Hong Kong, Hainan can ‘forge strong partnership’, build on strengths: John Lee
Hong Kong's leader sees major opportunities in Hainan's new separate customs regime, offering duty-free imports.
Hong Kong Chief Executive John Lee Ka-chiu has called for a strategic partnership with Hainan province, urging the city's business sector to seize opportunities presented by the mainland island's new free-trade port status. The call came after a meeting with Hainan's Communist Party secretary, Feng Fei, on the sidelines of the Boao Forum for Asia. Lee emphasized that the launch of Hainan's separate customs regime in December creates multifaceted business opportunities, particularly for Hong Kong's professional services in finance, law, and accounting.
Hainan, an island 32 times the size of Hong Kong, implemented the new regime to develop into an offshore financial and duty-free hub. Under this system, most overseas goods entering Hainan are exempt from import duties, value-added tax, and consumption tax. However, if these goods are shipped to other parts of mainland China, they are taxed as regular imports. A key provision allows tariff-free entry to the mainland market if imported items are processed in Hainan and achieve over 30% value added. This structure is designed to boost local processing and value addition while positioning Hainan as a unique gateway for trade.
- John Lee met Hainan's party secretary Feng Fei at the Boao Forum, proposing enhanced cooperation.
- Hainan's new separate customs regime, launched in December, exempts most overseas goods from import duties.
- Goods processed in Hainan with over 30% value added can enter the mainland market tariff-free.
Why It Matters
Opens new trade and service channels for Hong Kong businesses in a major Chinese economic zone.