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.
Hong Kong government cracks down on cross-border parallel traders
Those who break HK immigration laws risk losing their entry permits, enforcement will be stepped up and Beijing is asked to take action
Parallel traders from the mainland risk having their entry permits cancelled if they breach Hong Kong's laws, Chief Secretary Carrie Lam Cheng Yuet-ngor said yesterday.
Lam said the city's government would ask Shenzhen authorities to cancel the permits if immigration laws were broken. She made the announcement after chairing a cross-departmental meeting to discuss the problem of thousands of traders who cross the border to buy goods in Hong Kong for resale.
Earlier in the day, Chief Executive Leung Chun-ying said he would seek help from Beijing to clamp down on the parallel traders, who have been the subject of protests in North District.
While buying goods in Hong Kong for sale across the border is not illegal in the city, the traders are breaching immigration laws by working in Hong Kong.
"For those mainland parallel traders who are successfully prosecuted by the [Immigration] Department, we will request our mainland immigration counterparts to have their permits to Hong Kong cancelled," Lam said.
Police would also step up enforcement against traders who obstruct streets, cause a nuisance or threaten public safety. They would also help the MTR Corporation implement its rules, including limits on the size of baggage carried by passengers, she said. The Sheung Shui MTR station, used by parallel traders to transport their wares, has been at the centre of the protests.
Leung said yesterday that parallel trading had severely affected the daily lives of people in North District and disturbed social order. Relevant departments had been instructed to investigate every detail of how parallel trading was conducted in the city and the government would enforce the law vigorously.
"I will make a request to the central government that it assist in combating traders from the Shenzhen side," he said.
Parallel traders, who profit by avoiding heavy import taxes imposed by the mainland, were back at work on Monday after their numbers dwindled amid protests at the weekend.
North District councillor Lau Kwok-fan said some 1,000 people gathered in an industrial zone around the Advanced Technology Centre in Sheung Shui every day. They were given goods to carry across the border, while a smaller number picked up products near Sheung Shui or Fanling MTR stations.
Others were assigned to buy products in the neighbourhood and they gathered in supermarkets and pharmacies.
Fellow councillor Law Sai-yan said most traders crossed the border between 3pm and 8pm, as they noticed that mainland customs officers on duty at that time were not as strict as those who worked the morning shift.
It was hard for local immigration officers to prosecute traders as most of the traders were paid for their efforts in Shenzhen, he said. It would be better to tip off mainland officers who could prosecute the traders for importing products without paying tax.