In a significant move to bolster inbound consumption, China has reported a remarkable increase in tax refund transactions following its newly implemented tax-refund-upon-departure policy. This policy is aimed at enhancing foreign tourist spending, and its impact is evident in the surge in both the number of tax refund stores and the total amounts refunded.

Between April 27 and May 26, the tax authorities noted a staggering 116 percent year-on-year increase in departure tax refund transactions, with sales at tax refund stores rising by 56 percent, according to data released by the State Taxation Administration.

The nationwide adoption of the refund-upon-purchase service model has contributed significantly to this trend, with related transactions exploding by 32-fold and sales increasing 50-fold compared to the previous year.

As a direct result of the new policy measures, the number of departure tax refund stores has expanded significantly, with 1,303 new establishments opening across the country during this period. This brings the total to 5,196, marking a 40 percent increase since the end of 2024.

China's efforts to optimize its departure tax refund system involve a comprehensive range of measures, including a reduction in the minimum purchase threshold for refunds, an increase in the cash refund ceiling, and an enlargement of the network of participating stores along with a broader variety of products covered.

The policy now allows international tourists to receive tax refunds instantaneously at retail outlets if they spend at least 200 yuan, which is approximately 27.84 US dollars, at a single store in one day. Refunds can be received through various payment methods, including mobile payments, bank transfers, and cash.

Major urban centers, particularly Shanghai, have been at the forefront of this shopping surge. In the month following the policy rollout, sales involving tax refund transactions in Shanghai witnessed an impressive 86 percent year-on-year increase, along with a 77 percent rise in the total amount refunded.

Retailers are seeing the benefits of the new tax refund policy. For instance, Chen Xiaoling, general manager of Shanghai's Florentia Village outlet mall, emphasized that the raised cash refund ceiling and reduced threshold for refunds enhance the shopping experience for foreign visitors, offering them significant value across a diverse range of products.

The streamlined refund process appears to have invigorated international tourists' shopping enthusiasm. High-profile malls, such as WF Central in Beijing, prominently display promotional materials for the refund-upon-purchase service, making it accessible in nearly 40 international-brand stores.

Shopping destinations like Plaza 66 in Shanghai consider the refund-upon-purchase service as essential for enhancing market competitiveness, having processed over 280 such transactions by May 27, exceeding the entire total for 2024.

To promote inbound consumption further, China is accelerating its development of international consumption centers in major cities including Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing, strengthening their status as shopping hubs.

Additionally, the government plans to increase the number of duty-free stores and expand the eligibility of products for refund-upon-purchase services, especially focusing on high-tech goods favored by younger consumers. Vice-Commerce Minister Sheng Qiuping affirmed that China aims to continue improving its international consumption environment by offering high-quality products and diverse shopping experiences.