Hainan Launches First Duty-Free Stores for Local Residents

In a significant development for local residents, Hainan Province in southern China has officially inaugurated its first duty-free stores aimed exclusively at island inhabitants. This initiative is designed to stimulate local consumption and enhance shopping tourism, particularly as the Spring Festival holidays approach.

The first set of five duty-free outlets, located in the cities of Haikou, Sanya, and Danzhou, represents a milestone in Hainan's retail landscape. These stores operate under a newly established zero-tariff policy applicable to select imported goods, facilitating a more affordable shopping experience for residents.

Shao Huanhuan, manager at Haikou International Duty Free City, expressed pride in being one of the designated outlets for this initiative. She emphasized how this program showcases the overarching goals of the Hainan Free Trade Port, aimed at increasing openness and inclusivity.

Under this scheme, families of three can enjoy an annual duty-free shopping allowance of 30,000 yuan, approximately 4,341 USD. According to Shao, this amount is tailored to meet the annual needs for various imported daily necessities.

Eligibility for this duty-free shopping allowance extends to all residents within Hainan, including Chinese citizens with local identification and foreign nationals residing in the province with valid residence permits. Each individual is entitled to a shopping limit of 10,000 yuan, with no restrictions on the number of purchases.

The range of goods covered by this policy includes essential daily items such as food and beverages, household products, and supplies for mothers and children. These offerings are designed to address the diverse needs of local consumers, as stated in reports by Xinhua.

This initiative follows a joint policy introduced on February 5 by multiple government bodies, including the Ministry of Finance. The policy allows qualifying residents to acquire imported items without facing import duties, value-added tax, or consumption tax, thus enhancing affordability.

Officials have emphasized that the primary goal of these new measures is to tangibly benefit local residents by lowering overall living costs while expanding their shopping options.

Local authorities have confirmed that the policy is open to various types of businesses, including state-owned, private, and foreign enterprises, effectively broadening the competition and choice available to consumers.

From a broader context, Hainan's financial officials consider this initiative a pivotal incremental tax policy introduced by central ministries since the province initiated its customs operations in December 2025. It forms part of the larger framework intended to improve the well-being of the population.

By linking local resident consumption to offshore duty-free reforms, this policy aims to increase local demand and potentially redirect spending from tourists back to the island, according to Li Shijie, head of the Hainan Institute of Open Economic System.

The recent launch comes against a backdrop of strong performance in Hainan's duty-free sector, with January sales reaching 4.53 billion yuan, indicating a year-on-year increase of 44.8 percent. Statistics show a significant rise in shop visits and items purchased, underscoring the potential for Hainan to evolve into a prominent international consumption hub.