The Hainan Free Trade Port (FTP) raw and auxiliary materials ‘zero tariff’ policy, which was implemented in Dec., 2020, has been in force for four years. According to Haikou Customs, as of this November, raw and auxiliary materials worth a total of 8.574 billion yuan ($1.17 billion) were imported under the policy, saving companies 1.171 billion yuan ($0.16 billion) in taxes.
Over the past four years, the policy has continued to be improved and expanded, with the list of materials included under the policy growing from the original 187 to the current 356. The policy applies to food processing, bio-pharmaceuticals, aviation maintenance, and other areas, extending from materials for internal use to processing and manufacturing as well as trade in goods and services.
“Thanks to the 'zero tariff' policy on raw and auxiliary materials, we can purchase materials abroad, saving the company quite a bit of money in production costs annually,” said the head of customs business at Hainan Poly Pharm. The policy also makes it easier for companies to connect with international raw materials markets, improving the competitiveness of their products in domestic and international markets alike.
The 'zero tariff' policy for raw and auxiliary materials states that before the whole island of Hainan enters into independent customs operation, raw and auxiliary materials imported by enterprises registered in the Hainan FTP as independent legal entities to be processed on the island for manufacturing or service trade which need raw materials from abroad and target the overseas market will be exempted from import tariffs, import value-added tax, and consumption tax.
In addition, Hainan's 'zero tariff' policy advantages promote the development of key industrial parks with new quality productive forces, speeding the creation of a modern industry system.
The Hainan one-stop aircraft maintenance base, located in the Haikou Airport Comprehensive Bonded Zone, takes full advantage of Hainan's tariff-free import of aviation maintenance materials, no maintenance deposit, and other policy benefits. Over 1,700 aircraft maintenance projects have been completed at the base, and the auxiliary parts maintenance workshop has completed work on over 40,000 auxiliary parts. Between January and November, the value of bonded maintenance completed in the industrial park was 4.5 times greater than maintenance completed over the same period in the previous year.
In the Yangpu Economic Development Zone, new material and new energy industries are popping up at a rapid rate. The Hainan Xingzhihai New Materials Company has invested a total of 1.056 billion yuan ($0.14 billion) in the production of 20,000 tons of battery-grade lithium hydroxide. The company enjoys the benefits of the 'zero tariff' policy for the import of raw and auxiliary materials, and the finished product is expected to save around 10% in taxes.
