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China has introduced a new policy that enables foreign visitors to claim departure tax refunds for purchases as low as 200 yuan ($27) per day at the same store, significantly reducing the previous threshold of 500 yuan.

This is part of the country's latest move to optimize the departure tax refund policy for foreign visitors. The updated policy will streamline refund procedures and attract more overseas visitors, government officials said on Sunday.

According to a policy document jointly released on Saturday by six government branches, including the Ministry of Commerce and the Ministry of Finance, the country will encourage the establishment of more departure tax refund stores in major commercial areas, pedestrian streets, tourist attractions, resorts and airports to expand nationwide coverage.

Measures will also be taken to promote the inclusion of international brands, popular domestic products and time-honored brands, as well as souvenir, gift and specialty stores, as part of the tax refund network.

The policy move comes as China is ramping up efforts to boost consumption amid fresh trade tensions triggered by the United States' imposition of arbitrary tariffs on many trade partners including China.

Speaking at a news conference in Beijing, Sheng Qiuping, vice-minister of commerce, noted that inbound consumption contributed about 0.5 percent to China's GDP last year, compared with 1 percent to 3 percent in other major economies, underscoring substantial growth potential.

He said the tax refund mechanism plays a critical role in lowering shopping costs for foreign visitors and attracting greater inbound consumption. "For example, under the prevailing value-added tax system, the refund rate for general goods is set at 11 percent, effectively providing a more than 10 percent discount."

Under the policy, foreign visitors can claim VAT rebates directly at departure tax refund stores, enabling them to reuse the refunded amount in real time for further shopping. Previously, VAT rebates were only available for withdrawal upon departure, according to information released by the State Taxation Administration.

The upgraded tax refund policy, initially implemented in cities such as Beijing and Shanghai, and Shenzhen in Guangdong province, has been expanded to a nationwide rollout.

The Commerce Ministry said that last year, the total spending by inbound travelers reached $94.2 billion, up 77.8 percent year-on-year.

Miao Muyang, director of the industrial development department of the Ministry of Culture and Tourism, said the upgraded policy will not only help expand inbound tourism, but also promote the outbound reach of more high-quality domestic products.

In addition to raising the cash refund limit from 10,000 yuan to 20,000 yuan, the government will also strengthen cooperation between tax refund agencies and payment institutions to offer refund services through multiple channels, including mobile payments, bank cards and cash.

"These adjustments are aimed at encouraging foreign visitors to purchase a wide range of products in China," said Jia Ronge, director of the Finance Ministry's tax policy department.

In the first quarter of 2025, customs authorities at Beijing Capital International Airport and Beijing Daxing International Airport collectively verified 4,801 departure tax refund applications submitted by overseas travelers, a year-on-year increase of more than 122 percent, while the total refund amount came to 240 million yuan, up 82 percent year-on-year, according to statistics from Beijing Customs.

Zhao Zhao, deputy head of customs at the Daxing airport, said that China's 240-hour visa-free transit policy, available to ordinary passport holders of more than 50 countries, has significantly boosted the number of foreign visitors and their spending amounts in China.

Data from the National Immigration Administration shows that foreign nationals made 9.22 million entries into China through various ports in the first quarter, a year-on-year increase of 40.2 percent, indicating that inbound travel is continuing to gain momentum.

Tsimber Maksim, a Russian tourist, said he bought many items in Shanghai last week, including clothes for his children, sneakers and household goods.

Maksim received an 11 percent refund after he submitted an application, listing all the purchased items and their corresponding prices and taxes, at the customs declaration counter at the Daxing airport.