Latest news with #ShengQiuping
The Star
16-05-2025
- Business
- The Star
China to open more tax refund stores to boost inbound tourism and consumption
BEIJING: China plans to have around 10,000 tax refund stores across the country by the end of 2025, which is almost three times the number of existing stores currently. This is in line with the country's efforts to boost inbound tourism and consumption, said a senior official. By the end of 2024, China had more than 3,700 stores nationwide available for tax refunds for overseas visitors, adding more than 600 stores over the previous year, said the Ministry of Commerce. Promoting inbound consumption serves as an important lever to help vigorously boost consumption, and it holds great growth potential. It will also help offset the impact of additional tariffs to a certain extent, said Sheng Qiuping, Vice-Minister of Commerce, during a conference on May 15 in Beijing. China will continue to optimise the layout of tax refund stores, encourage various regions to set up such stores in major commercial complexes, shopping streets, tourist attractions, resorts and other places where overseas tourists gather, according to a guideline issued by the Ministry of Commerce and five other departments in late April. The country has lowered the starting point for tax refunds from 500 yuan (S$90) to 200 yuan and doubled the limit for cash refunds from 10,000 yuan to 20,000 yuan. In addition, the country will relax the registration requirements for retailers to become tax refund stores, allowing newly opened shops that have been established for less than a year to apply to become tax refund shops, and the filing time has been shortened to within five working days, the guideline said. 'Tax refund stores are also encouraged to broaden product offerings to include time-honoured brands, renowned Chinese consumer goods, smart devices, intangible cultural heritage items, crafts and speciality products,' Sheng said. Globally, Japan has more than 60,000 stores that are available for tax refunds for overseas visitors, and South Korea has some 20,000 such stores. France, Germany and Italy each have more than 10,000 such stores. The number of such stores in China is far from enough, the Ministry of Commerce said. In 2024, total expenditure of inbound tourists in China reached US$94.2 billion (S$122 billion), accounting for 0.5 per cent of China's GDP, which is lower than the proportions of 1 per cent to 3 per cent for major countries in the world, said the Commerce Ministry. 'Accelerating the promotion of the tax refund policy will help reduce shopping costs for overseas travelers and inject new impetus to boost consumption. This is an important measure for China to cope with external uncertainties,' Sheng said. China has been opening its doors wider to international travellers. In 2024, the country expanded its unilateral visa-free policy to include 38 countries, allowing visits of up to 30 days, according to the National Immigration Administration. Multiple favourable policies have helped significantly boost inbound consumption. During the recent five-day May Day holiday, the country saw the number of inbound and outbound passenger trips of foreign visitors exceed 1.1 million, up 43.1 per cent year on year, said the National Immigration Administration. Shanghai, one of the cities with the highest concentration of foreign tourists, said inbound consumption has become an important lever for it to actively respond to the trade frictions between China and the US, and promoting inbound consumption will help the city to build itself into an international consumption centre. - China Daily/ANN
Straits Times
16-05-2025
- Business
- Straits Times
China to open more tax refund stores to boost inbound tourism and consumption
This is in line with the country's efforts to boost inbound tourism and consumption, said a senior official. PHOTO: REUTERS BEIJING - China plans to have around 10,000 tax refund stores across the country by the end of this year, which is almost three times the number of existing stores currently. This is in line with the country's efforts to boost inbound tourism and consumption, said a senior official. By the end of 2024, China had more than 3,700 stores nationwide available for tax refunds for overseas visitors, adding more than 600 stores over the previous year said the Ministry of Commerce. Promoting inbound consumption serves as an important lever to help vigorously boost consumption, and it holds great growth potential. It will also help offset the impact of additional tariffs to a certain extent, said Sheng Qiuping, vice-minister of commerce, during a conference on May 15 in Beijing. China will continue to optimise the layout of tax refund stores, encourage various regions to set up such stores in major commercial complexes, shopping streets, tourist attractions, resorts, and other places where overseas tourists gather, according to a guideline issued by the Ministry of Commerce and five other departments in late April. The country has lowered the starting point for tax refunds from 500 yuan (S$90) to 200 yuan and doubled the limit for cash refunds from 10,000 yuan to 20,000 yuan. In addition, the country will relax the registration requirements for retailers to become tax refund stores, allowing newly opened shops that have been established for less than a year to apply to become tax refund shops, and the filing time has been shortened to within five working days, the guideline said. 'Tax refund stores are also encouraged to broaden product offerings to include time-honored brands, renowned Chinese consumer goods, smart devices, intangible cultural heritage items, crafts and specialty products,' Mr Sheng said. Globally, Japan has more than 60,000 stores that are available for tax refunds for overseas visitors, and South Korea has some 20,000 such stores. France, Germany and Italy each have over 10,000 such stores. The number of such stores in China is far from enough, the Ministry of Commerce said. In 2024, total expenditure of inbound tourists in China reached US$94.2 billion (S$122 billion), accounting for 0.5 per cent of China's GDP, which is lower than the proportions of one per cent to three per cent for major countries in the world, said the commerce ministry. 