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.
Shenzhen sets limits for frequent Hong Kong visitors
Shenzhen authorities have introduced restrictions of their own in a bid to stem the flow of goods from Hong Kong being carried over the border to be resold.
Visitors who frequently cross the border are now barred from carrying anything other than "essential" items on any trip in the 15 days after they first enter Hong Kong under a new measure that came into force this month, according to the customs department here.
Mainland visitors can carry up to 5,000 yuan (HK$6,200) worth of goods tax-free on their first trip over the border. That cap previously applied to every border crossing.
Customs and Excise commissioner Clement Cheung Wan-ching on Wednesday described it as a "very targeted and powerful" measure.
The department was also preparing for a planned two-tin, or 1.8kg, baby milk powder restriction for any person leaving Hong Kong. The proposal to amend the import and export law, announced last Friday, was expected to get Executive Council approval later this month.
Cheung said visitors crossing the border would be under close scrutiny: "I do not exclude the possibility of parallel trader groups attempting to test our [enforcement] capacity at the start of the measure.
"I do not believe it is going to be a very difficult job, because … enforcement of the Import and Export Ordinance is a statute law which is well-established."
The move came amid an escalating row over parallel-goods traders stockpiling milk powder to resell on the mainland, leading to shortages of the product here.
But the parallel-goods trading has continued since last week's announcement. Some 91 cases, involving 53 mainlanders and 38 Hongkongers, have been reported by local customs officers to their mainland counterparts since last Friday, said Richard Yu Koon-hing, assistant boundary and ports commander with customs. Those cases included a car packed with 72 tins of the milk powder and a traveller with 40 tins stuffed in a backpack and baby stroller, Yu said.
The information was immediately given to Shenzhen authorities for tax or smuggling investigations, he said. And some 3,760 smuggling suspects were handed over in this short period, he said, citing mainland figures. The Immigration Department said yesterday that about 600 mainlanders were blocked from entering the city on suspicion of being involved in parallel-goods trading.
Cheung reiterated the department's determination to enforce the restriction once it's in place. There would be no exceptions for those carrying excess tins, as "the law is the law - and we are a law enforcement agency", he said. Anyone trying to cross the border with more than two tins of infant milk formula could be fined, or even jailed, he said.