China Introduces Tax Refund Reform to Boost Tourism

China has announced a reduced tax refund threshold for foreign tourists, seeking to boost consumption amid trade tensions. The initiative reduces the minimum spend to 200 yuan and doubles the rebate cap, alongside efforts to streamline refund processes and expand tax refund shops.

In a strategic move to bolster its economy amidst trade conflicts with Washington, China has announced a significant reduction in the threshold for tax refunds available to foreign tourists. As economic pressures mount, the government lowered the minimum spending requirement for refunds from 500 yuan to 200 yuan, effective from Saturday.

The reforms, articulated in a joint statement by the Ministry of Commerce and other authorities, also include doubling the maximum cash rebate to 20,000 yuan. This is part of broader efforts to enhance consumption during a period when Chinese economic growth is confronting headwinds from heightened tariffs imposed by the U.S.

Officials are encouraging the setup of immediate refund points in tourist hotspots to streamline the rebate process. The Vice Minister of Commerce highlighted that tourist consumption represents a small fraction of the GDP but has considerable growth potential. Such moves underscore China's determination to remain open to trade and investment amidst global economic tensions.

(With inputs from agencies.)