HAIKOU, July 14. /TASS/. The Chinese authorities have noted an unprecedented increase in demand for goods in Hainan's duty free stores following the new rule of increasing the quota for purchases and will further develop the local consumer market, taking into account best international experience, stated head of the department of statistical analysis of China's General Administration of Customs Li Kuiwen.

"The results of an increase in the quota [allowing one purchase per person from 30,000 to 100,000 (from $ 4,200 to $ 14,200) — TASS] on duty free purchases exceeded all our expectations. On the very first day [July 1] of the rule's entering into force, such popular goods as cosmetics, mobile phones and alcohol were almost completely out of stock," he said at a briefing. "We will take into account the best international management experience and promote Hainan's free trade port development". 

The official noted that new measures to remove restrictions on the nomenclature and quantity of goods sold on the island duty free were taken very well by tourists. "They praised this innovation. <...> Thus, the authorities were able to fully satisfy consumer demand among visitors who enjoy shopping," said Li Kuiwen.

At the same time, he clarified that the customs office intends to tackle resellers, sales agents and smugglers trying to cash in on the benefits of duty free trade. “We will take into account the system of social rating of persons violating duty free rules and reselling, providing agent services for the purchase of goods, or caught smuggling. They will be deprived of the opportunity to use duty free services for three years,” the head of the department explained.

Li Kuiwen recalled that the identified smugglers "will be held accountable in accordance with criminal law." According to the official, currently the main task is to constantly increase Hainan's openness, while at the same time ensuring effective measures of socio-economic control.

According to statistics, on July 1-7 (during the first week of the new rules) sales at Hainan duty free shops exceeded 450 million yuan (about $ 64.34 million). Approximately 77% of this amount was spent on cosmetics, jewelry and watches. There are four duty free stores in the province: two of them are located in Haikou, the rest — in Sanya (in the south) and Boao (east of the island). A pilot program to boost consumption on Hainan was launched in 2011.