Hainan opens second duty-free shop

HAIKOU - A second duty-free shop will open in south China's island province of Hainan on Wednesday, marking the full implementation of the region's trial program for duty exemptions, local authorities said Monday.

The new shop will open to visitors at the Meilan International Airport in the provincial capital of Haikou, said Tan Li, vice governor of Hainan, at a press conference.

The shop, with more than 100 staff members, is operated by the newly-founded state-owned Hainan Provincial Duty Free Co Ltd, Tan said.

The government launched a pilot program in April to allow tourists and locals in Hainan to enjoy duty exemptions and tax refunds on certain imported products worth less than 5,000 yuan (about $794) before flying to other airports in China.

The move is part of efforts to lure more mainlanders to the tropical island and build it into a world-class tourist destination by 2020.

After deducting customs duties, value-added taxes and consumer taxes, products sold at duty-free stores in Hainan end up costing about 10 to 35 percent less than those sold in other stores.

The trial program's duty-free shop has been operating in the city of Sanya since April. It is being run by the China Duty Free Group, the only firm qualified to manage duty-free shops in the province until the establishment of Hainan Provincial Duty Free.

"The two shops will bring greater convenience to tourists and boost the province's tourism-related industries," Tan said.

Industry analysts believe the two duty-free operators will help encourage competition, prevent a monopoly and facilitate the healthy development of the duty-free market in Hainan.

From April 20 to the end of November, 1.2 million duty-free goods were sold at the Sanya shop at a total value of 780 million yuan, according to local customs statistics.