The intensifying trade war with the United States has created a crisis for businesses across China, as sky-high tariffs dampen trade, disrupt supply chains and raise concerns about a wave of job losses.
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But one island province could stand to benefit.
Hainan, a tropical haven off China’s southern coast, has emerged as a major shopping destination over the past few years, with special policies allowing its duty-free stores to maintain unbeatable prices.
Now, local shops are set to gain an even greater advantage over the rest of China, as Hainan is poised to launch its own separate customs regime and can avoid applying the 125 per cent retaliatory tariff Beijing has slapped on all American imports.
In Hainan, the hope is the promise of cheap iPhones and US cosmetics could help drive a surge in visitors to the island’s duty-free stores, which have struggled over the past two years amid sluggish domestic consumption and a recovery in overseas tourism.
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Beijing aims to turn Hainan into the world’s largest free-trade port, creating a centre for offshore finance and duty-free shopping that will lure tourists and businesses with an internationally competitive tax regime and relaxed visa requirements.
