A: The offshore duty-free policy is not a common international practice. It is a policy that only a very small number of countries and regions have implemented, among which Japan's Okinawa and Korea's Cheju enjoy a long history of operation.

Similar to Hainan Island, the two areas are surrounded by the sea, geographically independent, relatively fragile in the environment. The offshore duty-free policies of Japan and South Korea apply to the objects including all of the domestic and international passengers (including residents of the island) who leave the island but not the national territory. This is armed to encourage the domestic citizens to visit the island, basically the same in the operational processes but different in variety of the duty-free goods, category of the free duties, restriction on the duty-free shopping, and the entity of the duty-free store operators.

Judging from the experience of its implementation in Japan and South Korea, the offshore duty-free policy should play an active role in promoting the development of local tourism, and both national governments make the policy a special preferential policy in specific areas, without spreading it further in other regions.

While making the pilot implementation plan of the offshore duty-free policy in Hainan, we have successfully introduced the policy in Japan’s Okinawa and South Korea’s Cheju, making appropriate adjustments in correlation with the actual situation of China.

It is noted that the duty-free policy to be implemented in Hainan Province is not universal. It is only part of an overall development strategy approved by the State Council for construction of the internationalized tourism island in Hainan, a special preferential policy stipulated with the premise of Hainan's special geographical conditions, industrial structure, and development concept.

----by officials from the Customs Division of Ministry of Finance