Pilot to build top-tier shopping hubs

China will select some 15 cities for a pioneering two-year pilot 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 percent of the country's GDP, while the ratio in major world economies ranges from 1 to 3 percent, indicating significant untapped potential for inbound tourism consumption.

To this end, the Ministry of Finance and the Ministry of Commerce in late September rolled out a suite of measures designed 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, according to the guideline.

In 2021, Shanghai, Beijing, Tianjin and Chongqing, as well as Guangzhou in Guangdong province, were identified as the country's international consumption center cities.

Data released by the Ministry of Commerce showed that 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 percent 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 200 million yuan ($28.1 million) each, while other pilot cities will be allocated 100 million yuan 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 explicitly 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 macroeconomics 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 terminals that accept foreign bank cards in key areas, installing more currency exchange kiosks, and ensuring merchants maintain adequate cash reserves to facilitate transactions.

In a society that leapfrogged credit cards to embrace 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 a sweep of 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.

This truth is well understood by Wang Sisi, a Beijing-based tour guide with years of experience catering to foreign clients. For her, the official mention of 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. Their mandate is 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.

Meanwhile, a broader cohort of pilot cities is encouraged to leverage their unique cultural assets, specialty industries and regional characteristics to cultivate distinctive appeal, preventing homogenized development and creating a diverse portfolio of consumer experiences for international visitors, Xu added.

"This isn't a race where every city runs the same course," he said. "It's about building a national network where each node strengthens the whole. The leading cities pull the standard upward, while the pilot cities add depth and variety."

More importantly, 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.

"With China's per capita GDP exceeding $13,000 and urbanization rates surpassing 60 percent, consumer expectations are rapidly evolving," said Zhu Keli, founding director of the China Institute of New Economy.

The program enables pilot cities to benchmark against renowned global hubs, using this international standard as a mechanism to attract premium global brands and enterprises. This, in turn, acts as a catalyst for local industrial transformation and upgrading, creating a virtuous cycle of quality improvement, Zhu said.

"This is a dual-benefit scenario. Strengthening the construction of internationalized consumption environments can not only enhance China's global appeal but also improve the quality of life for the Chinese people," he said.

wangkeju@chinadaily.com.cn