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.
Leung to urge Beijing to help stem tide of parallel traders
Chief Executive Leung Chun-ying will ask Beijing to help combat the flood of traders crossing the border from Shenzhen every day, he said on Tuesday.
“Different [Hong Kong] government departments have started combating the activities. I will ask the central government to help combat them from the Shenzhen side,” he said before attending an Executive Council meeting.
Parallel trading has severely affected the daily lives of North District residents and disturbed the social order, Leung said. Relevant government departments have been told to investigate every detail of how parallel trading is conducted in the city, and the government will enforce the law vigorously, he added.
Leung made the comment after hundreds of Sheung Shui residents at the weekend protested against parallel traders outside the district’s MTR station. They criticised the traders for blocking roads, posing safety threats to passers-by and inflating the prices of retail goods.
According to a government source, more than 3,000 traders are believed to engage in the activity every day, half of whom are Shenzhen residents who make trips back and forth several times a day.
Parallel traders make a profit by buying products in Hong Kong and carrying them back to the mainland without paying import taxes. Under mainland law, taxes must be paid on 22 types of goods, including iPhones and wines, that are brought across the border into Shenzhen.