Parallel Traders in Hong Kong: Issues and Effects

“Give Us Tuen Mun Back”
Hong Kong, Feb 08, 2015
“Give us Tuen Mun back! Cancel the multiple-entry permit!” Hundreds of Hong Kong residents, wearing masks, gathering near Tuen Mun MTR station, chanted, echoing slogans written on the placards they were waving.

Then the protesters marched to the B3X bus station, which is the link of Tuen Mun town centre and Shenzhen Bay Border Crossing. Also, it is is known to be heavily used by parallel traders and visitors from mainland China.

“You locusts, go back to mainland China!” The protesters shouted and raised their middle fingers to the passengers on bus.

From the bus station, protesters walked to Yan Ching Street, an area full of pharmacies that primarily serve the parallel traders.

“Mainlanders go back to drink your own milk.”

“Down with Chinese communist party.”

One leader ranted, waving a huge flag and the rest protestors echoed. The shouts of hundreds of people ran through the narrow street.

The shops were forced to close and the policemen had to set up a blockade line to protect the store clerk.

“You are in breach of the law. You may be prosecuted,” the policemen raised a yellow warning flag and tried to advise them to leave. But they failed.

The protestors then moved to the nearby Tuen Mun Town Plaza. Half of the mall was taken over by the protesters. They pointed fingers at the mainland visitors and insulated them with foul language. Scuffles broke out. Chaotic scenes hit the mall.

Sooner, the entranceway was blocked up in case more protestors entered the mall. Batons were drawn and a red warning flag was raised. However, the protestors ignored the warning and continue clashed with the police. Finally, the police used pepper spray to put down the riot.

Injuries were sustained on both sides, including a police officer, who briefly fell unconscious. Thirteen locals, nine men and four women, aged 16 to 74, were arrested.

“Yes it was chaotic, but I think it was very successful as we really got our message out to the parallel traders,” said Andy Yung Wai-yib, holding a colonial-era flag. He was better known as “Captain America” during the 79-day Occupy sit-ins.

The Crazy Parallel Traders
Shenzhen, Dec 20, 2014

It was 4:50pm. Several uniformed customs officers were checking visitors with large luggages. Lin felt his breathing and heartbeat began to speed up. Subconsciously, he clenched the backpack straps and started pacing rapidly, eyes dancing to every corner. After walking out the border crossing, he lit a cigarette and smoked deeply.

At 8pm, Lin sat at the bench in the square of Shenzhen Bay Border Crossing, smoking and waiting for the his boss Dong.

Two bottles of Enfamil premium infant milk powder, five iPhone 5s, one Estee Lauder eye cream…After checking the goods, Dong paid Lin 700RMB. Deducting the transportation fee, Lin earned about 500RMB(about $76). For a 20-year old man who didn’t even graduate from high school, it’s a large income.

Two years ago, Lin occasionally saw an advertisement of parallel trading and then became a parallel trader.

As a parallel trader, Lin’s job is to purchase certain products in Hong Kong and then take them across the border to mainland China. Dong is a head of several traders and she is responsible for re-selling these products to other provinces.

The profits are decent due to the favorable exchange rate, the absence of taxes and tariff in Hong Kong. The biggest price differential tends to come with electronic products. For example, the price differential of iPhone 5s in mainland China and Hong Kong could be more than 1000RMB.

Lin can earn about 80RMB by shipping one iPhone 5s.

“Hiring parallel traders: Shenzhen residents, clean record.” Such advertisements are common online.

Since April 2009, Shenzhen residents can apply for the multiple entry visa which permits visa holders to cross the Hong Kong-Mainland border multiple times in one year. Also, the time cost of crossing the border is greatly reduced by the electronic crossing channel. As a result, people can cross the border many times even in one day.

With 2 years experiences, Lin has become a veteran parallel trader. Usually, he prefers backpack rather than large suitcase to carry the products. He commutes between Hong Kong and Shenzhen 3 or 4 times a day but only carry small quantities of goods each time so that he doesn’t need to pay the import duties even checked by the customs officers. He even take a baby’s photo with him to prove that the milk powder is for personal use.

However, the anti-parallel trading protests, first started at Sheung Shui in September 2012, led to a growing risk of parallel trading.

