Policy boost

International visitors' big spending in Shanghai Xintiandi epitomizes the city's and nation's growing reputation as a shopping paradise, largely driven by China's constantly expanding visa-free and optimized tax refund policies.

As of June, China's 240-hour transit visa-free policy has been extended to 55 countries in Europe, the Americas, Oceania and Asia, according to the National Immigration Administration.

The number of foreigners coming to China visa-free increased significantly in the first six months of the year, the NIA announced on July 16. From January to June, immigration authorities across China recorded a total of 13.64 million visa-free inbound trips made by foreigners, up 53.9 percent year-on-year.

China has also fine-tuned its departure tax refund policies, and boosted shopping convenience for global visitors.

Foreign visitors are eligible to claim departure tax refunds for purchases as low as 200 yuan ($27) per day at the same store, compared with the previous threshold of 500 yuan, and can get instant cash refunds up to 20,000 yuan, according to a new policy released in April.

Ongoing efforts are also being made to widen the scope of refundable goods, expand tax refund stores, and streamline refund procedures to offer efficient optimized services.

The policy highlighted the instant departure tax refund service, or, the "refund-upon-purchase" model. The service allows foreign tourists to claim value-added tax refunds at the stores, or nearby refund counters, rather than waiting until they leave the country. The measure is intended to encourage them to spend the refund on more shopping, according to the State Taxation Administration.

Last year, total spending by inbound travelers hit $94.2 billion, up 77.8 percent year-on-year. The nation sees substantial growth potential in the inbound consumption sector, and plans to increase the number of tax refund stores to about 10,000 nationwide this year, according to the Ministry of Commerce.

Shanghai is ramping up its efforts to become an international shopping center. As one of the first Chinese cities to implement the departure tax refund policy in 2015, it also took the national lead in piloting the instant tax refund service in January 2019.

Over the past decade, the number of tax refund stores in Shanghai has grown from 27 to over 1,400, covering shopping malls, traditional markets, intangible cultural heritage workshops, time-honored brands as well as high-end and flagship stores of international brands.