Currently, passengers arriving from abroad, including Chinese nationals, have to quarantine for five days at a hotel, followed by three days at home.
The new rule significantly facilitates travel logistics for Chinese people returning home from trips abroad.
Chinese people, who until the pandemic made up a significant chunk of the world's tourist population, reportedly flooded travel sites on Tuesday. Many looked forward to crossing the borders after nearly three years of being cut off from the rest of the world.
However, travel agencies expected the return to pre-pandemic traffic to take time, at least a few months.
Why is scrapping quarantines big for tourism?
In 2019, China recorded the highest outbound tourism travel and expenditure worldwide, standing at $262.1 billion (€246.1 billion), according to German statistical website Statista.
However, the stringent Zero-COVID policy the country has followed to contain the deadly pandemic effectively prevented most Chinese people from leaving the country.
On Tuesday, many proceeded to book travel, with searches reportedly focused on trips to Macau, Hong Kong, Japan, Thailand and South Korea.
The country's National Immigration Administration also announced on Tuesday that it would resume processing passport applications, allowing Chinese nationals to travel abroad once more.
It would also approve visits of mainland residents to Hong Kong, it added.
Some airlines have already started considering whether to increase flights to and from China. Lufthansa said on Tuesday it was looking at adjusting its 18 flights a week to destinations in mainland China and Hong Kong.
Would tourism rebound be immediate?
However, the Reuters news agency has cited some tourism companies as saying a full return to pre-pandemic tourism rates was unlikely to happen straight away.
Reuters cited flight tracking app VariFlight as saying a healthy rate of flights to and from mainland China was not expected before May 2023.
Chinese officials have defended their decision to lift the travel quarantine.
"The Chinese government has always followed the principle of science-based and targeted measures,'' the AP news agency quoted Chinese Foreign Affairs Spokesman Wang Wenbin as saying.
He called for a "science-based response and coordinated approach'' to keep travel safe and "promote a steady and sound recovery of the world economy.''
What's the impact on global economy?
Apart from boosting tourism revenues, the move is also expected to allow most foreign visitors into China for the first time since the pandemic.
Travelers will only have to prove they have tested negative for COVID-19 before departing for China. They will not have to test on arrival.
The head of the EU Chamber of Commerce in China welcomed Beijing's plan to scrap entry quarantines in January as a "baby step" in the right direction for investors.
The chairman of the American Chamber of Commerce in China also welcomed was he said felt like China "finally… turn(ing) the corner." He expressed hopes that ending the travel quarantine would clear the way for resuming normal business travel.
The British Chamber of Commerce also hoped China would restart normal processing of business visas to allow "resumption of crucial people to people exchanges."
Business groups have recently warned of investments moving away from China, as the country's strict COVID restrictions blocked foreign executives out.