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Other CategoriesWith the $14000 tax-free allowance coming into effect, China (Hainan) will usher in a shopping boom. From July 1, Chinese tourists will be able to benefit from the new tax-free shopping quota of 100000 yuan (RMB per person per year). The move is part of the central government's master plan to build a free trade port on the resort island of Hainan - but it will also affect duty-free airports around the world, as more sales will be concentrated in China.
In the long run, China is building Hainan into a tax-free shopping paradise and an "inward" investment zone for large enterprises that will eventually be comparable to Hong Kong. The area of Hainan is 13 times as large as that of Hong Kong, but its population is not much larger. The two places are 9.3 million and 7.5 million respectively. In addition, the per capita GDP of the two places is 7173 US dollars and 49334 US dollars respectively. Therefore, the development potential of Hainan is obvious.
In addition to increasing the amount of duty-free shopping, China has also increased the number of duty-free goods on Hainan Island from 38 to 45, and cancelled the tax-free quota for individual goods (8000 yuan), thus opening the door to more valuable luxury brands.
China immune group, the largest duty-free retailer in China, has shown a strong recovery since the outbreak peaked in February, according to a report. Retail sales in Sanya fell 79% in February from a year earlier, but rose as much as 99% in May. According to forwardkeys, a travel analysis company, Hainan will be the second largest duty-free market in mainland China in 2019, with sales of $1.7 billion, second only to the two major airports in Shanghai. However, with the increase of tax-free shopping on outlying islands this year, Hainan may easily take the lead. According to the company, bookings to Sanya in June and July have returned to 90% of last year's level, ahead of popular destinations such as Chongqing, Zhengzhou, Chengdu and Changsha. (by Kevin Rosario, translated by Wang Huicong)
