Limits on Hong Kong visits to tackle parallel trading

HONG KONG

The Chinese province bordering Hong Kong has set a limit on the number of visits mainland residents can make to the territory, local media reported on Sunday, in a move designed to tackle parallel trading.

The Shenzhen government announced that residents are to be restricted to just one visit a week, the Hong Kong-based Sunday Morning Post reported.

A Hong Kong government source told the newspaper the restriction would cut the number of visitors to the city by 4.6 million a year - a 30 percent reduction in the number crossing from Shenzhen to Hong Kong.

The issue of parallel trading – whereby visitors buy tax-free goods in Hong Kong for resale on the mainland – has been a source of tension in the territory, with Hong Kong residents claiming the practice has inflated retail prices and caused a nuisance to locals. The traders say their business benefits the Hong Kong economy.

Shenzhen’s decision on Saturday will restrict the number of trips by multiple-entry permit holders to one a week. It was not clear when the change would be implemented.

The Hong Kong government said it had submitted a proposal to the central government in Beijing to adjust the multiple-entry policy, the Post reported.

Only Shenzhen permanent residents can hold multiple-entry permits, which allow them to make as many trips as they want to Hong Kong.

Around 14.9 million of the 60.8 million visitors to Hong Kong last year were from Shenzhen.

Trading at border towns has created friction and triggered protests and clashes in Hong Kong’s New Territories district.

Mainland visitors are blamed for buying up daily essentials such as infant formula and diapers and putting excessive pressure on public transport.

Some Shenzhen residents said they did not believe the restriction would resolve the problem of cross-border trading, with Hong Kong residents thought to be responsible for around 60 percent of the trade.

North District Parallel Imports Concern Group spokesman Leung Kam-shing told The Post he doubted the change would be effective. "Parallel-trading syndicates would just employ different people to do the job," he said.