China to start interim measures regulating downtown duty-free stores

China will implement interim measures to regulate downtown duty-free stores starting October 1, aiming to promote orderly development and efficient management of these retail outlets, which sell duty-free goods to travelers departing from city limits.

The new regulations define downtown duty-free stores as those approved by the State Council to operate within city areas and sell duty-free goods to travelers set to leave the country within 60 days.

Pickup points for these purchases must be located within departure zones at border checkpoints, and travelers must collect and carry their purchases out of the country on one trip, with no storage allowed for re-entry pickup.

Eligible shoppers need valid travel documents and departure tickets, and purchases must be made in stores located in the city of departure.

The stores are permitted to sell a wide range of items, including food, clothing, electronics, and beauty products, all exempt from duties and taxes.

While there are no spending limits, purchases must adhere to customs rules on personal use quantities, and any items brought back into the country will be subject to import duties.

Downtown duty-free stores will operate under a state-licensed model, paying special fees, and their locations and numbers will be centrally planned based on factors such as traveler flow and urban development.

The measures encourage the promotion of domestic goods, especially those with traditional cultural significance.

Local governments are responsible for facilitating duty-free pickup points, and store operators will be selected through competitive processes.

Agreements with operators will typically range from five to 10 years, with oversight from multiple government departments.

Breaches of regulations or failure to meet operational standards could result in store closures and penalties for the cities involved.

These measures aim to improve the shopping experience for departing travelers while ensuring strict compliance with regulatory standards.

The six existing downtown duty-free stores operated by the China Duty Free Group in Beijing, Shanghai, Qingdao, Dalian, Xiamen, and Sanya will adhere to these measures.

Additionally, 12 foreign currency duty-free stores operated by the China National Service Corporation for Chinese Personnel Working Abroad, located in cities including Beijing, Shanghai, Qingdao and others; and a store in Harbin run by the China CTS Asset Management Corporation; will have three months to transition to downtown duty-free stores.

After inspection by customs, these stores will commence operations under the new regulations. Stores failing to complete the transition within this timeframe will be closed.

New downtown duty-free stores will also be established in eight cities — Guangzhou, Chengdu, Shenzhen, Tianjin, Wuhan, Xi'an, Changsha, and Fuzhou. These stores will also follow the interim measures.