Tourist tax refunds from the mainland can also help Hong Kong

[WORLD] The urgency for China to bolster domestic consumption as a key pillar of economic growth has intensified amid ongoing trade tensions with the United States.

Escalating tariffs on Chinese exports, a result of the prolonged trade dispute with Washington, have prompted Beijing to look inward for economic resilience. With global demand facing mounting uncertainties, boosting consumer activity at home has emerged as a critical strategy. This approach dovetails with China’s broader “dual circulation” framework, which seeks to fortify internal economic drivers while maintaining selective engagement with international markets.

While international tourists are not traditional domestic consumers, their presence represents a significant opportunity to stimulate spending on local goods and services.

China’s tourism sector has demonstrated notable resilience despite global economic pressures, with inbound travel bouncing back faster than expected in the post-pandemic landscape. In a bid to attract more foreign visitors, the government has introduced visa-free entry for several countries—an initiative that has already shown promising results. Industry observers believe that continued relaxation of travel restrictions and improvements to tourist infrastructure could further unlock the sector’s economic potential.

Despite a sharp increase in tourism revenues last year, spending by foreign visitors contributed just 0.5 per cent to China’s gross domestic product—a figure that lags behind the 1 to 3 per cent typically seen in advanced economies.

Experts attribute this relatively modest contribution to China’s broadly diversified economy but note substantial room for expansion. Nations like France and Spain, where tourism is a major economic driver, provide useful models for capitalizing on cultural heritage and strategic marketing to draw international spending. With its wealth of historical landmarks and natural beauty, China is well-positioned to attract a greater share of global tourism expenditure.

Furthermore, the widespread adoption of digital payment tools such as Alipay and WeChat Pay has simplified spending for foreign tourists, allowing for smoother transactions. When combined with targeted promotional campaigns in key markets, these technological advantages could help narrow the gap between China and leading global tourist destinations.