China scraps drug tariffs to boost medical tourism

China waives tariffs on drugs and medical devices in Hainan pilot zone, aiming to boost international medical tourism and attract more visitors by 2030.

China has announced it will eliminate tariffs on imported medicines and medical devices in a pilot zone in the southern province of Hainan, aiming to boost domestic and international medical tourism. In addition, imports will be exempt from value-added tax (VAT) until the island achieves customs independence in 2025, according to a statement released by the Ministry of Finance and four other ministries.

The measure will be implemented in the Boao Hope Lecheng medical tourism pilot zone in eastern Hainan, which the central government aims to develop into a global medical tourism destination by 2030. Medical institutions, colleges and research institutes in the zone will be able to purchase Chinese-approved drugs and devices. Products that have not been approved by the central government but are authorized by the Hainan local government — with the exception of vaccines — will also be able to be purchased tariff-free.

However, these products can only be used within the pilot zone for the specified purposes and cannot be removed or transferred outside the region, according to the statement. China currently imposes tariffs ranging from 0% to 6% on imported medicines, in addition to a VAT rate of 16%.

Beijing has transformed Hainan, a 35,000-square-kilometer island, into the world’s largest free-trade port, offering tax breaks and visa easing for tourists and business travelers. Citizens of 59 countries, including the United States, Canada and Australia, can travel to the island without a visa.

Traditionally, tourists from less developed countries sought medical treatment in developed nations, but increasingly travelers from developed countries are seeking destinations with lower-cost treatments. Countries such as Turkey, Mexico, Thailand and South Korea are references in medical tourism, offering services such as cosmetic surgery, orthopedic surgery and fertility treatments.

Since 2019, Boao has been working to facilitate the entry and residence of foreign healthcare professionals, patients and their companions. The city also plans to integrate medical tourism with neighboring towns and cities, combining medical treatments with environmental conservation initiatives.

Following the slowdown in inbound travel, China has been taking measures to attract more visitors, such as visa-free policies for 12 countries, facilitating payment methods and international promotional campaigns. In the first six months of this year, the country welcomed 14.64 million foreign tourists, an increase of 152.7 percent over the same period last year.

With information from the South China Morning Post