Foreign companies are stepping up investment in the Hainan Free Trade Port, after the southern Chinese island province rolled out special customs operations and favorable policies to allow the freer entry of overseas goods, expanded zero-tariff coverage and more business-friendly measures.

On the first day the new customs initiative took effect on last Thursday, Siemens Energy, a Fortune Global 500 company, registered a subsidiary in Hainan and broke ground on a new gas turbine assembly base and service center in the Yangpu Economic Development Zone.

Covering nearly 40 acres, the project is scheduled to be completed and operational by 2027, enabling localized production of gas turbines.

Company representatives say the decision to establish the manufacturing base in Yangpu was driven by Hainan's favorable business environment and the policy benefits of the island's special customs operations.

"We saw at that time already that we have a potential good partnership based on trust and common success. With the Free Trade Zone option, we have the chance at Siemens Energy to optimize our logistic processes, and to reduce administration efforts and make everything faster," said Lars Voelker, general manager of Siemens Energy (Hainan).

Another European firm upgrading its production lines in Hainan is PB Leiner, a globally renowned gelatin and collagen manufacturer from Belgium. The addition of new equipment at its Hainan plant will help increase its overall production capacity by 30 percent, and enable the company to introduce two new product categories to meet growing market demand.

"We have a good opportunity to move our product around [and have] very close access to the mainland as well as the rest of Asia. Having access to the ports gives us opportunities for the rest of the world as well. Especially with the new announcements of the free trade is also a positive development. As we grow, we can take into consideration [the] more advantageous tax policies and tariff policies," said Giles Verheecke, engineering and maintenance manager at PB Leiner USA.

Since the release of the master plan for Hainan Free Trade Port in 2020, international investors have increasingly targeted the island as a key destination, signaling strong confidence in China's push to build a high-level free trade port.

Over the past five years, Hainan actually utilized 102.5 billion yuan (about 14.56 billion U.S. dollars) of foreign investment, with an average annual growth rate of 14.6 percent, while more than 8,000 new foreign-funded enterprises have been established across the island province.

Hainan has also attracted investors from 176 countries and regions over the past five years, while its overseas direct investment has recorded an average annual growth rate of 97 percent.