Chinese Importers Taking Cautious Approach to Hainan FTZ, USDA Says
Although China’s recently announced plan for its Hainan free trade port could turn the island into a global trading hub, Chinese importers of U.S. agricultural goods have not yet embraced the strategy, the U.S. Department of Agriculture Foreign Agricultural Service said. China’s plan, released in June (see 2006030007), includes measures to reach zero and reduced tariffs for a range of imports by 2025, FAS said in a report released Nov. 20. But Chinese importers “appear reluctant to move forward until the food processing industry matures, infrastructure is built, cold chain capacity increases, and logistical connections are in place,” FAS said. Other importers want to wait to see how the plan’s tariff policies are implemented in practice “before pursuing potential business opportunities,” the report said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Some companies are also concerned about the island’s logistics and fear that the tariff-free advantages would be “quickly wiped out by high transportation costs for incoming and outgoing shipments,” USDA said. They are hoping more shipping options become available.
But USDA said some companies have started to invest on the island, including the Jiangnan Fruit & Vegetable Wholesale Market Company, China’s largest produce wholesaler. The company opened a branch on the island that could become “a potential consolidation and shipping point for Hainan and Southeast Asian produce where it will be forwarded to mainland China and other Asian destinations.”