On April 26, six government agencies, including the Ministry of Commerce, jointly issued the refined departure tax refund policy, slashing the minimum refund threshold from 500 yuan ($69) to 200 yuan ($28), doubling the cash refund limit from 10,000 yuan ($1,376) to 20,000 yuan ($2,752) and encouraging shopping districts, tourist attractions and hotels to increase the number of tax refund stores.

Following pilots in its southernmost Hainan Province since 2011, China has implemented departure tax refunds—an international practice where international travelers reclaim value added tax (VAT) paid on purchases—since 2015 with unique generosity. "China refunds 11 percent of tax-included prices on most goods, effectively the full VAT amount," Jia Ronge, Director of the Ministry of Finance's Tax Policy Department, said at an April 27 policy briefing. "The coverage includes all categories—except for a few restricted items." 

Under the new policy, foreigners and Hong Kong, Macao and Taiwan compatriots staying in the Chinese mainland for under 183 days can claim refunds for same-day purchases exceeding 200 yuan at the same store, provided goods remain unused. This 200-yuan threshold perfectly suits high-frequency purchases like tea, cultural souvenirs and cosmetics, while the doubled cash limit accommodates luxury goods and electronics. 

Reshaping shopping experiences 

American beauty blogger @LuLu posted on popular Chinese lifestyle and e-commerce app RedNote: "I feel like China actually cares more about American citizens than America does about its own people. They're making policies that make things easier for Americans." She elaborated, "As an American citizen, I don't even need a visa to visit China [under China's visa-free transit policy] right now. For 240 hours (10 days), I can travel, shop anywhere and get immediate tax refunds."

According to official data, in 2024, sales of goods eligible for departure tax refunds rose 120 percent year on year in China, and the total amount of tax refunded increased by 130 percent. Inbound tourists spent $94.2 billion last year, up 77.8 percent from a year earlier.

In Beijing, overseas tourists' tax refund applications have surged by 210 percent year on year so far this year, with corresponding sales up 150 percent and tax refund amounts increasing by 170 percent.

This policy is reshaping retail landscapes. Beijing's Pearl Market (Hongqiao Market), a jewelry hub since the 1970s, has operated as a tax refund store since 2015. "We've provided this service for years to enhance our global competitiveness, attract foreign visitors and boost local economy," Zhou Guifang, the market's Deputy General Manager, told Beijing Review.

Tax manager Ma Tao of Beijing's luxury shopping destination SKP told Xinhua News Agency that hundreds of shopping outlets now offer tax refunds across categories like clothing, cosmetics and watches.

Beyond luxury goods, time-honored Chinese brands also attract foreign shoppers. "With growing tourism and overseas brand recognition, we're seeing more tax refund applications, mainly for traditional Chinese medicines like cordyceps (a fungus) and edible bird's nest," Zhang Rui, Deputy Manager of Tongrentang Pharmacy in Beijing's Dashilar shopping and tourism district, said. 

Under pilot programs in Beijing, Shanghai and provinces including Guangdong, Sichuan and Zhejiang, at designated stores that have implemented the departure tax refund policy, international shoppers can receive tax refunds on-site immediately after completing credit card pre-authorization procedures and signing agreements.

Accordingly, in those regions, eligible shoppers receive immediate refunds equal to their tax amount in Chinese yuan, enhancing satisfaction and, thereby, lifting consumption levels.

Chengdu began to pilot this service in 2023, with 49 participating stores as of this April. British RedNote user @TobyinChina shared his experience at Chengdu IFS, a world-class one-stop shopping destination in Chengdu, Sichuan: "The instant tax refund service counter was easy to find. You just need a credit card and passport—instant cash refund, amazing!"

On April 8, the State Taxation Administration expanded the practice nationwide, allowing on-site refunds. "This moves the refund process from airports to stores, giving travelers immediate benefits and encouraging repeat purchases while saving time at departure," explained Xie Wen, Director of the State Taxation Administration's Goods and Services Tax Department.

Changsha IFS, a pilot site in Hunan Province, now has 31 participating stores across fashion, accessories and cultural products. Mall staff report improved shopping experiences compared to those offering traditional airport refunds.

This convenience is reshaping consumption patterns. In April, an American traveler showcased purchases: a Huawei foldable phone, two Jingdezhen porcelain sets and three Yunnan Pu'er tea cakes, saving nearly $500 after refunds. According to her, she could enjoy a three-day Xi'an trip with the savings.

"The combination of instant refunds, visa-free entry and transit policies and mobile payments boosts inbound consumption, signaling China's openness," Liu Huan, a professor specializing in fiscal, taxation and financial research at the Central University of Finance and Economics, told Xinhua.

Beyond consumption

China has unilaterally waived visas for 38 countries, extended transit visa-free stays to 240 hours for 54 countries and introduced various entry facilitation measures.

According to the National Immigration Administration, there was a 96-percent increase in foreign visitor numbers last year. Additionally, the number of foreign arrivals has soared 40.2 percent year on year since the 240-hour visa-free transit policy's implementation in December 2024, including 6.57 million visa-free entries.

Departure tax refunds benefit travelers while promoting Chinese goods and culture globally. The policy impact extends to cultural perception shifts: from last year's #ChinaTravel social media trend where international visitors shared authentic experiences, to this year's YouTube content creator IShowSpeed stirring excitement during his China visit. Social media is helping to shift "Made in China" narratives from mere cost-efficiency to cultural affinity.

Some U.S. bloggers say they will bring empty suitcases to China not for sightseeing but for reverse daigou. The daigou industry encompasses individuals or agents who make retail purchases overseas for resale in the Chinese market. Chinese netizens joke that foreign visitors need only prepare Alipay, a Chinese digital wallet, and luggage for the ultimate shopping experience. Stories of Americans flying to China for made-in-China goods are trending topics on social media. BR

Printed edition title: Cashback Charm 

Copyedited by Elsbeth van Paridon

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