SOUTH CHINA MORNING POST
The central government has introduced an 11 per cent tax rebate for overseas tourists on Hainan Island as part of its efforts to promote it as an international destination.
But one academic says that while the move may lure some foreign tourists away from Hong Kong, it will not be much of a challenge to the city’s status as a shopping hub.
The Ministry of Finance said on Monday that overseas tourists who spent at least 800 yuan (HK$939) in a single shop in designated malls on one day will be entitled to the rebate.
The announcement came a year after the central government unveiled a plan to transform the southernmost province into the “Hawaii of the East” by 2020.
Visitors from Taiwan, Hong Kong and Macau will also be eligible for the rebate on goods bought no more than 90 days before they depart.
The island province is the first mainland region to pilot the scheme.
“It is aimed at boosting overseas tourist arrivals and spending to build Hainan into an international tourist island,” said Lu Yong, vice-director of Hainan’s finance department.
Professor Niu Weiqun, a tax expert at Shanghai University, said the policy might lure some overseas shoppers from spending in Hong Kong in the short term but it would not provide the island with any long-term advantage over Hong Kong, where all consumer goods were duty free.
Niu did not think the policy would spread to other regions because Hainan was the only place fit to develop itself into an international tourist resort.
“If other mainland regions are given such preferential policies, Hainan will lose its margin, which runs against the central government’s goal to transform the island into an international tourist resort,” Niu said.
The rebate covers clothing, shoes, hats, cosmetics, watches, jewellery, electronics, stationery, sports goods, medical instruments and furniture. Food, drinks, fruit, tobacco, alcohol, motor vehicles and motor cycles are not included.
Lu did not give the number of eligible shopping malls but said some reputable malls were putting up Chinese and English signs advertising the rebate.
The central government is also considering allowing domestic tourists to shop at the island’s duty-free shops, which are now open to only overseas visitors.
Hainan received more than 23 million overnight tourists in the first 11 months of the year, up 11.6 per cent on the same period last year, according to the local statistics bureau. Mainlanders make up 96 per cent of the island’s tourists.
Meanwhile, tourism revenue surged 20.7 per cent year on year to 22.9 billion yuan.
To achieve its goal, Hainan added five more countries to its visa-free list in August, making tourist groups from 26 countries eligible for visa-free access for up to 15 days.
The island has seen a frenzy of construction this year, with developers scrambling to build lavish resorts, seaside villas, spas and shopping centres.
And then there are golf courses – plenty of them. By one local estimate, as many as 300 golf courses are being planned for the tropical island. Twenty-six are complete and 70 are under construction.
They include the Mission Hills resort, which will boast 10 courses and 162 holes spread over more than 15 square kilometres when it is finally finished.