China Expands Tax Refunds, Free Visas to Boost Tourism

China's Ministry of Commerce, in collaboration with other government agencies, announced improved tax refund policies for foreigners, including the expansion of the range of eligible stores in commercial zones, tourist attractions, airports, and hotels, in a move aimed at stimulating foreign consumption and supporting the domestic economy amid weak domestic demand.

According to a statement issued on Sunday, the minimum tax refund for a single foreign traveler at the same store on the same day will start from 200 yuan, or $27.45. This move aims to encourage tourists to spend domestically and increase the attractiveness of the Chinese market to foreign visitors.

China saw a significant increase in tourist arrivals in 2024 thanks to its visa-free policies. The country recorded 26.94 million foreign arrivals, generating revenues of $94.2 billion, up 95.5% and 77.8%, respectively, compared to 2023.

Despite this recovery, these figures remain below pre-pandemic levels, representing 85% of arrivals and 91% of revenues recorded in 2019. Visa-free policies have played a pivotal role in this recovery. Over the past two years, the Chinese government has unilaterally eased entry restrictions for 38 countries and expanded its transit-free entry policy to 54 countries.

Visa-free visas saw a significant increase at the end of 2024 after the policy was extended to 18 additional countries, mostly European, last November. Visa-free entry accounted for 74.6% of total arrivals, representing approximately 20.1 million visitors, a 112.3% increase over 2023.

In addition to customs policies, China has taken steps to improve the foreign tourist experience, including allowing foreign bank cards to be linked to digital payment apps such as WeChat and Alipay, essential tools in China for purchasing everything from train tickets to meals.

These facilities are part of a comprehensive plan to improve China's travel environment, despite the persistence of some structural challenges, such as limited international flights compared to pre-pandemic levels.

Indications suggest that inbound tourism will continue to rise in 2025. China saw a 22.9% increase in foreign visitors during the Spring Festival season compared to the previous year, strengthening expectations for further recovery in the coming period.

Despite slowing domestic consumption, domestic tourism set a record in 2024, generating 5.75 trillion yuan (about $790 billion), a 17.1% increase over 2023 and slightly exceeding 2019 levels by 0.5%.

Domestic tourism destinations have grown, driven by successful TV series and movies that have inspired many domestic tourists, particularly to regions like Xinjiang in the northwest, which welcomed a record 302 million visitors during the year.

In contrast, the recovery in outbound tourism has been slower, with the number of outbound trips by Chinese citizens reaching 145.89 million in 2024, representing 86% of 2019 levels, with numbers expected to return to previous levels this year.

These measures, from tax concessions to visa and digital payment reforms, reflect China's commitment to boosting inbound spending and achieving a balance between domestic and international tourism to support the national economy.