The world's largest duty free store officially opened in the coastal city of Sanya in the southern island province of Hainan on Monday, attracting thousands of shoppers on its opening day.

Sanya Haitang Bay International Shopping Mall  has a shopping area of 72,000-square-meters, the largest in the world. It has attracted nearly 300 international brands, including luxury brands such as Giorgio Armani, Rolex and Prada.

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The Haitang Bay Duty Free Shopping Center, operated by China Duty Free Group under China International Travel Service Group, has a total investment of $5 billion yuan, or about US$814 million, and replaces the existing duty free shop in Sanya's downtown.

The State Council, China's cabinet, gave Hainan province permission to run a duty-free program on a trial basis in April 2011. The object was to help promote the island and create a world-class, international tourist destination by 2020.

Tourists and local residents aged 16 or above can enjoy duty exemptions on certain imported commodities worth no more than $8,000 yuan before flying to other destinations within China.

From 2011 to 2013, Hainan saw an annual 15 percent increase in its tourism revenue on average with offshore duty-free sales accounting for 10 percent of the total revenue.

Professor Liu Baocheng with the University of International Business and Economics believed the duty free stores benefitted both the local economy and consumers.

"Such a large duty free store may reduce the cost of transactions, for instance, lowering tariffs and the cost of consumption, thus boosting tourism," Liu said. "This store may play a major role in boosting the local economy."

Liu said all transactions wre supervised, making it very unlikely that people could take advantages from the duty free stores to evade taxes.

TagsDuty Free, China Duty Free Shop, Sanya Haitang Bay International, malls, retail, Hainan