Parallel trading in Hong Kong

Parallel trading in Hong Kong refers to the phenomenon of China parallel traders taking advantage of multiple entry visa policy to import goods from Hong Kong to Mainland China, causing shortage of household goods in various locations starting in the North District and expanding to Tuen Mun, Yuen Long, Tai Po and Shatin. Problems relating to this include increased congestion from the millions of day traders, overloading of infrastructure and disruption of the everyday lives of residents in northern districts of Hong Kong.

Demand of significant volumes of daily necessities favoured by Shenzhen residents has progressively squeezed out those catering to local needs, and caused rent inflation and shortage of certain goods such as infant formula.

Visitors from mainland China have risen from 2.3 million in 1997, to nearly 41 million in 2012 and 53 million in 2013. Since 2012, the problem of parallel trading in Hong Kong became more serious. Media reported that 95% of multi-entrance travellers were China parallel traders. The Shenzhen customs department reported in 2015 that of 33,000 arrests made for trafficking parallel goods across the border since 2010, 80 percent were Hong Kong residents.Zhang Xiaoming, Director of the CGLO in Hong Kong, was satisfied overall with the implementation of the Individual Visit Scheme, and said the problem of parallel trading should not be exaggerated for political reasons. Zhang asserted that 60 percent of parallel traders were Hong Kong residents, and Shenzhen residents on multiple-entry permits accounted for the remainder.

Through multi-entrancing within a day, separating goods into small boxes, exchanging goods in and out between the gates of the MTR station exporting goods to China, parallel traders earn 'transporting charges' by claiming themselves as travellers and their products are for self-use, saving the cost of tax. Traders mainly gather in Sheung Shui Station Exit C and the platform as trading centres to pass on goods to buyers in China. They linger thus causing serious blockage and crowding in the station. Targeting the problem, MTR hired hundreds of staff, erected barriers and gates in attempt to control the situation.

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