China’s Hainan free-trade port plan off to fast start as duty-free shopping soars in first week

Tourists, the vast majority of whom were Chinese, spent 450 million yuan (US$64 million) on imported goods at Hainan’s four duty-free malls in the first week of July

The annual per person tax-free limit increased to 100,000 yuan (US$14,300) on July 1 to attract Chinese tourists in particular to spend money at home rather than abroad

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Cosmetics were the most popular duty free purchase, accounting for 51.3 per cent of total duty free sales, followed by jewellery with 14.1 per cent and watches with 11.9 per cent. Photo: Xinhua

Published: 7:30am, 14 Jul 2020Updated: 7:30am, 14 Jul 2020

Duty-free sales on China’s island province of Hainan surged in the first week of July after Beijing raised the annual tax-free shopping limit for tourists as part of its new free-trade port plan.

Tourists, the vast majority who were Chinese, spent 450 million yuan (US$64 million) on imported goods at Hainan’s four duty-free malls in the first week of July, according to the Hainan Customs Administration, after taking advantage of the new 100,000 yuan (US$14,300) annual per person tax-free limit.

The new limit, which was raised from 30,000 on July 1, only applies to purchases made by tourists at Hainan’s four duty-free malls and not duty-free goods purchased overseas and then imported into China. The number of goods covered was also increased to 45 from 38, meaning cellphones, tablet computers, alcoholic beverages, and tea are now included.

The sales for the first week were 58 per cent above the daily average during the first half of the year, as shoppers saved over 65.7 million yuan (US$9.4 million) in taxes, the government estimated.

Beijing announced in early June its plan to transform the tropical island into the world’s largest free-trade port, with one of the main goals to tempt the growing numbers Chinese middle-class tourists to spend more of their money at home rather than abroad.