The new policy published on March 1st, 2013 stipulated that a visitor can only carry at most two bottles of milk powder and each visitor who carry large luggage has to be checked. From September 2012 to March 2015, 1999 parallel traders were arrested. Among them, 203 people were sentenced to imprisonment.

Every time when crossing the border, Lin feels like he is walking on a sling wire suspended between two cliffs.

“You Ruined Our Life”
Hong Kong, March 08, 2015

A four-year old girl was crying on the sidewalk. She looked at the people surrounding her with a fear. She did not know why they were quarreling with her mom. She did not know why they took her suitcase away and threw it on the ground. A man holding a camera shot her face directly. What she can do was hold her mom’s hand tightly and hide behind her.

“I’m not smuggling,” The mom shouted to the people around her with tears in her eyes .“I’m not a parallel trader.”

“How do you explain the staff in your suitcase? Can you promise that you are not gonna take something back to mainland China?” A woman doubted the mom.

“You are bulling us. We are all Chinese, how could you…”

“We are not Chinese,” several people interrupted the mom’s words immediately.

The mom hugged her teary daughter. The girl’s mouth opened widely and hoarse cries came from her throat.

“You compatriots are smugglers. Because of them, the price of goods are boosted and Hong Kongese don’t have enough supplements. You make our live became difficult. You ruined our life,” a man wearing a mask pointed the mom and yelled resentful. “If you are not a smuggler, then why you come Hong Kong.”

“My daughter is studying here,” the mom tried to explain.

“Studying here? Your daughter is scrambling education resources which belong to Hong Kong children!” The man’s said loudly over the sound of crying.

“Did you pay taxes? ”Another man shouted. “If you did, I apologize to you immediately! All Hong Kong people will apologize to you. But if you didn’t, what makes you think you can rob our resources? ”

We May Not Like You, But We Can’t Live Without You
Hong Kong, April 4, 2015

At 9am, I arrived at the Shenzhen Luohu Border Crossing. It was the fourth time I went to Hong Kong. “If all goes well, I can have lunch at 12pm,” I thought. Normally, it took me about 2 hours to cross the border since the people waiting for cross the border line from the Customs Entry and Exit Hall to the square in front of the hall.

However, what I didn’t expect was that I crossed the border within half an hour. Where are the people? It was so strange.

I don’t really like Hong Kong. I hate the feeling of rubbing against each other when walking on the narrow street. When shopping in the cosmetic stores, I can see nothing but people and can’t even turn round. The crowed people always give me a sense of oppression. However, whenever I think about the pineapple bread, barbecued pork fried rice, Jenny Bakery cookies…I can’t inhibit my urge of going to Hong Kong. But sharing table with strangers in the restaurant makes me annoyed. My elbow often touch others shoulder when drinking soup and I can’t stretch my legs in a relaxed position.

Standing on the street in Mong Kok, where is one of the most busy districts in Hong Kong, I couldn’t believe my eyes because it was so changed. There were still many people on the street but it can’t be compared with the past. At least you don’t need to worry about others may step on you.

Since it was early for lunch, I decided to buy medicine for my mom first.

“How much for this?” I showed the picture to the clerk.

“20HKD.”

It’s a decent price. “Can I pay by credit card?”

“Then you need to pay for the service fee if the sum of consumption lower than 200HKD.”

That’s not good. I knew some pharmacies do not charge the service fee.

“I can give you a discount. 18HKD. No, 15HKD,” the clark called me while I was leaving.

I turned round my face and looked at him, puzzled. I knew they rarely provide discount unless you buy large amount of goods.

“Business is tough. The visitors became fewer and fewer,” seems knowing I was confused, the clerk explained with a wry smile. “All because of those radical protestors. ”

Suddenly I understood why the price of the hotel was so cheap, only 150HKD. I booked the same hotel last year with a price of 560HKD.

“But don’t you think we grabbed yours resources?” I asked.

“Well,” he looked a little bit embarrassed. “I can hardly pay the rent now, so, you know…”

Sitting in the Cuihua restaurant, which is my favorite restaurant in Hong Kong, I was so happy that finally I can occupy a 4-people table by myself. Eating the Pineapple bread, I kept thinking about the last words the clerk said.

“We may not like you, but we can’t live without you. “

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