State Customs authorities are set to raise the duty free allowance for Chinese and international visitors to Hainan island, informed local sources have confirmed to The Moodie Report China. The allowance is expected to be increased from RMB5,000 (US$795.40) to RMB8,000 (US$ 1,272.70) some time this month.
 
The move, widely reported in Chinese media, is the latest in a series of progressive policy decisions that have forged a remarkable duty free business on the island. In April 2011 the government implemented its offshore duty free policy, allowing domestic visitors to buy duty free on their departure from the island.
 
China Duty Free Group’s Sanya Duty Free downtown store on Hainan achieved sales of RMB1 billion (US$159.1 million) between April 2011 and the end of the year. Crucially, at present duties must be paid on items valued over RMB5,000 – representing around 7% of all sales at Sanya. This is likely to change when the new allowance is introduced.
 
The move is well timed for China Duty Free Group, which is due to open an even bigger downtown duty free outlet in 2014 when the Haitang Bay International Shopping Complex is completed.
 
The increase will also be welcomed by Hainan Provincial Duty Free Co, which opened a new 2,200sq m duty free shop at Haikou Meilan International Airport last year. DFS has an exclusive supply and management contract with Hainan Provincial Duty Free Co.
 
 
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