• Sun
  • Aug 31, 2014
  • Updated: 5:02am
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TOURISM

Shenzhen mall to sell Hong Kong products to cut number of mainland visitors

Qianhai economic zone plans mall selling HK products to 'ease tourist pressure'; its success may rely on tax arrangement, says lawmaker

PUBLISHED : Wednesday, 25 June, 2014, 4:49am
UPDATED : Wednesday, 25 June, 2014, 9:21am
 

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A shopping centre selling Hong Kong products will be set up in Shenzhen's new economic zone of Qianhai by the end of this year in an effort to ease the pressure on Hong Kong from hordes of mainland shoppers.

The Qianhai Authority announced this yesterday amid demands from Hong Kong residents for the government to limit the number of mainland visitors to the city - a number that reached 40 million last year.

"We are studying whether visitors, especially those from Shenzhen and other Pearl River Delta places who purely want to go shopping in Hong Kong, could come to Qianhai instead," authority spokesman Wang Jinxia said. "It will be totally the same [as] shopping in Hong Kong."

Wang said this would help Hong Kong cope with the influx of mainland tourists, give opportunities to Hong Kong firms by connecting mainland buying power with their services and enhance the cooperation between Hong Kong and Shenzhen. "Our Hong Kong chief officer is in talks with a few local companies and we are striving to launch the centre by year's end," he said.

Although there are special tax and yuan exchange arrangements to encourage the development of a finance industry in Qianhai, Wang did not spell out the tax arrangements for the shopping mall.

Hong Kong legislator Felix Chung Kwok-pan said the attractiveness of the Qianhai centre to shoppers and its impact on local retailers would depend largely on tax. Besides the appreciation of the yuan against the Hong Kong dollar, the city's low or non-existent taxes were the main draw for mainland shoppers, he said. "On the mainland, there is a 17 per cent value-added tax and import taxes for imported goods. In Hong Kong, there are no import taxes on goods except tobacco, strong liquor and cosmetics." There is no sales tax in the city.

Only if there was a similar tax exemption in Qianhai would mainland tourists go there instead of Hong Kong, he said. In that event, local retailers could face stronger competition but residents would be happy about the city becoming less crowded.

Although Hong Kong companies are invited to participate in the plan, Chung said it would be easier for big chains than for small companies to join.

"It will be difficult for small and medium enterprises to learn about the legal system across the border," he said.

President of the Federation of Hong Kong Brands Chao Chen-kuo supported the idea of a Hong Kong mall in Qianhai, but said it would be important to assure the quality of goods and services.

"If there were only pharmacies selling daily necessities there, I would not be interested in going. It should be local brands that represent Hong Kong, not milk formula."

He suggested including catering and leisure facilities in the mall to showcase Hong Kong's service industries and ensure an all-round experience.

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This article is now closed to comments

michaelhctam@gmail.com
Without Mainland, Hong Kong economy will be in shambles. You're biting the hand that feeds.
534650eb-e2c4-4000-8be4-52b30a3209cb
if the mainlanders in other cities need to take time to travel to Shenzhen, why don't they cross the border to Hong Kong to shop, I don't think the new shopping mall can ease the crowd for HK.
53840679-0244-45ef-bfa7-350c0a320969
What about it helping to reduce parallel traders?
chinadailyhk
asd
superdx
And all it will take is for one shop to sell counterfeit goods and the hordes and swarms of poo-ing mainland shoppers will be right back to HK.
The problem is all on China's side. And not going to be fixed overnight. But we can limit entry today. We would be more than happy to open our doors again when they learn to behave.
draconianfederation
Which is next to never. Hong Kongers don't have the problem, defending our homes from an onslaught of poor excuse of people, who don't seem to respect the fact HK is our home first and foremost, is not Hong Kongers' problem. Go anywhere in the world, even in chi-na, people will naturally come out to defend their home when it's under attack by an outside force.
It's funny, Shanghai and Beijing suffers from similar problems as Hong Kong, in terms of the lokust horde, and they are demanding the same sort of things as Hong Kongers, but when we Hong Kongers demand for a stop in allowing unknown number of mainlanders in, these Shanghaiese and Beijingers are up in arms denouncing Hong Kong!
IF THIS IS NOT DOUBLE STANDARD, WHAT IS?
mvdvalk
So many HK Chinese made their home in Europe, USA, Canada and Australia in the 1960s and 70s. If people in those countries would share your opinions on "outsiders", HK Chinese would have been ostracised like you do the mainlanders. You clearly are a narrow minded racist... Not unlike many westerners who used to mock the immigrant Chinese from HK in the past. I pity your parents.
mh0908
Qianhai Cannot be a Special Economic Zone under Shenzhen. It will have to be a Very Special Economic Zone to succeed. Bureaucracy will have to be minimized to the Singapore level, all the tax rates will have to harmonized with Hong Kong's, all import duties, sales tax or VAT ail all have to be waived, goods from Hong Kong must be able to enter freely and not subject to current PRC import regulations and control, Hong Kongers must be allowed to drive to Qianhai by paying a reasonably priced road pass, cinemas must be allowed to play Hong Kong's version of movies, brokerages must be allowed to trade Hong Kong stocks and Qianhai banks must accept Hong Kong dollar settlements. If this VSEZ at Qianhai works, then Hengqin must be allowed to follow this very special model.
lamlm38
none of the mentioned items are doable in today's China.. forget about it :)
mh0908
Indeed as it will take another big leap in reform to accept a Qianhai which can operate like Liechtenstein with low corporate tax rate and simple company incorporation. Can Qianhai be a better tax haven than Hong Kong? The million dollar question!

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