China will select some 15 cities for a program aimed at building a world-class consumption environment, and attracting spending from overseas tourists. Analysts said the goal is not merely about stimulating domestic demand, but about refining the country’s consumption ecosystem to international standards, which in turn will drive product and service upgrades and catalyze sustainable economic growth. Last year, consumption from inbound tourists in China accounted for approximately 0.5% of the country’s GDP, while the ratio in major world economies ranges from 1% to 3%, indicating significant untapped potential for inbound tourism consumption. To this end, the Ministry of Finance and the Ministry of Commerce (MOFCOM) in late September rolled out measures to create a more attractive and convenient marketplace to cement China’s status as a premier global consumption destination.
Eligibility for the pilot extends to cities already designated as international consumption centers, as well as other prefecture-level cities and above that demonstrate strong consumer-driven economies, significant growth potential, and a sizable flow of international tourists. In 2021, Shanghai, Beijing, Tianjin and Chongqing, as well as Guangzhou in Guangdong province, were identified as the country’s international consumption center cities.
According to the Ministry of Commerce (MOFCOM), as of July this year, total retail sales of consumer goods in these five national-level international consumption center cities accounted for more than one-eighth of the national total. These cities are also home to a quarter of the national-level demonstration pedestrian streets, around one-third of China’s time-honored brands, over half of the country’s consumer goods imports, and about 70% of duty-free sales. “To enhance the potential of inbound tourism consumption and build a more internationalized consumer environment, these hubs will undoubtedly be the starting point,” said Jiang Zhao, Associate Researcher at the Chinese Academy of International Trade and Economic Cooperation. According to the plan, the five international consumption center cities will receive total funds of CNY200 million each, while other pilot cities will be allocated CNY100 million each. The subsidies will be paid in two tranches, with only a portion delivered in the first year. The release of the remaining funds is conditional on a performance evaluation, creating a powerful incentive for local governments to deliver tangible results.
The policy framework, detailed in the recent guideline, moves beyond macro-economics to a highly practical checklist. On payments, the guideline offers a clear response to a major pain point. It calls for increasing the coverage of point-of-sale (POS) terminals that accept foreign bank cards in key areas, installing more currency exchange kiosks, and ensuring merchants have sufficient cash to facilitate transactions. In a society that bypassed credit cards, leaping from cash to payment apps like Alipay and WeChat Pay, the simple act of paying for a taxi or a museum ticket can become a logistical hurdle for those without a Chinese bank account, said Hong Tao, Vice Chairman of the China Consumer Economics Society. “The goal is to meet international visitors where they are, not where we are,” Hong said. “It’s about creating a ‘bilingual’ experience in payment, just as you would with language or signage. The seamlessness of a transaction is the first impression of our hospitality.”
Another shift lies in the approach to service. The guideline calls for improvements including multilingual signage, the establishment of visitor service counters, access to volunteer interpreters, and staff training in international protocols. It is a recognition that hospitality is a measurable component of infrastructure. “The quality of an international consumption environment is hidden in these exact details,” Hong said. For the pilot cities, this means their first task is rigorous self-auditing – pinpointing the exact pain points that deter international consumers, whether in payment systems, multilingual services, product quality, or retail diversity, Hong added. For Wang Sisi, a Beijing-based tour guide with years of experience catering to foreign clients, adding luggage storage at scenic spots addresses a cultural difference in how people travel. “Chinese tourists often prefer suitcases, leaving them in their hotel room or the luggage compartment of a tour bus,” Wang said. “But foreign backpackers are different. They often carry their world on their backs – large, professional-grade packs, sometimes with a baby in a carrier. It’s their norm. So for them, accessible luggage storage points are a necessity.”
Cities already designated as international consumption centers are being pushed to benchmark against the world’s top-tier metropolises to rapidly evolve into influential global destinations, setting a high bar for the nation, said Xu Hongcai, Deputy Director of the Economic Policy Committee of the China Association of Policy Science. The essence of this pilot program isn’t just to create 15 shining examples, but to develop 15 sets of replicable solutions. The country is building a playbook for consumption upgrades that can work across different city tiers and regions, according to Xu. The enrichment of high-quality consumption offerings and the creation of diverse, integrated consumption scenarios will contribute to a more vibrant and satisfying consumer experience for both international and domestic audiences, the China Daily reports.
