom within the island." Hainan will be fully opened to overseas markets and flows within the free trade port will be liberalized, while meticulous management will prevent impacts on the mainland China market. Under this system, steps such as expanding duty-free treatment within the Hainan free trade port, invigorating foreign investment, and easing regulations on the movement of people, capital, and data are being implemented in stages.
On the infrastructure side, smart inspection equipment is being rapidly installed and tested at ports across Hainan, and non-face-to-face customs clearance services using facial recognition and big data are being introduced.
In a speech on the 6th, Xi said, "We should expand institutional opening to further raise the level of trade and investment liberalization and facilitation, deepen opening in circulation to better promote the cross-border flow of production factors, build a more open talent mechanism to provide strong talent support for free trade port construction, optimize government services through administrative system reform, and create a first-class business environment that is market-oriented, law-based, and internationalized."