'Accelerating the promotion of the tax refund policy will help reduce shopping costs for overseas travelers and inject new impetus to boost consumption. This is an important measure for China to cope with external uncertainties,' Mr Sheng said. China has been opening its doors wider to international travellers. In 2024, the country expanded its unilateral visa-free policy to include 38 countries, allowing visits of up to 30 days, according to the National Immigration Administration. Multiple favourable policies have helped significantly boost inbound consumption. During the recent five-day May Day holiday, the country saw the number of inbound and outbound passenger trips of foreign visitors exceed 1.1 million, up 43.1 per cent year-on-year, said the National Immigration Administration. Shanghai, one of the cities with the highest concentration of foreign tourists, said inbound consumption has become an important lever for it to actively respond to the trade frictions between China and the United States, and promoting inbound consumption will help the city to build itself into an international consumption center. CHINA DAILY/ASIA NEWS NETWORK Join ST's Telegram channel and get the latest breaking news delivered to you.
CNBC
05-05-2025
- Business
- CNBC
China risks a spiral into deeper deflation as it diverts U.S.-bound exports to domestic market
As sky-high tariffs kill U.S. orders for Chinese goods, the country has been striving to help exporters divert sales to the domestic market — a move that threatens to drive the world's second-largest economy into deeper deflation. Local Chinese governments and major businesses have voiced support to help tariff-hit exporters redirect their products to the domestic market for sale. Tencent and Douyin, TikTok's sister app in China, are among the e-commerce giants promoting sales of these goods to Chinese consumers. Sheng Qiuping, vice commerce minister, in a statement last month described China's vast domestic market as a crucial buffer for exporters in weathering external shocks, urging local authorities to coordinate efforts in stabilizing exports and boosting consumption. "The side effect is a ferocious price war among Chinese firms," said Yingke Zhou, senior China economist at Barclays Bank. for instance, has pledged 200 billion yuan ($28 billion) to help exporters and has set up a dedicated section on its platform for goods originally intended for U.S. buyers, with discounts of up to 55%. An influx of discounted goods intended for the U.S. market would also erode companies' profitability, which in turn would weigh on employment, Zhou said. Uncertain job prospects and worries over income stability have already been contributing to weak consumer demand. After hovering just above zero in 2023 and 2024, the consumer price index slipped into negative territory, declining for two straight months in February and March. The producer price index fell for a 29th consecutive month in March, down 2.5% from a year earlier, to clock its steepest decline in four months. As the trade war knocks down export orders, deflation in China's wholesale prices will likely deepen to 2.8% in April, from 2.5% in March, according to a team of economists at Morgan Stanley. "We believe the tariff impact will be the most acute this quarter, as many exporters have halted their production and shipments to the U.S." For the full year, Shan Hui, chief China economist at Goldman Sachs, expects China's CPI to fall to 0%, from a 0.2% year-on-year growth in 2024, and PPI to decline by 1.6% from a 2.2% drop last year. "Prices will need to fall for domestic and other foreign buyers to help absorb the excess supply left behind by U.S. importers," Shan said, adding that manufacturing capacity may not adjust quickly to "sudden tariff increases," likely worsening the overcapacity issues in some industries. Goldman projects China's real gross domestic product to grow just 4.0% this year, even as Chinese authorities have set the growth target for 2025 at "around 5%." U.S. President Donald Trump ratcheted up tariffs on imported Chinese goods to 145% this year, the highest level in a century, prompting Beijing to retaliate with additional levies of 125%. Tariffs at such prohibitive levels have severely hit trade between the two countries. The concerted efforts from Beijing to help exporters offload goods impacted by U.S. tariffs may not be anything more than a stopgap measure, said Shen Meng, director at Beijing-based boutique investment bank Chanson & Co. The loss of access to the U.S. market has deepened strains on Chinese exporters, piling onto weak domestic demand, intensifying price wars, razor-thin margins, payment delays and high return rates. "For exporters that were able to charge higher prices from American consumers, selling in China's domestic market is merely a way to clear unsold inventory and ease short-term cash-flow pressure," Shen said: "There is little room for profits." The squeezed margins may force some exporting companies to close shop, while others might opt to operate at a loss, just to keep factories from sitting idle, Shen said. As more firms shut down or scale back operations, the fallout will spill into the labor market. Goldman Sachs' Shan estimates that 16 million jobs, over 2% of China's labor force, are involved in the production of U.S.