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 looks to stop abuse of multi-entry permit
Authorities promise to study ways of limiting number of trips made daily by mainlanders into the city under the multiple-entry scheme
Tony Cheung and Colleen Lee in Beijing
Shenzhen authorities will look at ways to limit mainlanders' trips to Hong Kong under the multiple-entry permit scheme amid allegations that it is being abused by parallel-goods traders.
A pro-government lawmaker said this yesterday after meeting officials in the neighbouring city.
But Gary Chan Hak-kan also said that the officials told him most of those who made multiple trips between the two cities in recent weeks were Hongkongers - including one who crossed the border 26 times in a day.
Chan was speaking after his visit to the border area with fellow members of the Democratic Alliance for the Betterment and Progress of Hong Kong and meeting Shenzhen customs chief Li Shuyu.
The lawmaker said Li had told him that the Shenzhen customs authorities, using a new system of random checks, estimated that 20,000 people - 60 per cent from Hong Kong - were engaged in the parallel-goods trade, buying goods in Hong Kong for sale in Shenzhen shops.
The Shenzhen government promised to study ways to prevent abuses of the multiple-entry scheme, he said.
Chan suggested that the number of trips made between the two cities could be limited to four a day, although Hong Kong officials have expressed doubts about the effectiveness of curbing such travel.
Citing mainland statistics, the lawmaker said that during last month's Lunar New Year holiday, about 300 people crossed the border at least four times a day, of which about 90 per cent were Hongkongers.
"In the most extreme case, a Hongkonger travelled across the border 26 times on a single day," he said.
Lawmaker Ann Chiang Lai-wan, who was also at the meeting, said cancelling the multiple-entry permit scheme was not an option because Hong Kong officials had already ruled it out.
Secretary for Security Lai Tung-kwok had said on Tuesday that as the scheme secured more than 100,000 jobs for people in Hong Kong, "it is not the ideal solution" to set a limit on the number of entries.
In Beijing, Hong Kong deputy to the National People's Congress Michael Tien Puk-sun proposed that the Hong Kong and central governments work together to import infant formula - a key target of the parallel-goods traders - directly from other countries and to sell it through designated outlets on the mainland. Tien said Hong Kong could help in certifying the imported milk powder.
Meanwhile, seven suspected mainland parallel-goods traders were yesterday arrested in Sheung Shui by police and Immigration Department officers.
Large amounts of baby food and diapers were seized.