Limiting mainland visitors counters Hong Kong's open doors policy

Shirley Yuen says discouraging mainland visitors constitutes trade protectionism and discrimination, which could damage Hong Kong's economy and its international standing

PUBLISHED : Tuesday, 29 July, 2014, 5:18pm
UPDATED : Wednesday, 30 July, 2014, 4:41am

Few places in the world are so confident and so well positioned for the future as to be able to seriously consider deliberately damaging nearly 5 per cent of the economy. Yet, that is what we face when we contemplate openly discriminating against certain tourists, specifically those coming here on the individual visit scheme.

The government has said it is considering public views on whether to lower traveller numbers amid concerns that the rapid influx of mainland visitors has exceeded the city's handling capacity.

It isn't in our nature to deny people access to our markets, and certainly it would be dangerous if others decided we were not welcome in theirs. The Hong Kong "brand" as a free port is special, and we should be enhancing rather than devaluing it.

Turning away visitors sends the wrong message, particularly to the international community. We should work to increase the draw of our real tourist attractions, so as to encourage more people to stay an extra day.

It is worth noting that the number of mainland visitors to Hong Kong during the Dragon Boat Festival in early June dropped 2.5 per cent, the first decline in five years and a reversal of the recent trend of 20 per cent rises. In four out of the first five months of this year, retail sales fell. This is the first prolonged slump in this sector in five years.

This time, however, the fault is partly our own. Once visitors turn away, it will take a long time to attract them back again. Therefore, any change in the individual visit scheme should be treated with the utmost caution.

Tourism is one of our pillar industries, supported by a dedicated tourism board. Closing our market to one particular segment is a form of trade protectionism, as well as discrimination. If we deliberately degrade our tourism sector, what will replace it?

If we no longer want these jobs, what kind of jobs do we want, and how much are we going to invest to create them? Do we really want to punish our most important trade and investment partner?

We are in danger of losing these customers to neighbours such as South Korea, Singapore and Malaysia where substantial investment is being made in tourism facilities, new visitor markets are being welcomed with open arms and large-scale marketing campaigns to attract tourists from the mainland are part of a broad strategy.

Southern Weekly recently ran a poll that found one-third of mainlanders surveyed did not want to visit Hong Kong and about 70 per cent had no plan to visit within a year. Of those who did not want to come, 25 per cent were afraid of discrimination.

Do we really want to implement restrictions that may be interpreted as a sign that Hong Kong harbours resentment against mainlanders? I think not.

The tens of millions of day trippers are here to buy products they can trust, at prices they like. For those simply seeking to avoid paying mainland taxes, the right solution is greater diligence on the part of mainland customs authorities. Similar arrangements should be in place for mail orders and courier items. These arrangements, however, would have to be pursued by mainland authorities.

Alternatively, shopping centres specifically catering to short-term visitors might be located closer to the border crossings, much as Lo Wu Commercial City caters to Hong Kong shoppers. But, things are not as clear cut as they might seem at first. Visitors are not only tourists who congregate in shopping areas. Many visitors are business people who also shop whilst they are in Hong Kong.

We need to balance the needs of tourists and residents, against the contribution of retail and tourism. For instance, in response to the rapid rise in individual visit scheme tourists, the retail market has invested in drug stores, fashion shops and jewellery stores to meet the demand for medicine, personal care products, baby formula products, cosmetics, clothing and jewellery. The competing demand for these products as well as the loss of other types of stores may have caused inconvenience to the daily lives of some Hong Kong residents.

But we should distinguish between mainland tourists and day-trippers, as the reasons for their visits and the impacts they have on local residents are quite different. The crowds on public transport and at boundary crossings, shortages and inflated prices of milk powder and other popular products, together with other social issues rooted in cultural differences and misunderstandings, have resulted in the adverse sentiments against mainland visitors.

The government should form a task force comprising representatives from the tourism industry, retailers, hoteliers, property developers, major-attraction operators and the MTR to devise strategies to promote and reinforce the traditional tourist-friendly attitude among our front-line service staff. As with so many kinds of discrimination, we need to educate the general public so as to ultimately reverse this harmful negative sentiment.

Before we make a major mistake, possibly killing off the most important counter-cyclical sector of our economy, we need to think very carefully. The government's role is to promote and protect market access, not restrict it.

As with all major policy decisions, the government should first conduct an in-depth economic impact assessment. Stakeholders need to be consulted, including those who feel they are harmed by tourism. Only then can we make an informed decision free of ugly, dangerous discrimination.

Shirley Yuen is CEO of the Hong Kong General Chamber of Commerce