Slight respite from parallel traders in Hong Kong may not last

As customs cracks down on people who illegally ferry goods through checkpoints, veterans of the practice are waiting for the scrutiny to die down

PUBLISHED : Saturday, 29 September, 2012, 12:00am
UPDATED : Saturday, 29 September, 2012, 3:44am

For years, border checkpoints between Sheung Shui and Shenzhen have been a jammed, chaotic mess as thousands of parallel traders commute, with carts bulging with boxes and heavy bags, in a cat-and-mouse game with customs officers.

Complaints from Hong Kong residents have done little to ease the crush - until this month's crackdown by Hong Kong and Shenzhen authorities.

Those who live on the border and cross it were enjoying the calmer checkpoints and quicker trips last week.

"I never felt so relaxed and refreshed at the checkpoint as I did this evening," Angel Zhou, a sales manager with the Admission Scheme for Mainland Talents and Professionals, said on Monday.

"Usually, those people who appeared to be parallel-goods carriers had filled the hall during the evening," Zhou said. "Now, at least half of them seem to have disappeared and I only spent 20 minutes going through the checkpoints."

The crackdown, however, has done little to suppress the massive demand for Hong Kong goods that caused the boom in the first place. Many illegal traders continue to sneak items through, albeit at a higher risk. And many more are lurking just over the border, waiting for the scrutiny to die down.

Most people expect the traders to eventually return in force, carrying their loads of higher quality, lower taxed goods to the mainland. Each year, traders make an estimated 2.2 million crossings.

Not surprisingly, those traders still daring to cart goods through the checkpoint last week were not keen to talk to a reporter about their activities. But they could easily be overheard swapping stories about how they had evaded customs despite the crackdown.

"Thanks to the recent crackdowns of the Hong Kong government, Ying, Ping and Li can have a break and play mahjong at home," one middle-aged woman told another woman after leaving the Lo Wu checkpoint. "I also did not go to Hong Kong at the weekend. But no job, no food."

Another trader chimed in: "It's very risky these days. I see parallel-goods carriers caught each time when passing through the checkpoints. Just now, a customs officer asked me to stop, but I just behaved as if I hadn't noticed his call and strode away. Then, the officers captured the man behind me."

The man laughed loudly as he shared his method for making it through unscathed. "It's adventurous," he said. "The tactic is to go beside a parallel trader who is carrying goods more than you. Then he will become the obvious target."

As the risk of carrying goods across the border has risen, so have the traders' fees. They stock up on everything from infant milk formula to iPads, taking advantage of the lower prices and more plentiful choices in Hong Kong, then resell them at a profit on the mainland.

Parallel traders set different market prices for each category of goods, according to their difficulty to carry, conceal and get past the authorities.

Before the crackdown, traders kept HK$15 for transporting a case of Yakult, a fermented milk drink popular in Guangdong. Now, they get HK$20. A pack of cigarettes has increased to HK$4 from HK$3.

Similarly, the added pressure has caused traders to alter what goods they bring across.

"Now, buyers pay HK$130 or HK$140 for every 12 cans of infant milk formula," the male trader said. "But the formula is the most obvious target of the officers. Now, carrying Taipan Snowy mooncakes are the best deal. We should focus on mooncakes, since it's easy to carry one or two dozen each time and it's good excuse to say they are presents for family members and friends."

The traders are devising new methods to elude the customs officers. They work as teams, lock the checkpoint toilets and enter several times, offloading goods there. Those in their 40s and 50s carry infant milk formula and food. Women wear high-heeled shoes and sunglasses to carry Samsung and HTC phones across.

The traders have been accused of straining infrastructure and pushing up prices in the New Territories, but demand shows no sign of slowing down. The traders say the mainland market easily absorbs everything they can bring across.

"It's really a headache that the parallel traders I usually hire refused to work recently," said a woman who runs an online shop that sells food and other Hong Kong products.

"I already have over 100 orders across the country, as far as Xinjiang province."

Shenzhen's wealthier residents rely on regular shopping jaunts to Hong Kong for even everyday items, such as toothpaste, spending an estimated 20 billion yuan (HK$24.5 billion) annually at a time when the central government hopes to boost domestic consumption.

All signs indicate the fight against parallel traders won't last long. Maybe, the real enemy is not people who want Hong Kong's reliable, high-quality low-cost goods, but the mainland's domestic inflation, high consumer taxes and frequent scandals over tainted food and fake goods.