A worker carries out construction work at a supporting project site in the Wuzhizhou Island tourist area in Sanya, Hainan Province, on 20 January (XINHUA)

Saud Khan, a Pakistani physician, collected his work and residence permits at the Yangpu Government Service Centre in Danzhou City, Hainan Province, on 18 December 2025. Khan had arrived in Hainan three months earlier to participate in a medical training programme at Hainan Western Central Hospital. By the time the programme concluded, he had made up his mind to stay and broaden his professional experience and long-term career prospects in Hainan. The province, home to the world’s largest free trade port (FTP) by area, which covers the entirety of the 33,900-square-km Hainan Island, is offering substantial opportunities. 

Before coming to China, Khan had already obtained his medical licence in Pakistan. Under the Hainan FTP’s foreign physician skills recognition mechanism, he was not required to sit China’s national medical licensing exam. After signing a formal employment contract, his credentials were recognised through a mutual recognition process, allowing him to convert his qualifications and obtain legal authorisation to practise. 

“To further facilitate the entry of foreign professionals, we have established an agency that provides one-stop service encompassing work and residence permit application and company registration consulting for international professionals,” Li Xianqiu, an official with the Talent Division of the Organisation Department of the CPC Danzhou Municipal Committee, said. 

Khan’s experience offers a vivid example of how Hainan is aligning its medical services sector with high-standard international economic and trade rules. The CPC Central Committee’s recommendations for formulating China’s 15th Five-Year Plan (2026-2030), adopted in October 2025, call for promoting high-standard opening up. “We should promote alignment with high-standard international economic and trade rules, expand market access and open up more areas, in particular in the services sector,” it said. 

“The Hainan FTP is a testing ground for institutional innovation with a distinct mission,” Dun Zhigang, a research fellow with the Chongyang Institute for Financial Studies at the Renmin University of China, said. “It plays a critical role in developing cross-border trade in services and in aligning with, and even helping to shape, high-standard international economic and trade rules.” 

A doctor explains traditional Chinese medicine to overseas visitors at the Sanya International Friendship Traditional Chinese Medicine Rehabilitation Hospital in Sanya, Hainan Province (DUAN WEI) 

Expansion of services market 

According to the Hainan Provincial Department of Commerce, the province’s total imports and exports of services reached 56.05 billion yuan ($8 billion) in the first 10 months of 2025, up 23.4 percent year on year, which was more than three times the national average. 

On 18 December 2025, the Hainan FTP formally launched island-wide special customs operations, which enable free trade between Hainan and areas outside China’s customs border, while maintaining standard customs controls for the Chinese mainland. “The move fundamentally reshapes the cost and efficiency logic of the province’s trade in services,” Dun said. 

Following the launch of special customs operations, the Hainan FTP added 38 new categories of products eligible for bonded maintenance, with both suppliers and customers being offshore, making it the only region in China able to offer bonded maintenance services for engines. CRRC International Vehicle Industry (Hainan) Co. Ltd. has already secured its first order from a German client. 

Currently, 74 percent of all products, totalling 6,637, enjoy zero-tariff treatment in the Hainan FTP, covering nearly all production equipment and raw materials. “Thanks to the zero-tariff policy, all imported parts needed for repairs are duty-free, and parts purchased from the mainland can qualify for tax rebates,” Zhang Zirui, the company’s marketing director, said.  

“Special customs operations will fully unleash the combined effects of zero tariffs and low tax rates,” Dun said. “A simplified tax system will also draw multinational corporations to establish functional headquarters in the FTP, including settlement centres and data centres. These entities are themselves both producers and consumers of high-value-added services, and their presence will directly spur growth in professional services such as accounting, legal services and consulting.” 

Multi-functional free trade accounts, known as EF accounts, are a key part of the financial infrastructure supporting special customs operations and facilitating cross-border settlement, Zheng Conghui, director of the Sanya Municipal Bureau of Commerce, said. 

