Hainan to attract the return of overseas spending

How can consumer spending be stabilized and expanded in China? This issue has recently garnered much attention at the 2021 Chinese National Two Sessions.

The global business environment has undergone drastic changes in the last year. Whereas due to Hainan’s beneficial policies, the province’s island departure duty-free industry still reaped a profit of over 30 billion yuan in 2020, doubling that of the previous year.

In the first two months of 2021, the nine island departure duty-free shops in Hainan served 1.529 million shoppers, a jump of 191% from last year, while total revenues reached 8.49 billion yuan, a year-on-year increase of 359%.

More and more preferential policies are being issued in Hainan, which shows that more and more benefits are on the table. This means that consumer spending will return to Hainan from overseas despite the pandemic.

(Photo by Hinews.cn)

In fact, duty-free shops are not the sole choice for purchasing cross-border commodities in Hainan. As an emerging form of trade, the cross-border e-commerce industry has bucked the negative trends of the global economic recession with advantages in the areas of online trade, contactless delivery, and short trade chains.

In 2020, Hainan's cross-border e-commerce retail import volume reached 526 million yuan, an increase of 7.53 times over 2019. Cross-border e-commerce retailers in the Hainan Free Trade Port see a bright future and expanding business opportunities ahead.

(Photo by Hinews.cn)

The Chinese government’s 2021 work report put forward a number of measures aiming to boost consumer spending. It was emphasized that China plans to expand domestic demand and fully leverage the potential of the domestic market to stabilize and expand spending.

According to the Tax-Free World Association, Chinese consumers contributed 40% of global duty-free goods purchases in 2019, plus an overall overseas duty-free consumption volume of 180 billion yuan. However, China's duty-free market accounted for only 8 percent of global sales in the same period.

(Photo by Hinews.cn)

The good news is that remarkable results have been achieved after the implementation of the new preferential duty-free policies in Hainan—the number of island departure duty-free shops has increased to 9, and the number of operating entities has increased to 5, creating a competitive duty-free market in the province.

Additionally, three out of the four highly anticipated lists of“zero-tariff” products in the Hainan Free Trade Port have been published—the zero-tariff policy for vehicles & yachts, the zero-tariff policy for raw & auxiliary materials, and the zero tariff policy for internal use production equipment. The zero-tariff policy for imported goods consumed by residents of Hainan will be issued soon as well, facilitating the purchase of high quality, low priced overseas products by Hainan residents.

Meanwhile, the first China International Consumer Products Expo will be held in Hainan in May 2021. Taxes for imports and sales at the Expo will be exempted, and the incentives will be no less than those offered by the China International Import Expo and the China International Fair for Trade in Services.