Hainan FTP's tax exemption policies save costs for enterprises

The island-wide special customs operations in the Hainan Free Trade Port (FTP) are expected to save costs for enterprises through tax exemption policies.

China on Thursday launched the island-wide special customs operations in the Hainan Free Trade Port (FTP), the world's largest FTP by area, allowing freer entry of overseas goods, expanding zero-tariff coverage and more business-friendly measures.

Officials describe the special customs system as "freer access at the first line," referring to freer trade between Hainan and areas outside China's customs borders, and "regulated access at the second line," which involves applying standard customs controls for goods moving from Hainan to the mainland.

According to the regulations, zero-tariff goods processed in Hainan may be sold to the mainland duty-free if their local processing generated an added value of 30 percent or more.

That's why Zhong'ao Soup, which produces a condensed version of broth, set up a factory in Hainan.

The factory requires 240 tons of pork bones among other ingredients for its daily production. Since many of the raw materials and ingredients are imported, the company expects to save a significant amount of money under the tax exemption policies.

"The bones are from Brazil, Argentina, Uruguay, Russia and Australia," Liu Peng, general manager of Zhong'ao Soup Industry, told reporters at a warehouse.

The materials would be taxed if they were imported to the mainland. However, the Hainan factory allows the company to process the materials in the FTP and sell the products duty-free to the mainland.

"We spend between 600 and 700 million yuan on raw ingredients every year. We expect to save the 12 percent tariffs on the materials under the beneficiary tax policies," Liu said.

When the factory produces at full capacity, it is able to save costs up to 84 million yuan, or over 10 million U.S. dollars a year.

Since the announcement of the Hainan Free Trade Port in 2018, 80,000 new foreign trade companies have set up in the island.

In addition to tariff exemptions, the proportion of zero-tariff products in the Hainan FTP has been raised from 21 to 74 percent, expanding the list of related items from 1,900 to over 6,600, covering nearly all production equipment and raw materials.

Hainan FTP's tax exemption policies save costs for enterprises

Russia said on Thursday that its armed forces had struck over 100 targets in Ukraine, while Ukraine reported, on the same day, that it had repelled offensives from Russia.

The Russian Ministry of Defense said in its latest report that over the past 24 hours, its forces had conducted strikes on 149 areas, including energy infrastructure serving the Ukrainian forces, assembly workshops and storage points for long-range attack drones, and temporary deployment sites of Ukraine's armed forces and foreign mercenaries. They also destroyed Ukrainian armored vehicles, field artillery, and ammunition depots. Additionally, the Russian air defense system shot down 216 fixed-wing drones belonging to Ukraine.

Meanwhile, the General Staff of the Armed Forces of Ukraine reported that its troops engaged in 134 combat clashes with Russian forces in the past day. They repelled dozens of Russian attacks in areas such as Pokrovsk. Their air, missile, and artillery units struck one Russian warehouse, one control point, and two major targets, and shot down 330 Russian tactical drones.

In another development, Ukrainian President Volodymyr Zelensky said on Thursday that a Ukrainian delegation is en route to the United States to continue peace negotiations.

The talks with the U.S. negotiating team are set to take place on Friday and Saturday, with European representatives also expected to participate, Zelensky told the Interfax-Ukraine news agency.

He highlighted that the key points of contention between Ukraine and the United States include territorial issues and the use of frozen Russian assets.

Zelensky said that, should a peace agreement be reached in the Russia-Ukraine conflict, Ukraine plans to use the frozen assets for reconstruction efforts. However, if hostilities persist, the funds may be directed toward supporting the Ukrainian military, bolstering defense production, and purchasing U.S.-made air defense missiles, he added.

Russia strikes over 100 targets in Ukraine, Ukraine reports repelling Russian offensives