-bound goods. The Trump administration last week ended the "de minimis" exemptions that had allowed Chinese e-commerce firms like Shein and Temu to ship low-value parcels into the U.S. without paying tariffs. "The removal of the de minimis rule and declining cashflow are pushing many small and medium-sized enterprises toward insolvency," said Wang Dan, China director at political risk consultancy firm Eurasia Group, warning that job losses are mounting in export-reliant regions. She estimates the urban unemployment rate to reach an average 5.7% this year, above the official 5.5% target, Wang said. Surging exports in the past few years have helped China offset the drag from a property slump that has hit investment and consumer spending, strained government finances and the banking sector. The property-sector ills, coupled with the prohibitive U.S. tariffs, mean "the economy is set to face two major drags simultaneously," Ting Lu, chief China economist at Nomura, said in a recent note, warning that the risk is a "worse-than-expected demand shock." Despite the mounting calls for more robust stimulus, many economists believe Beijing will likely wait to see concrete signs of economic deterioration before it exercises fiscal firepower. "Authorities do not view deflation as a crisis, instead, [they are] framing low prices as a buffer to support household savings during a period of economic transition," Eurasia Group's Wang said. When asked about the potential impact of increased competition within China's market, Peking University professor Justin Yifu Lin said Beijing can use fiscal, monetary and other targeted policies to boost purchasing power. "The challenge the U.S. faces is larger than China's," he told reporters on April 21 in Mandarin, translated by CNBC. Lin is dean of the Institute of New Structural Economics. He expects the current tariff situation would be resolved soon, but did not share a specific timeframe. While China retains production capabilities, Lin said it would take at least a year or two for the U.S. to reshore manufacturing, meaning American consumers would be hit by higher prices in the interim.
Epoch Times
01-05-2025
- Business
- Epoch Times
China Reduces Threshold for Tax Refunds for Foreign Tourists to Boost Consumption
The Chinese regime announced a lower minimum purchase amount on April 27 for tax refunds for foreign tourists and other measures to boost consumption amid a tariff war with the United States. Analysts are skeptical about their effect. China's Ministry of Commerce and five other departments issued the new policy, which lowered the threshold for tax refunds from 500 yuan ($69) to 200 yuan ($27.50). Foreign travelers who purchase tax-refundable items worth 200 yuan or more at the same eligible store on the same day are eligible to apply for what officials call the departure tax refund. At the same time, the limit for receiving the refund in cash was raised from 10,000 yuan ($1,375) to 20,000 yuan ($2,751), and there are no restrictions on refunds via bank transfer. The notice also included other measures to boost foreign tourist spending in China, such as expanding the coverage of tax refund shops and encouraging various regions to add tax refund shops in large shopping districts, pedestrian streets, tourist attractions, resorts, airports, passenger ports, hotels, and other such locations. Eligible travelers include foreigners or residents of Hong Kong, Macao, and Taiwan who have stayed in mainland China for no more than 183 consecutive days. Sheng Qiuping, the regime's vice minister of commerce, said at a press conference that last year, inbound consumption by overseas tourists accounted for about 0.5 percent of China's GDP, while the numbers in other major countries accounted for between 1 percent and 3 percent of GDP. Weak Local Consumption In recent years, China has been experiencing a trend of low consumption as Chinese shoppers are tightening their spending and choosing to buy cheaper products amid the sluggish economy. Related Stories 4/3/2025 1/21/2025 Beijing's social consumer goods retail sales in March were 104.9 billion yuan ($14.4 billion), a sharp drop of 9.9 percent compared with March last year, according to public data. In the first quarter, Beijing's consumer goods retail sales were 345.9 billion yuan ($47.57 billion), a decrease of 3.3 percent. Shanghai's retail sales of consumer goods in March were 128 billion yuan ($17.6 billion), a drop of 14.1 percent year-over-year. Retail sales in the first quarter fell slightly by 1.1 percent. The effect of the regime's measures on these trends will be negligible, U.S.-based economist Davy J. Wong told The Epoch Times on April 28. 'It may have a little effect in the short term, but the overall problem cannot be solved by such minor repairs. The downgrade in domestic consumption is caused by falling income, youth unemployment, and a decline in social confidence, and foreign tourists' consumption is a drop in the bucket.' An employee uses balloons to attract customers at a fashion retailer during a promotional sale at a shopping mall in Shenzhen, China's Guangdong Province, on Nov. 1, 2019. Andy Wong/AP Xu Zhen, a senior professional in China's capital market, told The Epoch Times on April 28, 'In 2024, 80 percent of overseas tourists [were] from Hong Kong, Macau, and Taiwan. The deterioration of China's economy has more or less impacted the economies of Hong Kong and Macau, and the spending power of these tourists is also limited.' He agreed that 'relying on the tax refund policy for overseas tourists to boost the economy is a drop in the bucket and is far from making up for the losses caused by consumption downgrades.' Wong added that the new measures are a contingency strategy to cope with the dual pressures of weak domestic demand and shrinking external demand, rather than a confident long-term open policy. 'On the surface, the measures seem to promote tourist shopping, but in essence, the regime hopes to use 'short-term, quick cash consumption' to offset the pressure of weak domestic economy and declining exports,' he said. The contribution of foreign tourist spending to China's GDP will be very limited, Wong said. 'China's security risks, visa reviews, and international image issues outweigh its shopping appeal, and lowering the tax refund threshold alone will not be enough to reverse the overall trend,' he said. 'What China really needs is to rebuild domestic consumer confidence and improve its external image, economic system, and rule of law, rather than just relying on tax rebates of a few hundred yuan to attract the world,' he said. Luo Ya and The Associated Press contributed to this report.
