CHINA. China Tourism Group Duty Free Corp’s (CTG) stock price surged today on the Shanghai (+10%) and Hong Kong (+15.21%) stock exchanges after details of Hainan’s independent customs regime – to be implemented on 18 December – were revealed at a key State Council Information Office press conference in the island province yesterday (23 July).
The new regime will see some 6,600 types of goods (up from the current 1,900) allowed tariff-free into Hainan, covering 74% of all taxable imports – well up on the current 21%. But key to the offshore duty-free sector are the exceptions on that list – basically all key consumer commodities including liquor and cosmetics, staples of the channel.
“Consumer commodities are all excluded [from the tariff-free list]. Not such good news for brand houses overall but very good for [CTG subsidiary] China Duty Free Group,” one leading Hainan-based investment specialist told The Moodie Davitt Report.
Another source added, “Beauty products are not on the zero-tariff list, which means they’re still taxed – so duty-free channels remain a cost-saving option.
“It has no impact on beauty product prices in the short term.”
A leading Asia Pacific regional wines & spirits executive told The Moodie Davitt Report, “It’s really great news… very welcoming.”
The importance of yesterday’s meeting was underlined by the presence of National Development and Reform Commission Vice-Chairman Wang Changlin and China’s Vice-Minister of Finance Liao Min.
Travel retail stakeholders have been eagerly awaiting full details of the new-look regime, anxious to see how the much-touted island-wide introduction of tax-free goods would affect Hainan’s all-important offshore duty-free shopping industry.
The continued importance of the offshore duty-free sector was underlined repeatedly during the meeting and confirmed by the exemption list. The authorities said they will continue to implement and enhance that shopping policy to support Hainan’s progress to becoming an international tourism consumption centre. 🏝️
Also read
Expansion of tariff-free access to China’s Hainan a big boost for trade, Beijing says – South China Morning Post
Hainan Free Trade Port to officially launch island-wide independent customs operation – Xinhua
