Rather than going overseas, China seeks to ensure its people shop for foreign luxury products within its own boundaries. For that, the government is proposing a new annual cap of RMB100,000 ($14,000) per person for tax-free shopping in the southernmost province of Hainan, China. Each year the popular tourist destination attracts more than 75 million tourists, mainly domestic. The new limit is over three times that of the current RMB 30,000 ($4,200).
The allowance rise and free port policy announcement followed the ‘Two Sessions’ annual plenaries of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference which ended last week. Among other aspects of the free port plan relevant to duty-free retailing include the plan to increase its number of tourists by making Hainan an international aviation hub; liberalizing air rights including fifth and seventh freedoms; and constructing a cruise tourism pilot zone.
The Chinese increased their share of the global $313 billion personal luxury goods market by as much as 35 per cent last year, according to consultancy firm Bain & Company. China was also responsible for increasing the personal luxury market in 2019 almost single-handedly.
