China bets on province the size of Belgium to reshape global trade

China has made its southern island province, Hainan, a free trade port. New laws that took effect in December 2025 treat Hainan as a separate customs zone. The island (over 35,000 km², slightly larger than Belgium) uses a “two-line” border system: the first line is open to the world, so many goods can enter with zero tariffs; the second line controls trade with mainland China, where normal rules apply. To encourage production, items that gain at least 30% added value in Hainan can enter the mainland duty-free. Hainan also offers a 15% tax rate for companies, lets some firms apply for wider internet access, and expands visa-free entry to 86 countries for stays of up to 30 days.