On the sun-drenched sands of Sanya's Dadonghai Beach, the rhythm of the South China Sea waves mingles with animated conversations in Russian. A couple from Saint Petersburg, wrapped in towels, basks in the 27 C winter warmth."It's minus 10 back home," the husband says with a smile. "Everything here is wonderful."
Meanwhile, more than 200 kilometers north in Haikou, capital of Hainan province, a different line forms — a winding one outside an Apple store at a duty-free shopping complex. Inside, staff members are busy explaining to customers: "The iPhone 17 Pro Max 2TB has a duty-free price of 16,859 yuan ($2,406). With the 1,000 yuan government consumption voucher, it's 15,859 yuan — 2,140 yuan cheaper than the official website."
These are the contrasting yet interconnected scenes across Hainan, after it officially launched landmark island-wide special customs operations on Dec 18.
Duty-free shopping policies, the "Shopping in China" initiative and freer trade management measures are transforming China's southernmost island province into a new global consumption landmark and a strategic hot spot for multinational corporations, creating what analysts call a "Hainan model" in free trade zones.
At the heart of this transformation lies a policy breakthrough.
According to China's Ministry of Finance, the special customs operations have expanded Hainan's zero-tariff product coverage from 21 percent to 74 percent, with tariff-free items jumping from about 1,900 tariff lines to approximately 6,600.
"These measures, combined with streamlined customs clearance procedures, solidify Hainan's competitive edge as a low-cost, high-efficiency trade hub," said Gao Ruifeng, head of Haikou customs. "It becomes a key gateway for global goods entering the Chinese market."
The policy impact has translated into remarkable statistics from day one. According to Haikou customs, on Dec 18, Hainan's offshore duty-free sales skyrocketed to 161 million yuan, involving 24,800 shoppers and 118,000 purchased items. These figures represented staggering year-on-year increases of 61 percent, 53 percent and 25.5 percent, respectively.
The epicenter of this commercial explosion was the China Duty Free Group's Sanya International Duty Free Shopping Complex. Anchored in a deep integration of "duty-free shopping plus culture and tourism", the mall launched a grand promotional campaign for the occasion, including giving away shopping vouchers. It also specially curated an exclusive VIP salon for international visitors, a strategic move designed to transform abstract policy dividends into tangible, experiential benefits and to craft a diversified, immersive new shopping scenario for foreign tourists.
The result was a comprehensive eruption of market vitality. Data revealed that on Dec 18, customer traffic at the complex exceeded 36,000, a surge of over 60 percent year-on-year, while sales revenue soared by an impressive 85 percent. These standout figures served as a potent testament to the vigorous kinetic energy unleashed by Hainan FTP's institutional innovations.
Vika Karenina, a tourist from Russia, who entered visa-free, said:"This trip to Sanya has been wonderful for the sun and beach, and coinciding with the launch of special customs operations, the duty-free shopping was the most surprising part."
Assisted by a professional shopping guide to select perfumes and cosmetics, she said, "The payment options were diverse, no tax refund paperwork was needed, and the shopping process was as smooth as immigration clearance."
A spokesperson from the sales department of the duty-free city said, "To welcome this historic moment of island-wide special customs operations, we began planning and preparing three months in advance, increasing our inventory to create a high-quality shopping experience for domestic and international travelers."
According to statistics from the Sanya Municipal Bureau of Commerce, since the beginning of the year, cumulative duty-free sales in Sanya had surpassed 20 billion yuan by Dec 19.
The market opportunities brought on by the policy have also attracted more international brands to accelerate their expansion in Hainan.
On Dec 17, the international high-end cosmetics brand SUQQU entered the Sanya duty-free market, opening its first store in China's duty-free channel in the city, further enriching the matrix of high-end consumer brands there.
Travel platforms also recorded staggering booking increases. For the upcoming New Year holiday — the first short break after the special customs operations — flights to Sanya saw a 51 percent year-on-year surge in bookings, with Haikou experiencing a 19 percent increase, according to online travel platform Qunar.
International arrivals tell an even more compelling story. Data from Qunar show that international flight bookings to Haikou during the New Year period have increased over 40 percent. And for the 2026 Spring Festival period, international flight bookings to Haikou have more than doubled year-on-year, with Russian, Singaporean, Australian, Malaysian, South Korean and Thai travelers leading the surge.
Dev Bagchi, an Indian businessman, said: "We came for business purposes, but later discovered Hainan is also a tourism destination. It's fantastic. It's a very good place. I will tell everybody in India to visit here, very nice people, very nice place. Weather is very good, just like Mumbai.
"You know, people from India, they prefer to go to Europe for their holidays and I would like to tell them to come to China and especially come to this place, Hainan."
Hainan's tourism is also expected to enter a new stage of golden development.
Industry participants said the expected surge in cooperation is underpinned by Hainan's entry policies, which include visa-free access for travelers from 86 countries, as well as expanded visa-waiver arrangements for cruise passengers and tour groups. Combined with the new customs operations, these measures are positioning the island as a platform for joint tourism ventures.
