CROSS-BORDER RELATIONS
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Parallel trading

Shopping mall over the border won't ease strain on Hong Kong

Experts believe parallel-goods traders will not be diverted from Hong Kong by project proposed for Shenzhen's special economic zone

PUBLISHED : Monday, 16 March, 2015, 3:37pm
UPDATED : Tuesday, 17 March, 2015, 3:12am

Plans for Shenzhen's special economic zone of Qianhai to set up a tariff-free shopping mall to relieve Hong Kong of some of its mainland day-trippers were met with doubts on Monday that the move would solve the issue of parallel-goods trading.

The Qianhai mall could be ready by the end of the year, selling foreign brands of baby formula and other everyday products from around the world that are much in demand by mainland shoppers.

During a visit to Hong Kong yesterday, Zhang Bei, the top official in charge of developing Qianhai, said the project would benefit both Hong Kong and Qianhai. "It would alleviate the pressure of mainland individual travellers on Hong Kong … and make it more convenient for those who work in Qianhai to shop."

Permission to exempt the mall from taxes would be needed before the plan could proceed, said Zhang. "It can be built quickly, but first we need approval from the central government."

If agreed, then Zhang aims to initially open a temporary mall to test the waters.

Last week, managing director of the Qianhai Authority's Hong Kong office Witman Hung invited Hong Kong retailers to participate in the proposed 200,000 sq ft outlet.

Hong Kong tourism sector lawmaker Yiu Si-wing said yesterday that Qianhai's shopping outlet would go some way in helping ease the number of mainland visitors descending on Hong Kong, but accessibility, prices and the variety of products on offer would be important factors.

However, Hong Kong's proximity and ease of access meant the city should build its own shopping malls at the border to cater for shoppers looking for everyday items.

One private project already underway near the Lok Ma Chau border crossing involves leasing out some 300 converted shipping containers to retailers. The temporary outlet, which can cater to about 30,000 shoppers a day, was expected to open in October, just before the National Day golden week holiday, said Yiu.

He said deterring parallel-goods traders from Hong Kong was a complex problem as many of the traders had long-established connections with shops in Sheung Shui and a transport network to take products from Lo Wu in the North District into distant mainland provinces.

"It's not only a matter of pricing, but logistics as well," Yiu said.

Economist Andy Kwan Cheuk-chiu said parallel traders might not dare source their goods in Qianhai as any tariff-free pilot scheme would be closely scrutinised by central authorities.

Meanwhile, cross-border tensions showed no sign of easing following the protests against mainland shoppers in the New Territories.

Photos showing about 20 mainlanders wearing sashes declaring in Chinese characters that they had not come to Hong Kong to shop went viral yesterday on Weibo, a microblog portal.

They were pictured retrieving their luggage at Chek Lap Kok airport, with the sashes clearly stating: "Hong Kong: I don't shop." One woman carried a Chinese national flag.

The blogger behind the posts, who did not say when the photos were taken, said the mainlanders were part of a business delegation in transit en route to France.