China plans world’s biggest duty free shop on Hainan island

Also on Hainan island, not far from where Li Keqiang was speaking, authorities were announcing they would build the world's largest duty free shop in a 60,000sq m (645,835sq ft) complex at Haitang Bay.

The past few years have seen major efforts to boost Hainan as a tourist destination, and duty-free shopping is a key component in those efforts.

The plan was announced by Hainan's deputy governor Tan Li at the Boao forum. The shop will be relocated from the current duty-free shop, which is a mere 10,000sq m (107,639sq ft).

Ireland's Aer Rianta International has been involved in duty-free Shops in China, constructing a facility at Kunming airport in south-west China.

The Sanya Haitang Bay International shopping mall will attract international brands and fashion labels and combine duty-free shopping with hotels, restaurants and entertainment, Tan said.

The island province also plans to expand and transform another duty-free shop in the provincial capital of Haikou from 3,650sq m to 4,880sq m (39,288sq ft to 52,527sq ft).

Heavy duties

China currently imposes heavy duties on luxury goods, which is one of the main reasons Chinese tourists are so drawn to duty-free havens such as Hong Kong. With China expected to become the largest luxury consumer market by 2015, the powers-that-be are keen to make sure

all that disposable income doesn’t go offshore.

Hainan was granted special permission to run a duty-free programme from China's cabinet, the State Council, in 2011, as part of efforts to give the island a lift as an international tourist destination. Travellers who leave the island by air are allowed to buy duty-free imported goods even if they do not leave the Chinese mainland.

The duty-free goods price cap was set at 5,000 yuan (€581) for each trip, and that has since been raised to 8,000 yuan (€930). Tourists receive a partial rebate on amounts exceeding that figure.

Offshore shopping in the two-duty free shops was worth 3.29 billion yuan in 2013 (€380 million), up 40 per cent year-on-year.