China steps up plans for international consumption centres in multiple cities

CHINA. The Ministry of Commerce last week outlined its plans for the creation of multiple ‘international consumption centres’ in Chinese cities in which dedicated duty free zones may form part of the framework.

The plans were outlined at a Ministry of Commerce press conference hosted by Wang Bingnan, Member of the CPC Leadership Group of the Ministry of Commerce of PRC and Vice Minister.

The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China (26-29 October) made clear arrangements regarding the plan and the State Council has approved the first programme across five cities: Shanghai, Beijing, Guangzhou, Tianjin and Chongqing.

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Information technology and media company Baidu reported: “This work will help speed up the quality and upgrade of consumption, promote the formation of a strong domestic market, and unblock the domestic cycle; it will also help promote high-level opening to the outside world, promote the domestic and international dual circulation and have a significant effect on promoting high-quality economic development and building a new development pattern.”

In August, the Ministry of Commerce and related departments issued the ‘Overall Plan for Cultivating International Consumption Center Cities’, the report said, noting that the overall goal over five to ten years was to cultivate and build a number of international consumption centre cities with “global influence, competitiveness and reputation

Highlights of the key focus areas for the various cities include:

  • Shanghai: Creation of a global consumer destination underpinned by four major brands – Shanghai Service, Made in Shanghai, Shanghai Shopping and Shanghai Culture.
  • Beijing: Underlining the city’s status as the national capital, focusing on the creation of multiple consumer landmarks – ‘Capital Culture +’.
  • Guangzhou: A five-pillared plan to create an international consumer highland that draws consumers from all over the world to purchase Chinese and international goods.
  • Tianjin: In support of the Beijing-Tianjin-Hebei coordinated development strategy a project will take shape that faces Northeast Asia and radiates towards Russia.
  • Chongqing: A proposal to build the ‘Five Famous Cities’ platform is focused on international shopping, food, conventions and exhibitions, tourism, and culture, and promoting the cultivation of Chongqing products and characteristic service brands.

Picking up on the story, Hong Kong media South China Morning Post reported today that duty free shopping swill play a more prominent role in plans to boost China’s economy through increased domestic consumption.

“Both Beijing and Shanghai said last month they had already laid out plans to attract more international brands, increase the number of duty free shops, allow more categories of duty free goods and increase duty free shopping quota per consumer,” the title reported.

“When Chinese people travel overseas, our spending power on luxury brands is very potent,” Wu Liyun, a tourism professor at Beijing International Studies University told South China Morning Post. “The development of our own duty free shopping industry is based on the need to redirect the spate of overseas spending into domestic markets.”

Duty free shopping has long formed an integral element of China’s desire to maximise domestic consumption and repatriate overseas travel-related spending. The far-sighted Hainan offshore duty free shopping policy (enhanced in July 2020) is the prime case study to date. The expansion of airport arrivals duty free shopping from 2016 onwards marked another example and the introduction of a downtown duty free shopping model where Chinese travellers can shop before outbound travel is widely expected.

China Duty Free Group will open the world’s biggest duty free store in late 2022 in Haikou, Hainan province
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