(Yicai) Feb. 6 -- Hainan province will open the first batch of daily necessities duty-free shops before the start of the Chinese New Year holiday, allowing locals, including long-term foreign residents, to benefit from the central government's new policy granting duty-free quotas on imported goods.

Three daily necessities duty-free stores will open in the provincial capital Haikou, one in Sanya, and one in Danzhou on Feb. 11, Lu Wei, deputy director of Hainan's commerce department, said at a press conference today.

Hainan residents are referred to as Chinese citizens holding local provincial identity cards, residence permits, or social security cards, as well as foreign nationals working and living in the province with valid residence permits. Tourists are excluded.

To reflect the open nature of the free trade port, Hainan will not impose any restrictions on investors of duty-free stores, Lu stressed, noting that state-owned enterprises, private firms, foreign-invested companies, as well as those funded by investors from Hong Kong, Macao, and Taiwan, can all participate.

In a joint notice released yesterday, the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration said that residents of the Hainan Free Trade Port can enjoy an annual duty-free quota of up to CNY10,000 (USD1,390) for imported goods listed in an official catalogue when bought at designated venues. The exemption covers import duties, import-related value-added tax and consumption tax, as well as domestic circulation value-added tax and consumption tax.

Duty-free imported goods are limited to 202 types of daily-use products listed in the catalogue, including baby formula, beef, toothpaste, fish, pens, kitchenware, and fresh fruits. Residents must buy and take delivery on-site at qualified duty-free stores within Hainan.

The implementation of the policy will lower the prices of imported daily necessities in Hainan by an average of 8 percent to 20 percent compared with markets outside the island, reducing residents' living costs, industry insiders told Yicai. Using infant formula as an example, the annual CNY10,000 duty-free quota can help residents save CNY1,500 to CNY2,000 (USD209 to USD278) in taxes, they added.

Visitors to the Hainan Free Trade Port have long been entitled to an annual duty-free quota of CNY100,000 (USD13,900) for consumer goods, while locals previously could only enjoy duty-free benefits within 30 days with valid offshore departure certificates, provided they had actual departure records in the calendar year. In addition, the offshore duty-free policy mainly covers medium and high-end consumer goods and does not fully cover frequently used daily necessities.

Editors: Tang Shihua, Martin Kadiev