Free trade port opening-up to boost services biz

The services business, including bonded aircraft and vehicle engine maintenance, is expected to see fresh growth momentum as China's Hainan Free Trade Port enters a new phase of opening-up with the launch of island-wide special customs operations.

Business service providers said the new policies are likely to attract more international passenger and cargo flights, boosting demand for high-quality aircraft maintenance services.

The State Council, China's Cabinet, approved the establishment of the Haikou Airport Comprehensive Bonded Zone in 2021 to develop businesses such as bonded aircraft maintenance, bonded aircraft engine maintenance, bonded aircraft leasing, and logistics services for bonded aviation materials.

These initiatives have laid an institutional foundation for industrial clustering at the zone within Hainan FTP, particularly following the launch of island-wide special Customs operations on Thursday, said Long Wentao, head of the management unit at Haikou Airport Aircraft Engineering Co.

"Going forward, more targeted policies are expected to be introduced to support the growth of the aircraft maintenance sector and further create jobs and other business opportunities," he said.

The Haikou Airport Comprehensive Bonded Zone has to date undertaken aircraft maintenance services for more than 20 foreign airlines from countries including Vietnam, Thailand, South Korea, Jordan and Qatar.

Official data further underscore the momentum.

Haikou Customs oversaw bonded maintenance operations for 79 aircraft, 13 aircraft engines and 13 batches of aviation materials at the zone in the first 11 months of 2025, with a total value of 51.57 billion yuan ($7.32 billion), up 68.6 percent year-on-year.

Huang Tingting, head of Haikou Meilan International Airport customs, said overseas airlines that send aircraft to Hainan FTP's one-stop aircraft maintenance base will benefit from a package of supportive policies, including exemptions from security deposits, access to bonded aviation fuel and bonded maintenance materials, without tying up large amounts of corporate capital.

These measures can help airlines cut maintenance costs for inbound aircraft by 10 to 15 percent, giving Hainan FTP a stronger price advantage in the international market, she said.

Yang Wenbo, deputy director of the airport maintenance base in Haikou, owned by Grand China Aviation Maintenance Co, a subsidiary of HNA Technic, said his company will continue to develop new businesses from regions including Southeast Asia, South Asia, Northeast Asia, Central Asia and the Middle East, while accelerating the build-out of aircraft passenger-to-freighter conversion capabilities.

The base will also advance scheduled inspection and aircraft painting capabilities for domestically produced aircraft, expand aircraft composite material repair, wide-body aircraft auxiliary power unit maintenance, and aircraft fuel and lubrication system component repair projects, as well as establish end-to-end engine component deep-repair capabilities, said Yang.

As the number of duty-free items in Hainan FTP will increase from about 1,900 to around 6,600 from Dec 18, chemical products, machinery and computer equipment, textiles and electronic equipment will account for a relatively large share, with most classified as intermediate goods, said Pan Cheng, director of the General Administration of Customs' department of free trade zone and special control area.

Pan said these products can circulate among eligible entities while enjoying tariff exemptions without the need for back payment of import duties, a policy that is expected to encourage services and manufacturing firms to extend their industrial chains and enhance competitiveness.

Beyond aviation services, the policy changes are also opening up space for bonded maintenance in other businesses.

Genertec Vehicles Hainan, a subsidiary of State-owned China General Technology (Group) Holding Co Ltd, has been engaged in bonded maintenance and bonded remanufacturing of automotive transmission products in Hainan FTP.

With the launch of island-wide special customs operations, trade controls have been further relaxed, allowing products covered by 38 tariff codes, including automotive engines, to undergo bonded maintenance within Hainan FTP, said Zhang Zirui, the company's marketing director.

In response, Genertec Vehicles Hainan has built a new facility specifically for car engine maintenance in Chengmai county, Hainan FTP.

"We believe that once the car engine business is successfully launched, it will at least double our current business scale," Zhang said.