Hainan, located at the southernmost point of China and often referred to as the 'Hawaii of the East', is undergoing a significant transformation from a holiday destination into a dynamic hub for free trade and future industries. The construction of the high-standard Hainan Free Trade Port is part of a broader strategy heralded by President Xi Jinping to experiment with comprehensive reform and opening-up policies. With its warm tropical climate, Hainan is not just attracting tourists but is being positioned as a crucial base for high-value industries, aided by policies that establish the region as a special customs zone, ensuring various benefits and conveniences for businesses.

The Yangpu Port is central to this transformation, aiming to compete with the Hong Kong port. As part of its ambition to reposition itself beyond simple cargo handling, Yangpu Port plans to develop as a transshipment hub focusing on re-export trade. Currently, around 75% of the cargo is transshipment volume, with an extensive network of routes established, including 33 international lines and 18 domestic lines. By completing the first phase of the construction by October 2023, the port’s capacity is expected to increase significantly from 3.12 million TEU (Twenty-foot Equivalent Unit) to 5 million TEU, with long-term plans to expand to 10 million TEU by 2031.

This ambitious development is tightly interwoven with Hainan's 'closed customs' policy since its activation in December 2022, which allows the entire island to function as a singular customs supervision area. This setup exemplifies a unique 'inside-outside' customs system, where despite being part of China's mainland, it operates with a distinctive regulatory framework. This strategic initiative not only reshapes Hainan’s economic landscape but also signifies China's ongoing push for comprehensive economic reforms and integration within the global market, reflecting significant implications for trade and industry in the region.