Hainan Free Trade Port to Officially Launch Island-wide Customs Closure, Paving the Way for a Global Dual-Hub in Pharmaceutical and Medical Device Innovation

Tomorrow (December 18), the Hainan Free Trade Port will officially launch island-wide customs closure operations.

“Customs Closure” refers to the establishment of the entire Hainan Island as a special customs supervision zone, implementing a liberalized and facilitated policy system characterized by “open first line, controlled second line, and free movement within the island.” This includes more preferential “zero-tariff” policies for goods, more relaxed trade management measures, more convenient passage arrangements, and a more efficient and precise regulatory model.

Among them,The biopharmaceutical industry is one of the key high-tech industries prioritized for development in the Hainan Free Trade Port., will bring unprecedented development opportunities to global and Chinese pharmaceutical and medical device companies.

At this critical juncture of customs closure,From December 21 to 23, the “Open Highland, Linking the World” 2025 Hainan Free Trade Port Global Pharmaceutical and Medical Device Innovation Introduction and New Pivot for Chinese Companies Going Global Conference will be held in Haikou. The event is jointly hosted by the Hainan Provincial Department of Industry and Information Technology, the Administrative Committee of Haikou National High-tech Industrial Development Zone, and the Haikou International Investment Promotion Bureau, and organized by Haikou National High-tech Zone International Investment Consulting Co., Ltd. and Bio-Island Industrial Services.

It is reported that the conference has invited Academician Zhong Nanshan of the Chinese Academy of Engineering, Academician Deng Xingfei of the European Academy of Medical Sciences, Academician Zeng Qi of the National Academy of Engineering of Ukraine, and several other top domestic authorities in healthcare. Leading pharmaceutical and medical device companies from China and abroad, including Sanofi, Danaher, BeiGene, Jinbo Bio, and BGI Genomics, along with more than 70 core enterprises across the industrial ecosystem—such as the European Academy of Medical Sciences, the Swiss-Chinese Innovation Center, Hillhouse Capital, GeLu Capital, and Sinovation Ventures’ Health Fund—are expected to attend the conference.

How will Hainan build its “dual hubs” for global pharmaceutical and medical device innovation after the implementation of island-wide customs closure? How can a new springboard be established for Chinese pharmaceuticals and medical devices to go global? How will Haikou National High-Tech Industrial Development Zone create a full-chain industrial ecosystem for biopharmaceuticals and medical devices? This conference will provide some answers.

Capital, Talent, and Cost—Targeting the Biopharmaceutical Industry, the Hainan Free Trade Port Has Prioritized Addressing the Tax Burden on Innovative Enterprises and the Shortage of High-Caliber Professionals.

““Zero Tariff” and “30% Value-Added through Processing” Policies Take Effect Simultaneously.“"Zero Tariff" refers toGoods under the “first-line” tariff schedule are exempt from import duties, value-added tax (VAT) on imports, and consumption tax. Goods produced by enterprises in encouraged industries (including the broad category of biopharmaceuticals), containing imported materials and having undergone processing that adds at least 30% in value, are exempt from import duties when entering mainland China through the “second line,” while VAT on imports and consumption tax are levied in accordance with applicable regulations.In particular, biopharmaceutical and medical device companies, which rely on imported high-end equipment and raw materials, will be the first to benefit from tax cost advantages. This will subsequently translate into more competitive product pricing, optimizing key operational metrics such as cost competitiveness and cash flow turnover.

2020–2027, the “Double 15%” PolicyFor encouraged industry enterprises registered in the Hainan Free Trade Port and conducting substantive operations, the reduced rate of15% corporate income tax rate; for high-end and urgently needed talents working in the Hainan Free Trade Port, the portion of their individual income tax burden exceeding 15% is exempt. Compared with the statutory rate of 25% applicable elsewhere in China, this preferential tax rate will channel talent, capital, and resources toward the biopharmaceutical industry, which is characterized by high innovation, high risk, and high value-added.

The Hainan Free Trade Port is further channeling diversified capital into the sources of innovation, injecting vitality into industries, and connecting domestic and global innovation markets.

