Domestic duty-free boost on the way

Updated: 2016-02-23 08:03

By Meng Jing and Zhong Nan(China Daily)

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China is to open 19 duty-free shops for domestic consumers, a move aimed at catering to the increasingly sophisticated demand among these shoppers for overseas products.

The decision on the new shops was taken by the State Council on Thursday, the Ministry of Finance said on Monday. They will be located at 13 airports, including Guangzhou Baiyun, Hangzhou Xiaoshan and Qingdao Liuting, and six ports in Shenzhen and Zhuhai in Guangdong province and also in Heihe, Heilongjiang province.

Passengers will be allowed to carry duty-free goods worth up to 8,000 yuan ($1,230), an increase on the previous limit of 5,000 yuan, the ministry said. The new shops are expected to offer a wider selection of overseas products so that Chinese outbound travelers can make purchases after they arrive at airports or ports.

According to the Fortune Character Group, a Beijing-based luxury market consultancy, Chinese consumers spent 1.2 trillion yuan a broad last year on purchases ranging from big ticket luxury items to daily necessities.

The increased demand for high-quality products, convenient traveling conditions and appreciation of the yuan were some of the main reasons spurring Chinese to buy more foreign products in online stores and brick-and-mortar stores overseas.

According to the Ministry of Commerce, Chinese consumption power overseas grew on average by 27.8 percent annually between 2005 and 2015, doubling such power in the domestic market.

Retail sales of consumer goods in China reached 30.1 trillion yuan last year, a year-on-year rise of 10.7 percent and 0.2 percentage points higher than in the first three quarters, according to this ministry.

Li Jian, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, the Ministry of Commerce think tank, said policymakers should consider lowering or even eliminating consumption tax on some popular consumer goods in other parts of the country.

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