China’s Ministry of Finance released a new policy framework on July 23 detailing the tax regime for goods entering, exiting, and circulating within the Hainan Free Trade Port (FTP) after the island’s full customs closure. Under the new policy, Hainan will establish a “first line” separating it from overseas and a “second line” separating it from mainland China. Enterprises registered in the FTP will be exempt from import duties, value-added tax (VAT), and consumption tax when importing non-listed goods. The policy expands “zero-tariff" items to approximately 6,600 tariff lines, covering 74% of applicable goods, reducing business costs and boosting market vitality.