Introduction

China has recently announced a major update to its tax refund rules for international tourists. These changes are designed to make shopping and tourism in China more attractive, offering greater savings for foreign visitors. Here’s a breakdown of how these new policies are set to reshape the landscape of inbound tourism.

Key Changes to China’s Tax Refund Policy

• Lower Purchase Minimum: The new policy reduces the threshold for claiming tax refunds from 500 yuan to just 200 yuan, making it easier for tourists to benefit from the refund scheme.
• Increased Refund Limits: Visitors can now claim up to 20,000 yuan in cash refunds, compared to the previous 10,000 yuan limit.
• More Refund Locations: With more duty-free shops available in key tourist areas, shopping for tax-free goods has become more convenient.
• Streamlined Process: The registration and filing processes for refunds have been simplified, allowing tourists to claim their refunds without hassle.
• Wider Range of Products: International and Chinese brands, as well as heritage products, will now be available for tax refunds, expanding the range of goods available to tourists.

Why China is Making These Changes

China’s government has been making concerted efforts to boost domestic spending as part of its strategy to counteract the negative impacts of the ongoing trade war with the US. By making tax refunds more accessible, China hopes to attract more foreign visitors and increase consumption within the country.

Sheng said the new policies were designed to overcome a series of problems such as the small number of places where visitors can claim tax refunds, a process that makes it difficult to apply for them, limited shopping options and the lack of domestic products on sale to visitors.

As a result, the authorities will allow more tax refund outlets in high-traffic areas such as commercial districts, tourist attractions and airports, while loosening registration conditions and filing process.

The new measures will also make it easier for tourists to claim refunds and improve the products on offer in duty-free stores by allowing a range of retailers – including international and Chinese brands, heritage products and cultural and other speciality shops – to join the duty-free network.

Despite a surge in revenue from foreign tourism last year, it accounted for just 0.5 per cent of China’s gross domestic product, compared with 1 to 3 per cent in developed countries, Sheng said.

In his government work report last month, Premier Li Qiang had listed “improving duty-free shop policies and promoting inbound consumption” as a key measure to stimulate consumption inside China – a key element of Beijing’s effort to revive the economy.

China reported a better-than-expected economic growth rate of 5.4 per cent in the first quarter, with retail sales of consumer goods up by 4.6 per cent year on year, according to the National Bureau of Statistics.

But the tariff war with the US is clouding its prospects for the rest of the year, with businesses already cancelling shipments and halting new orders.

Impact on Chinese Economy and Tourism

As part of its broader efforts to boost the economy, these new measures are aimed at stimulating growth in the tourism sector. In 2024, China saw a 95.5% increase in foreign visitors, and these tax changes are expected to further accelerate that growth. With over 26 million international tourists visiting China last year, this is a significant step forward in reclaiming its position as a major tourism hub.

Conclusion

These new tax refund policies reflect China’s commitment to boosting tourism and economic recovery. Whether you’re planning a trip or already in China, take advantage of the new opportunities to save while exploring the country’s vibrant cities and shopping districts. For more updates on China’s tourism policies, stay tuned to our blog!