Commentary: China’s gold rush comes to Xi's tariff-free paradise

Sales have soared in duty-free shopping hub Hainan, but the Chinese middle class isn’t actually consuming, says Shuli Ren for Bloomberg Opinion. Advertisement Commentary Commentary: China’s gold rush comes to Xi's tariff-free paradise Sales have soared in duty-free shopping hub Hainan, but the Chinese middle class isn’t actually consuming, says Shuli Ren for Bloomberg Opinion. People at the Sanya International Duty-Free Shopping Complex in Sanya, Hainan province, China, Nov 25, 2020. (Reuters/Tingshu Wang/File Photo) Shuli Ren Shuli Ren 26 Feb 2026 05:58AM Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn Set CNA as your preferred source on Google Add CNA as a trusted source to help Google better understand and surface our content in search results. Read a summary of this article on FAST. Get bite-sized news via a newcards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST HONG KONG: Three months after China declared Hainan the world’s largest “free-trade port”, the tropical island off the country’s southeastern coast has become a shopping paradise for those who believe in the beauty of gold. Best known for palm trees and beachfront resorts, the island has been marketed as a major gateway for what President Xi Jinping called the era of “opening up”. Beijing wants to show the world that China isn’t only a major exporter – the trade surplus notched a record US$1.2 trillion last year – but is keen to welcome foreign imports. The free-trade label serves as a snub to the Trump 2.0 tariff policies to choke globalisation as we know it. Hainan has been a duty-free shopping hub for years, but Beijing is taking a step further. Most goods can now enter with zero tariffs. The island’s 10 million residents are granted duty-free shopping of 10,000 yuan (US$1,450) per year. Visitors from mainland China (and the smaller number of foreigners), while still subject to a 100,000-yuan annual quota, have more items to choose from. In addition, goods processed in Hainan can be shipped to the mainland tariff-free, as long as the processing work results in a 30 per cent value-add. Xi already has something to show for this move. Hainan launched its special customs operations for the free trade port on Dec 18, 2025. (Photo: Sanya Tourism Board) Duty-free sales jumped 44.8 per cent from a year ago to 4.5 billion yuan in January. The fervour continued into this month’s Chinese New Year break, increasing 19 per cent to 1.4 billion yuan in the first five days of the holiday. The state-owned China Tourism Group Duty Free, by far the biggest operator with 85 per cent market share, can finally expect to reverse a two-year downward revenue trend. But digging deeper, one has to ask if these statistics alone can change the narrative that the rest of the world has nothing to sell to China, and that its consumers have little appetite to buy foreign imports, especially luxury products. Unfortunately, this isn’t about rediscovering a taste for Hermes scarves and Chanel handbags. Rather, gold jewellery is by far the most sought-after item, constituting the bulk of shoppers’ annual quota. Related: Commentary: China’s US$1.2 trillion trade surplus is a sign of risk, not strength Commentary: Silver and gold hit record highs – then crashed. Here's what you need to know BUYING GOLD CHEAPLYChina’s middle class is indeed responding to Hainan’s zero-tariff policies, but not by consuming. They’re speculating and arbitraging instead, hoping that the gold price, which has reached a high of US$5,417 per ounce this year, will keep on rising. Duty-free in this sense is more a commodities floor than a shopping mall. Social media is flush with tips on how to buy gold cheaply. For instance, on Dec 18, 2025, the day of the tariff-free launch, gold cost 1,177 yuan per gram at Chow Tai Fook Jewellery Group’s stores in Hainan, 13 per cent cheaper than the price in Guangzhou. Buy enough and it’s easy savings, even considering the 1,500 yuan cost of a round-trip air ticket. The island government has also been offering subsidies, giving out as much as 4,000-yuan consumption vouchers for every 50,000 yuan spent. A 40g plain bracelet, which retailers charge minimum with processing fees, can be 20 per cent cheaper. But one needs to be fast and vigilant; the coupons run out as soon as they become available online. To be a smart shopper in Hainan, some bloggers joke, one must be good at math and quick with online coupon-clipping.