Advertisement
Advertisement
Hong Kong economy
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Hong Kong stands little to gain from reintroducing a multiple-entry visa for Shenzhen residents, economists have said. Photo: Xiaomei Chen

Resuming multiple-entry visas for Shenzhen residents will bring few economic benefits for Hong Kong: experts

  • Local authorities are in talks with counterparts across the border to bring back multiple-entry visa scheme for Shenzhen residents before Lunar New Year
  • Hong Kong reported slower-than-expected retail and tourism recovery following Covid-19 pandemic, as residents left in droves to travel abroad

The resumption of a multiple-entry visa scheme for Shenzhen residents will bring few positive benefits for Hong Kong’s economy given the latter’s weakened competitiveness and costly currency compared with the yuan, economists have said.

Local authorities are currently in talks with their counterparts across the border to bring back a multiple-entry visa scheme for Shenzhen residents before the Lunar New Year holiday, the Post has learned.

Hong Kong reported a slower-than-expected retail and tourism recovery following the Covid-19 pandemic, as the city’s residents left in droves during the holidays for destinations such as Japan and Shenzhen.

Hongkongers left in droves for destinations such as Shenzhen during major holidays last year. Photo: May Tse

Gary Ng Cheuk-yan, a senior economist with Natixis Corporate and Investment Bank, said that while the scheme’s return could increase the number of visitors, the boost to the economy and tourism revenue would remain limited.

“It does not solve the fundamental problems of Hong Kong’s weakening relative competitiveness in tourism and the generally lower per capita spending of mainland [Chinese] tourists,” he said.

An influx of mainland tourists, particularly in border towns such as Sheung Shui, caused tensions in previous years as residents complained of visitors crowding streets and bulk buying daily necessities to sell across the border.

The trend caused frequent protests and led to the Hong Kong government introducing a two-can limit on taking baby milk formula, one of the most sought-after items, out of the city in 2013.

Hong Kong security chief to review packed border crossings after festive fireworks

The multiple-entry visa scheme was introduced in 2009 to allow Shenzhen residents to make as many trips as they want to Hong Kong within a year. It was replaced by once-a-week visit permits in 2015 amid concerns about parallel trading and Hong Kong’s capacity to handle surges in single-day visitors.

Ng warned the scheme’s return could reignite old conflicts.

“If there are too many tourists with potential crowding effects on daily necessities, it will not be surprising to see discontent among residents,” he said. “However, the government should have learned a lesson in proper coordination to minimise the impact on locals. Hong Kong also has export control on essential daily necessities, such as milk powder, meaning the externalities from tourism will be less than before.”

Travellers arrive in Shenzhen after passing through Hong Kong’s Lo Wu control point. Photo: Edmond So

Lawmaker Starry Lee Wai-king, also the city’s sole delegate to the nation’s top legislative body, also recently made calls for authorities to raise the duty-free allowance for mainland visitors returning home to 30,000 yuan (US$4,200).

Tourists from across the border currently need to pay a tax of 13 to 50 per cent to the mainland government for purchases made in Hong Kong that exceed 5,000 yuan per trip, a measure introduced in 1996.

In comparison, Hainan province – a popular tropical travel destination for mainlanders – has a threshold of 100,000 yuan per year.

Hongkongers hunt for roast chicken, other bargains at US warehouse store in Shenzhen

But Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at the Chinese University of Hong Kong, said the crux of the city’s current retail woes lay in its pricey currency compared with the yuan.

“China’s economy remains weak,” he said. “The Hong Kong dollar is expensive compared with the yuan. I don’t think the new measures will help much. Even Hong Kong people go to Shenzhen to shop and eat.”

North district councillor Ng Yiu-cho said he did not think the resumption of the multiple-entry scheme would bring back a large number of parallel traders from across the border.

“I’m not very worried as the products on the mainland are very diverse and some of them are even better than those in Hong Kong,” he said, adding that the number of parallel traders had already plunged amid the pandemic.

Bulk buying megastores in Shenzhen may lure even more Hongkongers over border

Ng said resuming the scheme would benefit the city’s economy thanks to an inflow of tourists and that he would monitor the situation to help prevent any severe impact on the lives of residents in the district.

Shenzhen resident Zhuang Ying, 38, welcomed the resumption of the scheme, which she said would encourage her to visit Hong Kong more often and spend more.

The project manager in the gaming industry said she normally visited the city once a week and spent up to HK$1,000 (US$127) on dining and shopping. But she kept each visit to a day trip because of the high cost of hotels.

With multiple entries, she could do more daily trips to the city, Zhuang said.

“There are many places to visit and dine in Hong Kong,” she said. “The multi-entry scheme will make it more convenient for tourists to visit the city.”

14