On January 12, the annual Provincial Two Sessions officially opened. 2023 will play a critical role in accelerating the operation of the Hainan Free Trade Port. On January 13, Governor Feng Fei delivered the Government Work Report to the conference, saying that Hainan will complete the hardware and software construction for the island's complete independent customs operation on schedule. It was further emphasized that—prior to the start of the island-wide customs clearance procedures— all necessary stress tests be fully carried out to ensure a smooth transition into the fully independent customs operation scheduled to go into effect by the end of 2025.

How is Hainan preparing for such a mammoth undertaking? And how exactly will independent customs operations work? It will all rely on a key import management system known as “Free Flow Through the First Line and Strict Control at the the Second Line.” The first line refers to the international border between Hainan and the rest of the world, through which goods will be able to freely flow. The second line refers to to the internal border between Hainan and the rest of the Chinese Mainland.  

Referring to the Government Work Report, let’s take a look at how the stress tests will be carried out. Firstly, regarding hardware, it is necessary to promote the construction of the infrastructure and inspection facilities at "second-line ports," these ports' information supervision platforms, and their high-standard comprehensive anti-smuggling law enforcement stations. As of now, the infrastructure requirements of the main body of this project’s work are already done.

And that brings me to personnel.  A complete system needs software to operate. For this, it is necessary to speed up the establishment of a systematic free trade port system. In-depth interpretation and extensive publicity of this system will allow more preparation time for market players. After independent customs operation starts, supervision measures for goods and articles entering the "second line" must form a scientific and efficient supervision model and process.

At the end of 2022, the Economic Work Conference of the Hainan Provincial Party Committee made it clear that the construction focus of the Hainan Free Trade Port is about to enter the policy system’s stress testing period. This year's Government Work Report once again responded to the deployment of the Provincial Party Committee's Economic Work Conference and further proposed a specific implementation plan in the form of fully implementing stress tests. The key is to intensify "front-line" liberalization efforts, fully carry out the first 27-item batch, and roll out the second batch of stress test items. In Yangpu, a closed-off and independently operated stress test area will be built; the Yangpu Bonded Port Area policies will be extended to the Yangpu Development Zone, and the value-added processing tariff exemption policy on domestic sales will be extended to eligible enterprises across the island. Rolling out implementation of policies will verify the effect of stress testing.

After independent operation begins, Hainan will implement the free trade port policy system comprehensively and continue to move towards having the world's highest level of openness. As the Hainan Free Trade Port’s doors to the outside are opening wider and wider, it has indeed become an essential gateway for domestic enterprises to go abroad, and for foreign investors to enter the Chinese market, it also gives us beautiful expectations for the FTP's prospects after independent customs operation begins.