Border Madness!

October 27, 2012 — Leave a comment

Mainland Chinese visitors line up and wait for check in outside Hong Kong’s Sheung Shui train station with packages of diapers to be parallel imported into Shenzhen for resale.

While communist China bears the brunt of criticism for its exportation of low cost and in many cases inferior products to the rest of the world, the following article suggests one should spare a thought for the Chinese citizens themselves given what they have to put up with from the authorities between Hong Kong and Shenzhen.

The recent hard crackdown on smugglers and couriers across the boundary between Hong Kong and Shenzhen has cut deeply into the business of parallel trading on both sides of the border, and thus far, appears to have reduced the nuisance problem caused to residents of the northern New Territory. However, with the crackdown on-going and the Mass Transit Railway Corporation (MTR) adding further pressure by restricting the dimensions and weight of passenger luggage going across the border, complaints have started buzzing, that the move may have frightened away the passenger couriers, but not the syndicates coordinating them behind the scenes.

Effective 9 October 2012, the Mass Transit Railway Corporation (MTR) imposed a maximum weight limitation of 32 kilograms or 130 centimetres in length for passenger luggage on the East Rail Line, under a three-month trial scheme. Could you just imagine this at an African border crossing? Passengers are allowed only one piece of baggage. All their small parcels and suitcases are required to be bundled up into a single “package,” all part of the bid to curb the passenger-couriers whose clamouring and crowding had become a serious issue for neighbours of MTR in New Territories.

The restrictions were seen as MTR’s contribution to the collaborative effort that involved governments on both sides of the border, to cut down on so-called parallel traders and smugglers. MTR’s new rule has, in general, earned praise from residents of northern New Territory because the nuisance problem caused by the traders/smugglers has been alleviated. However, for residents of Shenzhen, who travel back and forth every day, or residents of `other parts of the mainland who come to Hong Kong for shopping, the size and weight limitations seem be “unnecessary” and “troublesome”.

“I was often asked to buy things in Hong Kong on my way home: cooking oil, rice, baby formula, tissues, etc. I really don’t have time to care about how heavy they are or how long they are,” said Go, a resident of Shenzhen. He Hua, also a Shenzhen resident living in Luohu district who comes to Hong Kong to go shopping two to three times a month, also doesn’t like the new limitation. “I came to Hong Kong regularly to buy things for myself and my family. I paid my money and followed regulations of the Customs, why should I worry about my weight and length? If the goods are all legal, why can’t I take them on the train at one time?” said Hua, who had carried six cans of baby formula with her, which she claimed were for her elder sister’s baby.

Recently, there has been a strengthened effort to combat parallel trade, with a collaborative effort between the Customs and Excise Department of the SAR and the Shenzhen Anti-Smuggling Bureau. The action uncovered 120 cases of parallel trading and made 123 arrests, with the unpaid taxation of the confiscated goods amounting to one million yuan. On the other side of the border, business associated with cross boundary goods was also affected. In North Huaqiang district in Shenzhen, which had been long recognized as the “centre of parallel trading” of “grey goods” from Hong Kong, business has shrunken since the crackdown.

A shop owner in North Huangqian area told China Daily that he had expected to make a huge profit by selling iPhone 5, the latest release by Apple Corporation. It never happened, because his Hong Kong supplier informed him that it was too difficult and that it was risky to get the iPhone 5 across the border. And the seller couldn’t get the supply he had counted on.

“The whole business chain of parallel trading depends on the ‘suppliers’ to smuggle goods from Hong Kong to Shenzhen, especially electronic goods. Now the suppliers have trouble getting through the border, (so) we have trouble getting the goods,” said the anonymous shop owner. Because of serious supply shortage, the price of “grey goods” has soared significantly on the mainland side of the border. The best example was iPhone, which sold originally at HK$5,688 (US$733.8) at the Apple Store in Hong Kong, but was priced at 8,000 yuan (US$1276.5) at the anonymous shop owner’s store. Insiders of the courier industry also told China Daily that the price for smuggling goods across the border with “ant house-moving” tactics had increased from 22 yuan per kilogram to a record high of 50 yuan per kilogram.

The business of stores that sell Hong Kong goods in Shenzhen has picked up since the crackdown, as people who live along the border in Shenzhen choose to buy daily-use goods in local stores – like cooking oil, rice and baby formula, instead of going to Hong Kong by themselves. “We have adequate Hong Kong goods, don’t worry; they are all fresh and delivered to us fresh every day,” said the owner of a store selling Hong Kong goods in Shatoujiao, or Sha Tau Kok in Cantonese, in eastern Shenzhen. The store owner refused to answer how he managed to get “adequate supply” from Hong Kong every day.

The crackdown on smugglers, especially the MTR weight limitation, had stopped individual couriers; however, it didn’t shut down the syndicates coordinating behind the scenes. What’s more, there are some 157 online stores that sold Hong Kong goods on Taobao, the biggest online shopping market in the mainland. The record on the website showed that one of the big shops had sold out 1,357 pieces of Hong Kong goods in the past week, 90 percent of which are daily use goods and food. Source: The China Daily

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