Why shopping is driving inbound travel to China now
China is making shopping a central draw for international visitors, pairing instant tax refunds with easier entry and a broad range of competitively priced goods, from drones to fashion and cosmetics. Travel operators say the shift is clear. Steven Zhao, CEO of tour provider China Highlights, said shopping has become a stronger motivation for inbound travelers over the past two years, especially among visitors from the Middle East who are seeking high tech products like compact drones. New tax policies mean foreign visitors can claim value added tax refunds at the point of purchase rather than at the airport, and relaxed entry rules mean more travelers can arrive without a visa or with longer visa free transit stays. Together, these changes are turning shopping into a reason to visit rather than a casual add on.
What changed in 2025
On April 8, China introduced instant VAT refunds for tourists nationwide. Shoppers present passports at the register and receive their refund right away, often back to a credit card or eligible e wallet. The minimum spend per store per day to qualify for a refund fell from 500 yuan to 200 yuan, and the maximum cash refund limit doubled to 20,000 yuan. Refunds are processed digitally, replacing paper heavy procedures that required long airport queues. The new approach is designed to produce a simple price advantage at the moment of purchase, which encourages higher spending and reduces the risk that visitors skip the refund because the airport line is long.
Visa easing and easier payments
Entry is simpler for many travelers. China expanded visa free travel and extended the transit window to 240 hours for eligible visitors in late 2024, while increasing the number of ports that support these policies. During the recent May Day holiday, the country recorded a sharp rise in inbound trips by foreign nationals, including hundreds of thousands traveling on visa free rules. At checkout, stores can issue refunds to credit cards, to e wallets like Alipay or WeChat Pay, or in cash. Major mobile wallets now support many foreign bank cards, making it easier for first time visitors to pay and receive refunds without opening local accounts.
Instant VAT refunds, explained
The new system is open to foreign visitors, and to residents of Hong Kong, Macao and Taiwan, who have not stayed in mainland China for more than 183 consecutive days. Eligibility basics are straightforward. You must spend at least 200 yuan in a single participating store on the same day, buy for personal use, and keep the goods unused until you depart. Departure generally must occur within a set period after purchase, often within 90 days. The refund can be paid to a credit card, a supported e wallet, or as cash on the spot. A service fee of around 2 percent applies, and the effective refund rate depends on the item category, typically around 11 percent for goods taxed at 13 percent and around 8 percent for categories taxed at 9 percent. The refund must be validated at departure by presenting the goods and the paperwork to customs.
In practice the process is quick. Shoppers choose a store that displays tax refund or refund upon purchase signs, pay with a credit card in their own name, and show a passport to generate a digital VAT invoice and refund application. The system completes an instant refund and places a temporary pre authorization on the card that matches the refund amount. At departure, customs checks the documents and the goods. If everything is in order, the pre authorization is voided. If not, the pre authorization is converted to a charge. The number of tax refund stores is growing into the thousands across major cities and airports, and merchants are adding translation screens and multilingual staff to handle the higher volume of foreign customers.
Why shoppers are coming for tech and value
Price, selection and immediacy are strong pulls, especially for electronics. China produces a large share of the world’s consumer drones and accessories, and domestic retail often offers broader choice and faster availability for new models. Travelers from the Middle East have been arriving with shopping lists for compact drones and action cameras. Korean travelers are also emerging as enthusiastic buyers in Chinese malls, helped by familiar brands and competitive pricing. Instant refunds create a real time discount, which amplifies the sense of value and often prompts additional purchases during the same trip.
Store managers report that the new rules are delivering more foreign customers and higher receipts. One Beijing mall that embraced the instant refund model saw claims more than double. Analysts see a wider shift. A Morgan Stanley research note estimates inbound tourism revenue could climb from 11 percent of China’s travel market today to 18 percent within five years, with shopping taking a larger share as tariffs and other trade restrictions lift retail prices in many other countries.
A staff member at the DJI store in Beijing’s SKP mall described the shift in shopper behavior and product demand.
