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China Cuts Tourist Tax Refund Threshold and Doubles Rebate Cap to Boost Spending

New measures, including streamlined refund processes and expanded shop coverage, aim to enhance inbound tourist consumption as trade tensions weigh on economic growth.

Lyndon Lin, owner C.K. Color Stone and Beads, rear, walks behind beads from China and other Asian countries displayed at his shop in Chinatown in San Francisco, Friday, April 18, 2025. (AP Photo/Jeff Chiu)
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Tourists take photos in front of the financial Central district and Victoria Harbour in Hong Kong, China, May 9, 2023. REUTERS/Tyrone Siu/File Photo
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Overview

  • China reduced the minimum spending requirement for foreign tourist tax refunds from 500 yuan to 200 yuan, effective Saturday.
  • The cash rebate ceiling for foreign tourists was doubled to 20,000 yuan, alongside plans to streamline refund procedures and expand the number of eligible shops.
  • Officials are encouraging the establishment of immediate rebate points in tourist-heavy areas to facilitate easier refunds for travelers.
  • Inbound tourist spending reached $94.2 billion in 2024, representing only 0.5% of China's GDP, significantly lower than the 1–3% seen in other major economies.
  • These measures are part of broader stimulus efforts, including subsidies for auto and appliance trade-ins and increased housing funding, to counter the economic pressures of escalating US-China tariffs.