On one hand, it supports enterprises in “going global,” enabling cross-border trade and investment to generate returns. Hainan has established a fast-track channel for outbound direct investment (ODI),ODI projects under USD 300 million can be approved quickly and conveniently through Haikou’s one-stop ODI service window.Accelerate Chinese enterprises’ expansion into international markets and outward investment.

On the other hand, foreign capital inflows have improved—Establishing the “shortest” nationwide negative list for foreign investment access; encouraging categories based on certain constraintsExemption from Corporate Income Tax on New Overseas Direct Investment Income, thereby effectively reducing operating costs and encouraging expansion into overseas markets as well as participation in international competition and cooperation.

Prior to the implementation of customs closure operations, the Hainan Free Trade Port had already established the “Boao Lecheng R&D and Application + Haikou Manufacturing” model, which signifies a substantial reduction in communication, time, approval, production, and distribution costs for the market access of pharmaceutical and medical device products.This is precisely because the “protagonists” of Hainan’s biopharmaceutical industryNot only global pharmaceutical and medical device giants and multinational corporations, but also Chinese enterprises that are introducing essential drug and medical device products and promoting the overseas expansion of original innovations.

Haikou National High-Tech Industrial Development Zone—The only national high-tech zone in the Hainan Free Trade Port and one of China’s first batch of national-level high-tech zones.Since its establishment in 1991 with the approval of the State Council, Haikou National High-Tech Industrial Development Zone has developed a “One Zone, Seven Parks” layout, covering three leading industries: tourism, modern services, and high-tech industries. Among these, “biopharmaceuticals and medical devices” is a key focus within its “3+X” high-tech industry framework.

Leveraging the policy advantages of the Hainan Free Trade Port and the pharmaceutical industry cluster ecosystem accumulated over many years, Haikou National High-Tech Industrial Development Zone is now home to nearly 800 pharmaceutical companies, including more than 180 manufacturers of drugs and medical devices.In 2024, the park’s pharmaceutical industrial output value and its existing stock of pharmaceutical entities each accounted for 80% of the province’s total.

Ecological Front: Haikou National High-Tech Industrial Development Zone Accelerates Construction“Haikou Medicine Valley” National-Level Industrial Platform, has introduced multiple global healthcare industry leaders such as Viatris (US), Nestlé (Switzerland), Sun Pharmaceutical (India), and IQVIA; meanwhile, it has also landed leading domestic biomedical and biomanufacturing enterprises including China National Nuclear Corporation, Qilu Pharmaceutical, Hulawa Pharmaceutical, Shinva Medical, Better Pharmaceutical, and Shuanghe Pharmaceutical. Among them, Simcere Pharmaceutical, CMS Pharmaceuticals, etc.Pharmaceutical and medical device companies leverage the “Hainan Model” to introduce innovative overseas products, enabling rapid approval for market launch and local manufacturing in Haikou., thereby benefiting Chinese patients at an earlier stage while significantly reducing their medication cost burden.

At the industry level, establish a public service platform system and supporting infrastructure that covers the entire value chain.Support the establishment of a new drug screening and evaluation platform at Hainan University; focus on key areas such as gene and cell therapy, synthetic biology, marine drugs, and Li and Southern traditional medicines to establish a biomedical industry innovation center; accelerate the construction of a non-human primate experimental animal breeding base with a stock of approximately 15,000 cynomolgus monkeys; and plan the development of pilot-scale platforms and biomedical frontier technology innovation centers as bases for achievement transformation and testing.

Application Layer: Identifying and Resolving the Real Pain Points for Pharmaceutical and Medical Device Companies Going Global.For example, launching specialized bonded operations after the implementation of customs closure—located atSonoscape’s Global Repair Center in Haikou National High-Tech Industrial Development Zone has recently been approved as the first bonded medical device maintenance project in the Hainan Free Trade Port. Equipment awaiting repair from around the world can now be directly imported into Hainan for servicing and, upon completion, shipped straight back to overseas customers, significantly enhancing service response speed and substantially reducing maintenance costs.

