• Wed
  • Sep 3, 2014
  • Updated: 5:02pm

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-GOODS TRADING

Two-tin milk rule 'a bad precedent' for Hong Kong

Officials defend cap on formula after Basic Law expert says it may result in legal challenges

PUBLISHED : Wednesday, 06 March, 2013, 12:00am
UPDATED : Wednesday, 06 March, 2013, 4:37am

Hong Kong officials have defended the new two-tin restriction on infant formula exports against criticism by a Basic Law expert in Beijing who said the curb was "inconsistent" with the mini-constitution.

Basic Law Institute chairman Alan Hoo said the restriction on travellers out of Hong Kong might face legal challenges.

"This practice curbs Hongkongers' freedom to bring goods into and out of the city, which is protected by Article 115 of the Basic Law," Hoo said, on the sidelines of the Chinese People's Political Consultative Conference (CPPCC) in Beijing.

This practice curbs Hongkongers' freedom to bring goods into and out of the city, which is protected by Article 115 of the Basic Law

"This is a bad precedent. This is not only inconsistent with Article 115, but also threatens the reputation of Hong Kong as a free market."

But both Secretary for Food and Health Dr Ko Wing-man and Secretary for Security Lai Tung-kwok, responding to the criticism from Hong Kong, said the limit - imposed on Friday - was the only way to curb rampant parallel trading in the scarce commodity.

"We are being forced to put the restriction into practice as there is no alternative," Ko said. "The only reason we have implemented the new law is to guarantee a sufficient supply of infant formula for local parents."

Lai said the restriction was not aimed at any particular people and rejected suggestions that it was a half-baked solution that lacked thorough consideration.

He also said that cancelling the multiple-entry permit scheme for mainland travellers - blamed by some for encouraging the traders - was not the answer.

Under the new rules, passengers over the age of 16 can take two tins, or 1.8kg, of infant milk formula out of Hong Kong on their first trip out of the city in 24 hours. By yesterday, at least 87 people had been arrested for exceeding the limit, of whom 60 per cent were Hongkongers and others mainlanders. They face a maximum penality of a HK$500,000 fine and up to two years in jail.

Several deputies and delegates in Beijing for the annual meetings of the National People's Congress and the CPPCC criticised the change and said the penalties were too harsh.

Hong Kong delegate Henry Tang Ying-yen, former chief secretary and failed chief executive candidate, said he hoped it was a temporary move.

"I hope it won't stir up conflict between Hong Kong people and mainlanders," he said.

Tang said Hongkongers should be tolerant of mainlanders coming to the city to shop.

 

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This article is now closed to comments

layleng
Protecting our infants is the right thing to do. Mainland NPC deputies are offended that we have put Hong Kong babies before mainland babies but who gives a rat's **** about what they think? Frankly, if there are Hong Kong babies at risk, who gives a rat's **** about mainland babies? If these mainland NPC deputies are so concerned about their babies, they should straighten up their own food industry, jail those food tycoons who have profited illegally and stop harassing the activists fighting for those who have been harmed. As for the likes of Hong Kongers like Alan Hoo and Johnny Mok, it's just disingenuous nonsense to misuse abstractions like free trade and medical tourism to further advocate blighted short-sighted policies. We should take care of our own before we cater to the rest of the world, the rest of Asia or even the mainland.
boondeiyan
There is nothing to explain here. You are muddling the issue. Cigarettes are taxed in HK, and at a different rate than in the mainland. Restricting the avoidance or arbitrage of tax payments is a well-precedented policy in many jurisdictions around the world. The other items you mention represent potential public health risks when imported; again there is ample precedent for controlling such risks. Milk powder is not taxed in HK and the demand for it is exactly because alternatives sold in China are believed by some to pose a health risk. There is no equivalence to the items you cite.
likingming
hong kong milk powder for the hongkonger.
hong kong land for hongkonger
hong kong for hongkonger.
CY, when would you have the guts to declare hong kong independence?
SpeakFreely
According to news, government hotline only getting less than 20 calls a day, if that's true, what kind of shortage do we have? Why parents are not using it if they cant get the powder? my position is as long as locals getting adequate supplies, by either hotline or Internet purchase (very common in overseas) there should be no issue of supplies and no need to use a new law to enforce this milk powder trading as it is not efficient at all, costing a lot of resource at the border.
mrgoodkat
There are already limits imposed on certain goods being brought in and out of Hong Kong. Why should it be against the Basic Law just because it's milk powder.
There are limits on cigarettes, meat, poultry, live animals, fruits etc. So why not milk powder? Maybe Mr. Hoo would kindly explain that.
ssslmcs01
Opposite, in this case the administration set a good precedent for Hong Kong. But there is still lots of work to do.
 
 
 
 
 

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