China Lowers Tax Refund Threshold to Revitalize Tourist Spending Amid Trade Tensions

China has lowered the tax refund threshold for foreign tourists to stimulate consumer spending as part of new policies unveiled on Sunday. The move comes as the Chinese economy faces pressure due to the trade war with the United States, promising potential growth in inbound tourism expenditures.

In a strategic move to bolster its economy, China announced a series of policy changes on Sunday, including a reduced threshold for tax refunds available to foreign tourists.

By lowering the minimum spend for eligibility to 200 yuan ($27) from a previous 500 yuan ($69), China's Ministry of Commerce aims to drive up tourist expenditure. The maximum cash rebate limit has been increased to 20,000 yuan ($2,745), with plans to expand tax refund shop coverage and expedite procedures.

The initiative is designed to increase inbound tourist spending, which currently accounts for 0.5% of China's GDP, compared to 1% to 3% in other major nations. As U.S.-China trade tensions escalate, China is keen on expanding consumption to avoid further economic slowdown.

(With inputs from agencies.)