Zijin Mining Group Co. Ltd., a multinational mining company, for example, channels its global investment funds through the EF account of its Hainan subsidiary, markedly improving settlement efficiency, Zheng explained. 

The Hainan FTP also offers the country’s most favourable visa-free entry policy, allowing citizens from 86 countries to enter without a visa. 

Official data show that in the first month of special customs operations, 87,000 visa-exempt foreign visitors arrived in Hainan, a 64 percent year-on-year increase, accounting for 93 percent of all inbound foreign tourists during the period. Daily duty-free shopping on the island averaged around 25,000 transactions, totalling roughly 160 million yuan ($23 million), with a noticeable increase in foreign shoppers. 

At the Sanya International Friendship Traditional Chinese Medicine (TCM) Rehabilitation Hospital, foreign visitors show strong interest in acupuncture, cupping and massage. The hospital was established by Sanya TCM Hospital. In 2025, it served 10,749 foreigners seeking treatment, generating revenue of 5.83 million yuan ($837,707). Yuan Ailin, deputy director of Sanya TCM Hospital, said that with national policy support, the hospital has established a national TCM service export base. “With special customs operations in place, the combined effect of multiple policies will bring even more visitors,” she said.  

Zhou Mi, a research fellow with the Chinese Academy of International Trade and Economic Cooperation, said special customs operations help to improve the overall business environment to attract professional talent and multinational companies. This, he noted, strengthens Hainan’s capacity to build a solid foundation for developing the services sector and prepare for further market expansion. 

Tourists enjoy time at Dadonghai Beach in Sanya, Hainan Province, on 11 January (XINHUA) 

The Hainan model 

Dun noted that alignment with international rules in trade in goods largely takes place at the border. In contrast, harmonising rules for trade in services goes beyond borders, reaching deep into a country’s domestic legal frameworks, industry standards and even cultural norms. This is reflected in practical questions such as whether foreign-invested firms enjoy equal access to licensing, whether they face discriminatory technical barriers, how freely and securely data can move across borders, and how easily can people move and have their professional qualifications recognised. 

Backed by national policy support, Hainan is testing a “Hainan model” for aligning with high-standard international economic and trade rules. 

Boao Lecheng International Medical Tourism Pilot Zone is described as a “medical special zone.” Unlike the conventional process of “registration first, import later,” innovative drugs and medical devices that have already been approved overseas but not yet registered in China can be brought into Lecheng through a special approval regime and applied directly in clinical practice. 

Supported by a pilot programme for clinical real-world data application, the collected data can be used for domestic regulatory approval. To date, this mechanism has accelerated the market entry of 21 imported drugs and devices, with three included in China’s national medical insurance reimbursement scheme. 

The Hainan Bielefeld University of Applied Sciences (BiUH) is the first independent overseas university campus established in the Chinese mainland. Outside the Hainan FTP, China’s higher education sector remains largely limited to China-overseas cooperative programmes under Chinese leadership. 

BiUH is allowed to combine Germany’s independent admissions system with China’s unified enrolment process. Graduates receive degree certification recognised in both countries. While retaining a required share of courses taught in standard Chinese, the university has introduced Germany’s practice-embedded teaching model, forging an approach that integrates the characteristics and regulatory frameworks of both systems. 

In 2025, US-based business information provider Dun & Bradstreet launched its corporate information service application Longyicha in Haikou, capital of Hainan. “In the past, Chinese companies found it difficult to access information on overseas firms, while foreign institutions struggled to obtain reliable data on Chinese companies,” Wu Qingji, general manager of Haikou-based Fuxingcheng Industrial Park, said, adding that Longyicha has a promising market. 

Moreover, Khan’s story as a new physician in Hainan reflects the island’s progress in aligning rules to facilitate the cross-border movement of professional talent, through mechanisms such as mutual recognition of vocational qualifications and streamlined procedures for cross-border practice. 

Taken together, these four cases correspond to the four modes of trade in services - consumption abroad, commercial presence, cross-border supply of services and personnel movement. They offer concrete, on-the-ground illustrations of what has come to be known as the “Hainan model.”