CNBC
28-04-2025
- Business
- CNBC
China rolls out employment support and hints at more stimulus as U.S. tensions escalate
BEIJING — Senior Chinese officials on Monday outlined plans to support jobs and help exporters, while hinting at the possibility of more stimulus in light of rising trade tensions with the U.S. In just a few weeks, tit-for-tat tariffs between the U.S. and China have more than doubled to over 100%, forcing Chinese factories to pause production and tell some workers to stay home. Exports have been a rare bright spot in China's economy, which has faced pressure from lackluster consumption and a real estate slump. "Labor market stability remains a critical concern for Chinese policymakers, given its direct linkage to social stability and consumption recovery," Goldman Sachs analysts said in a report Sunday. They estimate around 16 million jobs in China are involved in the production of goods exported to the U.S. Authorities on Monday acknowledged the impact of trade tensions on jobs at exporting companies. China has repeatedly emphasized that consumption is its priority for the year. But Monday's press conference focused more on efforts to stabilize employment. The briefing came after the human resources ministry on Friday announced subsidies for companies that hire recent graduates, but did not specify an amount. Officials speaking Monday spoke broadly about plans to promote entrepreneurship, increase vocational skills training and better distribute wages to workers in fields with "urgent" needs. China will provide financial support to exporters so they "will have more confidence to take orders," Sheng Qiuping, vice minister of commerce, told reporters in Mandarin, translated by CNBC. He pointed to recent measures, together with the National Development and Reform Commission economic planning agency, to help exporters sell products domestically and reduce operating costs such as rent. Sheng was speaking alongside senior officials from the economic planner, central bank and human resources ministry. On top of existing employment pressures, a record 12.22 million higher education graduates are entering China's job market this year, up by 430,000 from a year ago, according to official figures. China's urban jobless rate among those aged from 16 to 24, excluding students, stood at an elevated level of 16.5% in March, according to data from the National Bureau of Statistics. That marked a modest dip from 16.9% in the prior month. The overall unemployment rate for the working-age population in cities eased slightly to 5.2% in March from a two-year high of 5.4% in February. The People's Bank of China tends to cut rates when the labor market appears soft, Goldman Sachs analysts said, citing historical precedent. They predict that by the end of September, China will cut policy rates by 20 basis points, while enacting a 50 basis point cut for the reserve requirement ratio, or the amount of cash banks need to have on hand. Chinese officials' comments on Monday followed a high-level Politburo meeting on Friday that called for targeted measures to help businesses, and said the central bank would cut rates as needed. China is confident it can achieve its full-year growth target of around 5%, and will introduce incremental stimulus as the macroeconomic situation changes, Zhao Chenxin, deputy head of the the economic planning agency, told reporters. He emphasized that policies to boost consumption and establish a state-level tech development fund would be implemented by the end of June. Beijing has ramped up economic support since late September, but measures so far have not cumulated in the large-scale stimulus that many investors have hoped for. Gross domestic product grew by a better-than-expected 5.4% in the first quarter from a year ago. "We think policymakers are waiting on more clarity around the tariff impact before committing to more sweeping stimulus," Louise Loo, lead economist at Oxford Economics, said in a note Monday. Second-quarter gross domestic product "is very likely to decelerate substantially, as exports falter and more than offset the momentum behind stimulus-charged investments."
