Hong Kong representatives to the country’s top political advisory body want mainland Chinese visitors to enjoy duty-free shopping of up to 30,000 yuan (US$4,165) instead of the current 5,000 yuan, a limit which has not changed in almost three decades.
Henry Tang Ying-yen, a Standing Committee member of the Chinese People’s Political Consultative Conference (CPPCC), told the Post the move was a key change in a joint proposal he initiated and which would be put forward by most of the city’s representatives in Beijing next week.
He said a more generous tax incentive would boost tourism and improve Hong Kong’s attractiveness to mainland spenders who had been flocking to Hainan, an island province off the country’s southern coast, for duty-free shopping.
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A higher tax-free shopping limit would also complement proposals such as those to reinstate the multiple-visa scheme for people living in Shenzhen and increase the number of mainland cities whose residents may visit Hong Kong as individuals rather than in tour groups.
“The central government’s policy stipulates Hong Kong’s greater integration with the mainland, but it does not make sense not to allow more mainland people to visit the city,” said Tang, who is the chairman of the West Kowloon Cultural District Authority and the city’s former No 2 official.
While there were restrictions on mainlanders visiting Hong Kong, he pointed out that they could stay in Singapore for 30 days without a visa.
Hong Kong has about 200 representatives to the CPPCC and Tang said he had secured the support of about two-thirds of them to submit the joint proposal next week.
The CPPCC meeting starting on Monday is one of two annual parliamentary gatherings in Beijing referred to as the “two sessions”. The other is the National People’s Congress meeting, which opens on Tuesday.
Hong Kong’s tourism sector, which was hit hard by three years of harsh Covid-19 travel restrictions, has not recovered quickly as the city’s government hoped after pandemic measures were lifted a year ago.
The 34 million visitors last year represent just over half the record 65 million who came in 2018, and they spent differently than before, splurging less on shopping and preferring to experience the city instead. Mainlanders made up most of the visitors.
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Tang said the tax-free shopping limit of 5,000 yuan per mainland visitor for consumer goods such as cosmetics, electronic products, wine and spirits, handbags and watches had remained unchanged since 1996.
Mainlanders had more money to spend than before, as China’s average annual per capita disposable income of households jumped 14-fold since 1996 to 39,200 yuan last year.
“The 5,000 yuan tax free limit is no longer sufficient,” Tang said.
In contrast, Hainan raised its tax-free shopping limit from 5,000 yuan 13 years ago to the current 100,000 yuan per visitor per year. It also adjusted the range of products included for duty-free shopping.
To encourage visitors to spend more in Hong Kong, Tang said the CPPCC representatives were proposing that mainland visitors must stay overnight to qualify for the higher duty-free shopping benefit.
Their proposal also recommends bringing back the multiple-entry visa scheme introduced in 2009, which allowed Shenzhen residents to make an unlimited number of trips to Hong Kong.
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It was replaced by a once-a-week visit permit in 2015 amid concerns about parallel trading and Hong Kong’s capacity to handle surges in single-day visitors.
In January, authorities in Hong Kong and Shenzhen were negotiating to bring back the multiple-entry scheme.
Most mainland visitors to Hong Kong travel in group tours as Beijing forbids most citizens from travelling on their own. Only residents of specific cities are allowed to visit the city as solo travellers.
Last week, for the first time since 2007, Beijing added two cities – Xian and Qingdao – to the list of places whose residents can make individual trips to Hong Kong, bringing the total to 51.
DBS Hong Kong economist and strategist Samuel Tse Ka-hei said the CPPCC members’ proposals, if approved, would boost the city’s tourism and related income.
“The magnitude of the impact will hinge on the mainland’s economic recovery,” he said.
China’s gross domestic product expanded by 5.2 per cent in 2023 from a year earlier, beating the official target of 5 per cent, propelled by consumption that generated 4.3 per cent to the overall growth.
Official data also showed the property sector remained a drag, contracting by about 0.6 per cent.
More from South China Morning Post:
- Beijing should allow mainland Chinese to visit Hong Kong more easily, increase duty-free goods quota, Starry Lee says
- Hong Kong budget 2024-25: authorities earmark HK$1.09 billion for city’s drive to offer more cultural experiences, mega events
- What is the newly expanded solo traveller scheme and how will Hong Kong benefit? Analysts unsure over repeat of post-Sars economic, tourism boom
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