China tax refund policy: How instant rebates boost tourism

China’s State Taxation Administration announced the nationwide expansion of its instant tax refund program for overseas travelers on April 8. The policy, which had been piloted in cities such as Shanghai, Beijing, Guangdong, Sichuan, Zhejiang, and Shenzhen, enables international shoppers to receive their refunds at the point of purchase rather than when they depart. The idea is simple: make it easier to spend the refund immediately, enhancing the overall shopping experience and, ideally, boosting consumption. While some netizens joked that the policy might give a boost to the “daigou” (personal shoppers who engage in tax arbitrage trade) market, most viewed the move favorably, seeing it as a way to attract more international travelers to China and inject energy into consumer spending. The psychology behind point-of-purchase refunds Amid escalating trade tensions, China is sending a clear message to the global market: it is open for business. One of the more targeted moves in that direction is the expansion of its instant tax refund policy for outbound travelers — viewed by many as a subtle but effective countermeasure to the recent U.S. tariff hikes. According to officials from the State Taxation Administration, the pilot program ran smoothly and was well received by international visitors. Chengdu, one of the earliest cities to pilot the program, offers a compelling snapshot of the policy’s potential. As of 2024, the city was home to 429 tax-refund-eligible retailers, a 34% increase from the previous year. Among them, 49 stores offer instant refunds. The total amount refunded to foreign travelers has reached nearly 30 million RMB ($4.1 million), contributing to over 250 million RMB ($34.2 million) in retail sales, a year-on-year surge of more than 400%. These figures underscore the policy’s effectiveness at the local level and its ability to encourage spending. The visa-free catalyst The policy’s success is also closely tied to broader efforts to ease inbound travel restrictions. In late 2023, China started unilaterally granting visa-free access to citizens of countries including France, Germany, Italy, and Malaysia. A year later, the number of countries reached 38, accompanied by extended stay durations for foreign travelers — moves that have made visiting China significantly easier for international tourists. According to data from China’s National Immigration Administration, the number of visa-free entries by foreign nationals in 2024 reached 20.115 million, more than double the previous year (112.3%). As entry restrictions were loosened, the phrase “China Travel” surged in popularity across social platforms, with related hashtags garnering over 480 million views on Xiaohongshu (also known as RedNote) alone. Korean tourists: China’s new power shoppers South Korea provides a case in point. Since the visa-free policy took effect, enthusiasm for travel to China has grown sharply among Korean tourists. According to the Shanghai Municipal Government, the number of South Korean visitors to the city rose by 91.18% YoY in November and 141.46% YoY in December 2024. On Xiaohongshu, a growing number of Korean users are documenting their Shanghai itineraries, treating the city as a go-to destination for spontaneous weekend getaways. It’s clear that the visa-free entry initiative, when paired with the instant tax rebate policy, is helping turn tourism into a domestic consumption driver, effectively redirecting demand for Chinese goods from overseas markets.

China’s tourism hack: Instant tax refunds, instant results

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China’s tourism hack: Instant tax refunds, instant results