At the end of 2025, China will fully open Hainan to free trade – a radically liberalized economic zone without traditional customs controls, with simplified compliance, open data flows, and tax breaks. What at first glance appears to be a strategic modernization raises serious questions from a European perspective, however, particularly with regard to intellectual property protection and the fight against brand and product piracy. If traditional export controls are abolished or greatly reduced, goods can leave the country in a more uncontrolled manner. This lowers the threshold for counterfeiters to smuggle products from Hainan onto the international market.
In the future, Hainan is set to become a central hub for trade between China and the ASEAN countries, the RCEP partners, and the countries of the Belt and Road Initiative. This creates new, dynamic supply chains – but also opportunities for concealment via third countries such as Vietnam, Malaysia, or the United Arab Emirates. At the same time, it facilitates the direct delivery of counterfeit goods to end customers in Europe, particularly through drop shipping. The shift in focus from container shipping to parcel shipping places an additional burden on German customs surveillance. The more trade channels emerge, the more difficult it becomes to detect counterfeit products – especially when they are hidden in legal shipments.
The new openness could prove to be a catalyst for product piracy for German companies. Simplified compliance makes it more difficult to identify and effectively combat IP infringements in cross-border traffic. The free flow of data hinders the traceability of production sites, supply chains, and platform providers. Simplified approval processes and technology transfers allow know-how to flow unchecked, local imitations of German products become more technically sophisticated and market-oriented, and legal control over intellectual property rights remains fragile—especially outside the special zone. The focus on speed and efficiency in trade is displacing protective mechanisms in favour of economic optimization—which primarily benefits counterfeiters, but not rights holders.
For German brand owners, the opening of Hainan means an increased risk of counterfeit products being imported, more difficult prosecution due to new trade routes, and stronger international networking among counterfeiters. It is therefore advisable to register trademarks and patents in Hainan at an early stage, systematically monitor Chinese B2B and e-commerce portals from a Hainan perspective, intensify international anti-counterfeiting efforts in ASEAN countries, use modern tracking technologies to detect counterfeits, and carefully examine the legal framework for joint ventures or production relocations to Hainan.
Hainan is a testing ground for global competition where rules are being renegotiated. Those who do not follow this change closely run the risk of becoming a pawn in the process instead of actively shaping it.
China Intellectual Property Blog 