China lowers minimum amount for tax refunds for tourists to boost spending

Lyndon Lin, owner C.K. Color Stone and Beads, rear, walks behind beads from China and other Asian countries displayed at his shop in Chinatown in San Francisco, Friday, April 18, 2025. Photo by Jeff Chiu /AP

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BEIJING (AP) — China announced a lower threshold for tax refunds for foreign tourists among a series of policies on Sunday to boost consumption as its economy comes under pressure during a trade war between Beijing and Washington.

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Travelers can apply for a tax refund if they spend 200 yuan (about $27) at the same store on the same day and meet other requirements starting Sunday, according to a joint statement by the Ministry of Commerce and other authorities. Previously, the minimum amount was 500 yuan (about $69).

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The upper limit for their tax rebate in cash also has been doubled to 20,000 yuan ($2,745).

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The government will expand the coverage of tax refund shops and streamline the procedures. Officials encourage some regions to set up refund points for travelers to get rebates immediately after their purchases in areas highly concentrated with tourists, the statement said.

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China’s Vice Minister of Commerce Sheng Qiuping told reporters in a news conference that inbound tourist consumption accounted for about 0.5% of China’s gross domestic product in 2024, while figures in other major countries ranged between 1% and 3%. That indicated a great potential for growth, Sheng said.

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Last year, inbound tourists’ spending hit $94.2 billion, up 77.8%, he added.

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China’s economy expanded at a 5.4% annual pace in January-March, the government said earlier this month, supported by strong exports ahead of U.S. President Donald Trump’s rapid increases in tariffs on Chinese products.

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But analysts expected the world’s second largest economy would slow significantly in the coming months as tariffs as high as 145% on U.S. imports from China take effect. Beijing has hit back at the U.S. with 125% tariffs on American exports, while also stressing its determination to keep its own markets open to trade and investment.

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China has stepped up efforts to spur more consumer spending and private sector investment over the past months, doubling down on subsidies for auto and appliance trade-ins and channeling more funding for housing and other cash-strapped industries.

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