Free Import Tax in Hainan, Subsidies for Loans and More

The Hainan Free Trade Port (FTP) will have independent customs operation starting from December 18, 2025. From then onwards, companies and other entities registered in the FTP will be exempt from import taxes on goods (not listed in the import taxation catalog) when traded only within the FTP or outside China's customs territory. In addition, imported goods with a value added of 30% or more in the province (listed in the encouraged industry catalog) will be exempt from import taxes when then entering the rest of China's customs territory.

China unveiled plans to develop Hainan into an FTP back in 2018, and this is now another essential step for Hainan to become a major regional base for processing, re-exporting, and remanufacturing. However, the liberalization of capital and data flows will be key to elevating the region into the desired global investment and innovation hub, which is still a long way to go.

The Ministry of Commerce (MOFCOM) and relevant authorities issued a notice to extend eight service sector opening-up policies from pilot cities and free trade zones to other cities and regions nationwide. Notable measures include replicating experiences in establishing and updating negative lists for cross-border data transfer in key industry sectors (12 cities), upgrading international data centers and cloud computing centers to provide cross-border data processing services (12 cities), and setting up standardized Guangdong–Hong Kong–Macao cross-border data flow rules (9 cities in the Greater Bay Area).

This is the second time in 2025 that MOFCOM has extended service sector pilot measures to more cities and regions. The latest expansion aims to further ease foreign investment and trade restrictions in data management and transfer. China sees the services sector's vast potential for driving economic growth, and successful pilot innovations in other service areas are also expected to be scaled nationwide. 

The State Council decided to establish a new K visa category for young foreign science and technology talents, effective from October 1. This K visa targets foreign STEM (science, technology, engineering, or mathematics) talents holding a bachelor's degree or above from renowned global universities and research institutions, or those engaged in related research at such institutions. The visa holders may participate in education, research, cultural exchanges, entrepreneurship, and business activities in China. 

China is stepping up its efforts to recruit foreign talents, especially amid increasingly fierce global tech competition. This measure is part of a broader strategy to strengthen China's innovative capacity and further advance its tech self-reliance. It is likely to offer longer validity periods and improved residence options for the K visa holder. The detailed implementation regulations will be announced later.

The Ministry of Finance (MOF) and other departments jointly issued the Implementation Plan for Fiscal Interest Subsidy Policy on Personal Consumption Loans. It covers all individual consumer loans below CNY 50,000, as well as loans of CNY 50,000 or more used for consumption in areas like private passenger cars, elderly care, childbirth, education and training, culture, tourism, home furnishings, electronic products, and healthcare. The subsidy rate is 1 percentage point per year, capped at 50% of the loan contract interest rate, with a maximum term of 1 year. The subsidy period runs from September 1, 2025, to August 31, 2026.

This shows China's continued focus on boosting domestic consumption as a driver of economic growth. However, a real increase in household income or confidence in future earnings would rather tap consumption potential. The relatively small consumer loan rebate is unlikely to give a big boost to household credit demand. 

The Ministry of Finance (MOF) and other departments jointly issued the Implementation Plan for Loan Interest Subsidies for Service Sector Operators, effective from March 16 to December 16, 2025. It covers service sector operators in consumer areas including catering, accommodation, healthcare, elderly care, childcare, housekeeping, culture, entertainment, tourism, and sports. The subsidy rate is 1 percentage point per year, with a maximum subsidized loan amount of CNY 1 million per entity, and a maximum term of 1 year.

This reflects China's ongoing effort to stimulate domestic consumption by supporting service industries that directly interact with households. As the consumer trade-in program's impact on consumption gradually wanes, Chinese authorities are turning to give subsidy support for high-quality services to encourage spending. While this can help ease the burden on service-sector companies, there is still a long way to go to boost consumer demand for services.

The People's Bank of China and six other government agencies issued the Guiding Opinions on Financial Support for New Industrialization, setting a roadmap for a robust financial system to drive high-end, intelligent, and green manufacturing by 2027. Key measures include expanding long-term capital for digital infrastructure, the industrial internet, and data and computing centers, boosting funding for innovative start-ups, strengthening financial support for industrial clusters, and improving supply chain finance services.

It is rare to see such a high-level policy strategy jointly issued by seven top financial regulators and institutions. This shows that China is moving faster to adaptits financial system towards fostering innovative, high-tech development.