HAIKOU /China/, July 17. /TASS/. South China's Hainan Province has exempted imported goods worth 12.1 bln yuan ($1.78 at the current exchange rate of the People's Bank of China) from customs duties over the past five years, Hainan Daily newspaper reported, citing local customs authorities.

According to the newspaper, duty exemptions enabled importing companies to save 920 mln yuan (over $135 mln) over the period. The preferential policy benefited 11 industries producing high value-added goods, including pharmaceuticals, medical equipment manufacturing, food processing, rubber production, and plastics manufacturing.

As a result, the Hainan Free Trade Port has received a strong boost for high-quality development. The exemptions applied to goods containing imported components that, after processing in the province, achieved a value-added share exceeding 30%.

Since the second half of 2021, when the pilot duty-free trade zone was launched at Yangpu Deep-Water Port in Danzhou in the northwestern part of the island, the preferential policy has attracted numerous enterprises to Hainan. In particular, the province has developed a substantial high-quality food production cluster.

Since December 18 of last year, when Hainan transitioned to an offshore customs regime, the duty-free import policy has exempted importers from paying approximately 39.5 mln yuan ($5.8 mln) in customs duties. During this time, the authorities have significantly simplified companies' access to preferential policies, expanded the list of components that can be sourced abroad, optimized the formula for calculating value added, and broadened the scope of related incentive measures.

According to the management of Hainan Jingwei, a Hainan-based manufacturer of latex threads, the Hainan Free Trade Port's policy exempting from duties products that acquire a significant share of value added through local processing is becoming increasingly popular among businesses. In the company's assessment, the policy enables enterprises to substantially reduce costs and improve the competitiveness of their products.