CRNTT:
Talent is the crucial foundation for constructing the Hainan FTP. Since June 1, 2020, when the CPC Central Committee and the State Council published the Master Plan for the Construction of the Hainan Free Trade Port, relevant departments have introduced a range of policies to attract talent to Hainan. How has the implementation progressed? And what measures will be taken to enrich the talent team in Hainan?
Shen Xiaoming:
As General Secretary Xi Jinping proposed at the celebration of the 30th anniversary of the founding of Hainan province and the Hainan Special Economic Zone on April 13, 2018, deepening overall reform and opening-up in Hainan is a major national strategy, which requires rallying support from the entire country as well as global talented people. We must realize that in deepening Hainan's reform and opening-up, and constructing the FTP, talent remains the top priority resource. Since April 13, 2018, the central government and relevant departments have fully supported Hainan in pooling talent. Hainan has rolled out a series of policies concerning talent, and has preliminarily founded a talent-related policy system that is scientific and effective. I mentioned earlier that during the last three years since April 13, 2018, Hainan has introduced 233,000 professionals. The number increased 675% over 2018. What delighted us more is that over half of these 233,000 professionals were introduced in less than a year since the master plan was released. That is to say, the speed of introducing talent has increased.
Next, as you mentioned, we will further enlarge the talent team in Hainan. However, as I always tell my colleagues in Hainan, it is important to both introduce talent as well as foster talent. We need both talent introduced from outside and local talent. The master plan runs until 2050, and I often feel that we are lucky to be the first generation in its construction. Where is the last generation or those who will make the final sprint in the campaign? Perhaps they are still in kindergarten. As such, developing education in Hainan is of strategic significance in expanding the talent team there. Thank you.
CNR:
We have noticed that the Master Plan for the Construction of the Hainan Free Trade Port mentions gradually opening up and achieving initial results before 2025. The Ministry of Finance has released a series of supporting policies. What role have these supporting policies played? Thank you.
Zou Jiayi:
Thank you for your question. The master plan has proposed an arrangement for fiscal and tax policies. That is, to implement a simplified tax system with zero tariffs and low tax rates by phrases. Before launching island-wide special customs clearance operations, we will focus on zero tariffs and low tax rates. Specifically, we will exempt tariffs for some imported goods, and implement low income tax rates for enterprises and individuals that meet relevant requirements. Meanwhile, we will implement value-added tax policy for relevant shipping vessels. In total, 12 taxation policies are involved.
In the past year, nine of the 12 policies were introduced as they matured. The first was the offshore duty-free shopping policy. The second was the zero-tariff policy for raw and auxiliary materials. The third was the zero-tariff policy for vehicles and yachts. The fourth was the zero-tariff policy for production equipment imported by enterprises for self-use. The fifth was the preferential policy for corporate income tax. The sixth was the preferential policy of individual income tax for high-end and urgently-needed professionals. The seventh was the value-added tax policy for international shipping vessels. The eighth was the tax refund policy for ports of departure. The ninth was the policy for domestic ships with both domestic and foreign trade goods on board, allowing them to refuel with bonded fuel oil required for the voyage, or claim tax refund if they refuel with locally produced fuel oil for the voyage. These nine policies have contributed to the early results in constructing the Hainan FTP.
The policies will play roles in four aspects. First, they will support the construction of an international tourism consumption center. Offshore duty-free shopping policies have been improved. The duty-free shopping quota has been raised to 100,000 yuan per person per year. The categories of duty-free goods have been expanded to 45. The duty-free limit for a single product and the single-purchase quantity limit on most goods have been cancelled. That means, within the 100,000-yuan quota per year, people can buy a watch, or multiple lower-priced items.
Under most circumstances, there is no limit on the quantity of items that can be bought in a single purchase, except for a small number of goods such as cosmetics, cell phones and alcohol. Meanwhile, to make it more convenient for tourists to purchase goods, besides picking up purchases in the restricted areas of airports, train stations and ports, there are two more collection methods, namely, express delivery and pickup after returning to the island.
Pickup after returning to the island is designed for Hainan residents who depart for business or travel, allowing them to collect their duty-free purchases after returning to the island. Express delivery is for the convenience of tourists, so that they don't have to carry the goods themselves, but can instead leave an address and have the shop mail the goods to their home. In addition, six offshore duty-free stores have been added — three in Haikou and three in Sanya. With the four previous stores, there are now a total of 10 offshore duty-free stores in Hainan.
Second, optimization and upgrade of the industrial structure will be supported. We have issued a zero-tariff policy for raw materials, transportation and yachts, and self-used production equipment, as well as preferential income tax policy for enterprises. The zero-tariff policy for raw and auxiliary materials is applied to positive list management, which means raw and auxiliary materials in the positive list that are imported into and used for production within the island, or consumed in the processing trade and service trade of which final products would be exported to overseas are exempted from custom duties, import value-added tax and consumption tax. The zero-tariff policy for transportation and yachts is also applied to the positive list management, which means vessels, aircrafts, vehicles, yachts and other transportation in the import manifest used for transport and tourism in the island are exempted from custom duties, import value-added tax and consumption tax. The zero-tariff policy for self-used production equipment is applied to negative list management, which means equipment excluded from the negative list, or not belonging to commodities that laws, regulations and relevant provisions have clarified are not exempted from tax and not allowed to import, are exempted from custom duties, import value-added tax and consumption tax. The preferential income tax policy for enterprises refers to reducing the enterprise income tax of encouraged industries registered and substantively operated in Hainan FTP by 15%. Income from newly increased overseas direct investment of enterprises related to tourism, the modern service industry and high and new technology in Hainan FTP will be exempted from income tax. Qualified capital expenditure of enterprises may apply for a one-time pretax deduction or accelerated depreciation and amortization in the current period when the expenditure occurs.
Third, we will support the introduction of high-caliber, high-tech, and urgently-needed talents. Just now, a Hong Kong journalist asked a question about the talent introduction policy in Hainan, which also involves fiscal policy support. We have issued a preferential policy for individual income tax. For high-end and urgently-needed talents working in Hainan FTP, the portion exceeding 15% of the actual tax burden of their individual income tax will be exempted.
Forth, the construction of an international shipping hub for the new land-sea transit routes in the western region will be supported. We have issued three policies in this area. First, added-value tax will be rebated when domestic ship building enterprises sell qualified ships to transportation enterprises. Second, domestic ships using Yangpu Port as their transit port and engaging in domestic and foreign trade by the same ship are allowed to refuel with bonded oil required for the voyage at Yangpu Port. Export tax will be rebated when ships refuel locally-produced oil required for the voyage at Yangpu Port. Third, port of departure tax will be rebated for container goods that have been declared and exported by export enterprises at customs at the port of departure; taken direct routes to or stopped at designated ports during waterway custom transfer; and that are departing China from Yangpu Port in Hainan. Thank you.
