The Chinese government proposes to increase the new annual tax-free shopping limit to RMB1t00,000 ($14,000) per person in Hainan, China’s southernmost province. This will help the country to ensure its citizens shop only from its prestigious local brands. The new limit is more than three times the current RMB 30,000 ($4,200), and forms part of a much broader 60-point plan for the construction of a free trade port on the island.
Some of the other aspects of the free port plan relevant to duty-free retailing include its intention to grow tourist numbers by making Hainan an international aviation hub; liberalizing air rights including fifth and seven freedoms; and the construction of a cruise tourism pilot zone.
Hainan’s offshore duty-free policy was launched in April 2011. The allowances are available to domestic and foreign visitors including residents of Hainan province who are at least 16 years old and who board flights, trains, or ships to leave the island province.
Government statistics show that Hainan generated duty-free sales of almost $8 billion since 2011. Duty-free products that can be bought cover all the key luxury categories including jewelry, watches, perfume, cosmetics, sunglasses, fashion and accessories, as well as sports goods and confectionery.
The main offshore duty free enterprises in Hainan are China Duty Free Group’s extensive Haitang Bay Shopping Complex in Sanya, and Haikou Meilan International Airport’s duty free stores. Earlier this year, two smaller duty-free shops were added to the mix: Haikou Riyue Plaza and another in Qionghai Bo’ao.