"Everybody has to come to Hainan to visit this perfect island," said Sandra Staber from Austria's Tourism Office of Carinthia, pointing to the island's rain forests and coastal attractions. Staber said easier entry procedures and duty-free shopping policies will strengthen Hainan's appeal when developing premium island-based travel products.
Thapanee Kiatphaibool, governor of the Tourism Authority of Thailand, said that "two-way tourism" would be central to future growth, suggesting that Hainan's development could support more balanced tourist flows and shared destination marketing.
"Hainan's customs operations make it easier for us to engage directly with the Chinese market," said Jan Vislocky of Slovakia's Vislocky Travel.
The expansion of the offshore duty-free shopping policy on Nov 1 further broadened the consumer appeal, extending the duty-free list to 47 product categories ranging from mini drones and portable musical instruments to handbags and premium tea.
The efforts are yielding remarkable results. In the first month under the new policy, the average daily sales from departing international travelers at the Sanya International Duty Free Shopping Complex had skyrocketed to 19-fold the pre-policy level, solidifying the outbound tourism segment as a vast, potential-filled blue ocean market.
Beyond transient tourist spending, global corporations are making substantial long-term commitments, seeing Hainan not merely as a retail outlet, but as a strategic beachhead in the Asian market.
US luxury group Tapestry Inc plans to add over 60 new stores in China over the next three years, with Hainan being a critical component. Sandeep Seth, chief growth officer and president of Tapestry International, said that many of these opportunities stem from China's expanded island-departure duty-free policy in Hainan FTP, as well as the "Shopping in China" initiative — part of the country's broader push to deepen market liberalization and spur inbound consumption — alongside young consumers' rising appetite for self-expression.
Tapestry said its Coach flagship store in Sanya has already seen stronger tourist traffic and broader purchasing demand under the upgraded policy.
"With China's strong consumption fundamentals and policy support, we are fully committed to long-term investment in Hainan FTP," said Seth.
Tesla, which established its presence in Hainan in 2020, reported nearly 30 percent year-on-year growth in vehicle deliveries in the province during the first half of 2025. "We firmly believe in the enormous potential of China's consumer market," a Tesla China representative said in a statement to China Daily. "As Hainan Free Trade Port develops and China opens further, this market will release even greater vitality."
"China is not only one of the world's largest automotive markets, but also a global leader in the new-energy transition. Consumer acceptance of intelligent and green mobility is growing, while the demand for high-quality products and services continues to rise," the Tesla China representative said.
The logistics sector is equally optimistic. "We are confident that the island-wide special customs operations at Hainan FTP will lead to a higher benchmark of streamlined imports and exports, free and efficient flows of people, goods and capital, and deepened regional and global economic integration," said Poh-Yian Koh, president of FedEx China. "These factors will further support our growth." FedEx operates over 300 weekly international flights to and from China and plans to leverage Hainan's new status to build smarter supply chains.
The business confidence is materializing in concrete developments. In the core area of Sanya's Haitang Bay National Coastal Recreation Park, Taikoo Li Sanya — a 213,700-square-meter resort-style premium retail complex — is taking shape as the third phase of the Sanya International Duty Free Shopping Complex. It is developed by UK company Swire Group in collaboration with China Tourism Group Duty Free. Scheduled for phased completion from 2026, it represents a bet on Hainan's long-term luxury retail ascendancy.
The tourism and hospitality industry is following suit. "We will further strengthen our sun-and-beach offerings with new projects in Sanya," said Stephane Maquaire, president and CEO of Club Med, a Paris-based travel and lifestyle brand and a subsidiary of China's Fosun International Ltd. He cited supportive policies and rising demand as key drivers for expanding and innovating resort offerings in China.
Analysts observe that Hainan's transformation transcends provincial development, representing a microcosm of China's broader strategy to deepen market liberalization and stimulate inbound consumption through initiatives like "Shopping in China".
Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said, "Hainan is evolving from a tourism island to a comprehensive consumption hub. For multinationals, it now serves as both a lucrative retail market and a testing ground for products and retail formats before a broader mainland rollout."
Despite the evident boom, challenges persist. Infrastructure must keep pace with surging visitor numbers, service industries require upskilling to meet international standards, and the ecosystem for high-value industries like biomedicine and technology — bolstered by initiatives like the newly launched Hainan International Technology Market — needs time to mature fully, experts added.
Yet, the prevailing sentiment is overwhelmingly optimistic. As dusk falls on Sanya, the duty-free complexes remain brightly lit. Foreign tourists browse handbags while comparing prices on the latest drones.
From the wait lines for electronics to the rush for tropical fruit from the multilingual chatter on beaches to the boardroom decisions in global headquarters, Hainan is showcasing, with unprecedented dynamism, a new chapter in China's high-standard opening-up.
As more policy dividends are released and infrastructure matures, this tropical island is accelerating its metamorphosis into a golden hub connecting the vast Chinese market with global opportunities — a place where the world comes to shop, play and build the future, experts added.