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.

NewsHong Kong
PARALLEL TRADING

Milk powder row triggers calls for review of visit scheme

It's time for a review, say lawmakers, with one suggesting an end to the multi-entry permits

Monday, 04 February, 2013, 12:00am

Lawmakers are calling for a review of the controversial individual visit scheme for mainlanders amid the row over cross-border trading of baby milk powder.

The scheme, introduced in 2003, allows mainlanders to travel to Hong Kong on their own rather than in a tour group.

Tourism Board chairman and Liberal Party lawmaker James Tien Pei-chun said he welcomed measures to clamp down on trading of the milk powder, but called for an end to the scheme's multi-entry permits. He said visitors from Shenzhen should be limited to a single entry per day.

"The government should examine both the benefits and drawbacks of the individual visit scheme. Since the mainland parallel traders mainly come from Guangdong, the government should offer a single-entry permit per day for Shenzhen people."

The planned amendment to the legislation will not exempt children … to avoid a situation in which they are exploited by parallel traders

But Legislator and former security secretary Regina Ip Lau Suk-yee said limiting mainlanders to a single-entry permit was not the way to go. "Offering a single-entry permit a day to mainlanders is not the best measure. Instead, the government should pass on the parallel traders' information to the mainland government for stricter regulation."

She called for a comprehensive review of the visitor scheme.

Andy Kwan Cheuk-chiu, an associate professor with Chinese University of Hong Kong, said the scheme had created jobs but did little for tourism. "The government created more than seven million jobs for low-skill workers from 2004 to 2010 under the individual scheme. But the tourism industry only accounts for 5 per cent of our GDP," Kwan said.

The government announced on Friday it would amend the import and export law to limit every person leaving Hong Kong to two cans, or 1.8kg, of milk formula. The measure is expected to take effect as soon as this month.

Children would not be exempted from that limit under the amended law, Secretary for Food and Health Dr Ko Wing-man told a television programme yesterday. "The planned amendment to the legislation will not exempt children … to avoid a situation in which they are exploited by parallel traders," Ko said.

More than 4,000 calls have been received by a 24-hour government hotline launched on Friday for parents to place orders for seven major milk formula brands. Some 2,300 callers were transferred to suppliers.

There was no trace of parallel traders at Sheung Shui MTR station yesterday afternoon - in sharp contrast to previous days, when a steady flow of mainlanders could be seen heading for the border, pushing trolleys laden with all sorts of goods.

And about 30 members of the North District Parallel Imports Concern Group protested at stations on the East Rail Line yesterday. At Tai Po Market station, they handed out leaflets and held banners reading "Restore Hong Kong, give me back the milk powder", and "One visa, one admission to kick parallel traders away". Spokesman Leung Kim-shing said: "The measures put forward by the government only focus on the shortage of milk formula. There's room for improvement for combating parallel-goods traders."

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This article is now closed to comments

crbfile
milk-powder is a simple logistics issue, how to get more into Hong Kong and then distribute it to stores. The Hong Kong media is disgusting for attacking innocent and defenseless mainlanders. also, I've been to those northernmost MTR stops and the LuoWu border. I beg anyone to find me 1 Hong Kong person ever delayed by the parallel traders? there are none. those traders are insignificant to the flow of traffic across the border.
btw, I'm a Caucasian USA citizen working in finance, and feel strongly that the Hong Kong media is totally disgusting on this milk powder issue.
Camel
HKners likely blame others for things going wrong than themselves.
Soon they will find out, that even with the restriction, that a non-local can only carry two cans of milk powder away from HK, the trade will going on and on. Honestly said, there is no shortage. It's the wholesaler and shops who are stocking big and keeping artificially the supply short to keep the demand and prices high.
likingming
It is actually the poor services of the monopolised MTR serving the session between SheungShui & LoWu (and most expensive session) that caused all these problems.
maecheung
The disagreement between Regina and James is a classic example of arrogance of Hong Kong lawmakers, and how stubborn they can be. Both ideas are workable and both should be implemented as the data shows 60% of smugglers (politely called parallel traders) are Hong Kong citizens. Work together folks to make a better living for HK!
likingming
Strictly speaking they are not smugglers yet until the law to ban export of milk powder is set.
Camel
Fact is that many parallel traders are local HKnese with a HKID.
lbwdtc@gmail.com
Actually it is,restriction should be added on not only the mainland travelers ,but also the HK local,especially some elder people.

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