The strategic imperative for the Hainan Free Trade Port lies in leveraging island-wide customs closure operations to transform its institutional opening-up advantages into systemic competitiveness for the global expansion of the pharmaceutical and medical device industry, by building a full-chain support system across dimensions such as policy design, coordinated regulatory review, and integrated services.In particular, this conference closely aligns with the spirit of the Overall Plan for the Construction of Hainan Free Trade Port and precisely addresses the core demand of “innovating the pharmaceutical and health industries” as outlined in the Opinions on Supporting the Construction of Hainan Free Trade Port by Relaxing Market Access Through Several Special Measures, jointly exploring a linkage channel that boasts unique nationwide status and global potential.

First, the conference will unveil a series of major new policies for the biopharmaceutical industry, comprising a comprehensive policy matrix that spans from provincial strategy to industrial park implementation, from industry support to empowerment for global expansion, and from policy frameworks to practical guidelines. This initiative forms the “most powerful combination” of policies supporting the high-quality development of the pharmaceutical and medical device industries in the Hainan Free Trade Port.

The conference will also be held.Hainan Free Trade Port Pharmaceutical and Medical Device Industry Overseas Expansion Service ConsortiumInauguration Ceremony and ““Building an Innovation Channel for Global Expansion, Setting Sail for Worldwide Innovation”Cooperation Ceremony. It is reported that this consortium adopts a tripartite architecture of “channel + alliance + special task force,” leveraging the advantages of Hainan Free Trade Port’s customs closure operations to aggregate core global medical innovation market resources. It encompasses key stages for international expansion, including clinical validation, registration and market access, duty-free manufacturing, international certification, cross-border compliance, and intellectual property management, potentially reshaping the strategic logic by which China’s pharmaceutical and medical device industry participates in international competition.

Hainan Free Trade Port Global Innovation Linkage Channel for Pharmaceuticals and Medical DevicesLeveraging Hainan’s unique customs supervision model of “liberalized first-line control and regulated second-line control,” a two-way platform for the flow of innovative pharmaceutical and medical device resources between domestic and international markets has been effectively established. Domestic companies can advance their overseas registration strategies, while multinational corporations can build a strategic hub following the “overseas R&D – Hainan translation/commercialization – mainland China market” model.

Hainan Free Trade Port Pharmaceutical and Medical Device Overseas Expansion Service Ecosystem AlliancethenBy aggregating global professional service providers—including CROs, CMOs, regulatory consultants, intellectual property firms, and cross-border financial institutions—a one-stop, full-chain service matrix has been established. Leveraging the Free Trade Port’s unique “dual-hub” status, alliance members can provide overseas compliance services for domestic companies while also meeting the reverse demand of foreign enterprises entering the Chinese market. This will position Hainan as a “super node” in the pharmaceutical and medical device industry, breaking down barriers and linking markets.

Special Task Force for Overseas Expansion of Pharmaceuticals and Medical DevicesA dynamically optimized policy feedback loop will be established, enabling Hainan to take the lead in breaking new ground in the deep-water zones of biomedical innovation and globalization, such as cross-border data flows and the internationalization of regulatory standards. For innovative pharmaceutical and medical device companies, this means“The Core Strategic Value of ‘Accessing Global Resource Allocation Without Leaving the Country’.”

Furthermore, centered on the theme of “Innovation Export Channels and China Market Expansion Channels,” the conference has precisely establishedFour Major Specialized Forums on Global Expansion, respectively: “Viewing the World from Hainan, Connecting Globally,” an in-depth analysis of foreign pharmaceutical companies’ strategies in Hainan; “Empowered by New Policies, Breaking Waves to Go Global,” an examination of the global expansion strategies of listed pharmaceutical companies; “Intelligent Manufacturing of Medical Devices, Empowering Healthcare,” an interpretation of how Free Trade Port policies facilitate the high-end development of the medical device industry; and “Synthetic Biology, Beautifying the Future,” a discussion on emerging industrial tracks such as synthetic biology empowered by the Free Trade Port.

Innovation and collaboration intertwine; openness and inclusiveness coexist with competition; institutional dividends resonate with capital efficiency; global factors integrate with local advantages—much like the ebb and flow of tides around an island. Amidst the surging waves, what remains unchanged is the courage and determination to sail forward toward broader horizons. See you in Haikou on December 21! (Scan the QR code to register and reserve your spot for the online live stream.)