Wine and Spirits Left Off Hainan’s Duty-Free List

The Chinese government has announced that Hainan Province will officially launch independent customs operations on Dec. 18, 2025, as part of its push to transform the tropical island into an international tourism and consumption hub.

The move will turn Hainan into a fully integrated free trade port, allowing visa-free entry for citizens of 85 countries and enabling duty-free access for 6,660 categories of imported goods. However, the exclusion of several key travel retail staples — including wine, spirits, apparel and handbags — from the duty-free list has sparked confusion and disappointment among industry stakeholders.

According to state broadcaster CCTV, the entire island will be designated a special customs supervision zone under a policy framework known as “first-line liberalization, second-line control, intra-island freedom.” This allows qualified goods from overseas to enter Hainan duty-free and move freely within the island. But if such goods are transferred to mainland China, they will be subject to standard import tariffs.

As China’s southernmost province and only tropical region, Hainan is often dubbed “China’s Hawaii” and is a popular winter destination for domestic tourists. Its warm winters, abundant sunshine and beach resorts have made it an attractive holiday choice. The establishment of a duty-free shopping ecosystem has become a key component of the island’s tourism economy.

At a news conference hosted by the State Council Information Office on July 23, Hainan Governor Liu Xiaoming said 2025 would mark the beginning of independent customs operations for the Hainan Free Trade Port. “We will accelerate the construction of an international tourism and consumption center,” Liu said.

However, a jointly issued notice from the Ministry of Finance, the General Administration of Customs and the State Taxation Administration cast doubt on the extent of those benefits. The notice included wine on the list of taxable imports, subject to a 14% Most-Favored-Nation tariff. Spirits, cigarettes, apparel and bags — all popular duty-free categories — were also listed as taxable goods.

“This list is confusing,” said a wine merchant engaged in cross-border sales in China, who spoke to Vino Joy News on condition of anonymity. “Tourism consumption revolves around food, drink and leisure. If these categories are taxed, it’ll be hard to truly attract tourists — and even harder to deliver real value to consumers.”

“Hainan is a tourism island. It makes no sense to exclude the very goods most associated with tourism spending from duty-free treatment,” the merchant added.

The merchant registered a wine business in Hainan several years ago in anticipation of favorable policy conditions but is now putting expansion plans on hold. “Sanya attracts a large number of high-net-worth travelers. During Chinese New Year, hotel rates can run into the thousands of yuan per night, and flight prices surge. If wine could be duty-free across all island channels, it would certainly unlock real consumer demand,” he said.

Hainan’s evolution into a tourism and retail hotspot has been underway for more than a decade. In 2011, the province launched pilot offshore duty-free shopping policies. In 2020, spending limits were expanded and product categories widened to include items like wine — giving many in the industry the impression that wine and similar goods would be included in future duty-free arrangements.

The current tax list, however, has defied those expectations.

Still, the Ministry of Finance left room for flexibility. According to the notice, the ministry — along with customs and tax authorities — may revise the taxable goods list after a comprehensive review, taking into account progress in tax reforms, local development needs, and regulatory conditions. This means wine, spirits and other items currently subject to duties could be added to the duty-free scope in the future.