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  • Jul 23, 2014
  • Updated: 3:44am

Parallel trading

The influx of parallel traders who buy their stock tax-free in Hong Kong to resell it in mainland China at a profit is causing growing unrest. Residents of Sheung Shui, a town close to China's border, say the increase in parallel importers has pushed up retail prices and causes a general nuisance. Importers argue that their trade benefits the Hong Kong economy.

CommentLetters

We can learn from Singapore's tight controls on border trade

PUBLISHED : Thursday, 27 September, 2012, 12:00am
UPDATED : Thursday, 27 September, 2012, 12:28am

There is currently a great deal of discussion in Hong Kong about cross-border [parallel] traders.

I am a Singaporean presently based in Hong Kong. Having lived in several places in the Asia-Pacific region, I must say I love Hong Kong very much in terms of its infrastructure, roads and transportation, but no city in the world is perfect.

Having regard to these traders and having had some experiences with bureaucracy in the past, I would say that Singapore also experienced similar problems with regard to neighbouring and poorer Johore, in Malaysia. Singapore tackled this problem in a number of ways.

It had compulsory registration of all individual traders. This move can distinguish traders from other individuals and tourists who need to cross the border. This distinction is important, as any trading activity in a country has to be registered and subject to taxes where applicable.

It is also important for businesses to be properly registered regardless of whether they are trading as a company, in a partnership or as a sole proprietor. If the Hong Kong government adopted this policy, it could better monitor and manage the situation and, where necessary, draw up a blacklist.

A quota for items imported and exported is important.

In Singapore, for example, more than three packets of cigarettes on an individual is considered not for individual consumption but for trade and is therefore taxable. I do not know what the import taxes are on goods in Hong Kong but clearly large packages are for trade and can help to distinguish traders from individuals.

Hong Kong can restrict hours for movement of goods. I have seen this operate in Thailand, Singapore and Malaysia. At peak hours there will be no traders allowed at border-crossing points. The hours allowed can be varied and this can operate in tandem with registration rules.

Restricting crossing, and having a special zone for clearance, is already practised.

In some areas with very heavy traffic, such as the Sheung Shui crossing, separate buildings can be designated just for the purpose of clearing traders' vehicles.

I feel that the present police inspection of individuals is time consuming and a waste of manpower, and might lead to harassment of genuine individuals who need to cross the border.

I hope my suggestions, if adopted, could lead to a better and more efficient system.

Mark Han, Central

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