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Sanya, the top tropical holiday destination on China’s southern Hainan Island, began closing its duty-free malls on Friday in response to the worsening COVID-19 outbreak.

Since China closed its international borders in early 2020 to stem the spread of COVID-19, Hainan’s duty-free industry has flourished, becoming an important channel for global brands from Gucci to Coach, La Mer to L’Oréal to reach Chinese shoppers.

But Sanya International Duty Free City in Haitang Bay, operated by China Duty Free Group and Hainan’s largest offshore mall, was closed indefinitely on Friday to prevent the spread of COVID-19, according to a post on its Weibo account.

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The closure comes despite the fact that no cases of Hainan’s current outbreak have yet been detected in Haitang Bay. Although the number of cases in China is low compared to the rest of the world, Beijing follows a “dynamic zero” policy, which enforces strict controls to stop any virus transmission.

China to close duty-free shopping center to contain COVID amid latest outbreak  Pictured: Sanya International Duty-Free Shopping Complex in Sanya, Hainan Province, China on November 25, 2020.

China to close duty-free shopping center to contain COVID amid latest outbreak Pictured: Sanya International Duty-Free Shopping Complex in Sanya, Hainan Province, China on November 25, 2020.

Health officials in Hainan told a news conference on Friday that the number of local confirmed cases reported in the current outbreak from August 1 to 5 was 191.

Many bars and entertainment venues, including cinemas and some tourist sites, were also closed to help contain the spread of the virus, although hotels remained open and most people contacted by Reuters said they were operating as normal.

This is the second time 2022 has seen the closure of duty-free malls in Hainan, with the island also closing in April in the wake of another outbreak.

“The outbreak in March and April had a big impact on us,” said a catering worker at Sanya International Duty Free City, whose English name is Dream.

Business has returned to 70 to 80% of last year’s levels before the latest outbreak, she said.

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Last week, Hainan’s capital city, Haikou, hosted the second China International Consumer Products Expo, where LVMH, Kering, Richemont, Tapestry and Burberry were among global brands on display.

Last year, due to reshored mainland consumer spending and policy moves, the value of offshore sales of duty-free goods in Hainan reached about 49.5 billion yuan, about $7.3 billion at current exchange, up 80% year-on-year.

“Now the virus is back in August, which makes it very difficult to do business,” Dream told Reuters.