China Limits Neighbors’ Visits to Hong Kong After Smuggling Complaints

http://www.nytimes.com/2015/04/14/world/asia/china-limits-neighbors-visits-to-hong-kong-in-fight-against-smuggling.html

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HONG KONG — The Chinese government announced on Monday that residents of Shenzhen would be limited to one visit to Hong Kong a week, in a move to defuse public anger here over surging numbers of mainland Chinese visitors who cross the border to buy goods.

Until now, many residents of Shenzhen, the city next to Hong Kong, could cross the border daily using multiple-entry permits — much more easily and often than many other mainland Chinese residents. But the cross-border visitors became the focus of raucous protests in Hong Kong in recent months. Demonstrators complained that many frequent commuters were smuggling goods back to China, pushing up demand in Hong Kong for medicines, cosmetics, milk powder and other goods, driving up shop rents, squeezing out other businesses and disrupting life near the border.

The Chinese Ministry of Public Security said on Monday that permanent residents of Shenzhen applying for new multiple-entry permits for Hong Kong would be limited to one visit a week, reported Xinhua, the state news agency.

“Tensions between the numbers of visitors to Hong Kong and the capacity of Hong Kong to absorb them has become increasingly clear,” Xinhua reported, citing an unidentified official from the Ministry of Public Security, which controls visas.

The police on both the Hong Kong and mainland Chinese sides of the border have repeatedly tried to crack down on travelers who avoid duties by falsely claiming that they are carrying goods for their own use and by concealing or understating the value of goods. But the numbers of people crossing the border at Shenzhen have overwhelmed those efforts. In 2013, the Hong Kong introduced limits on the amount of milk powder, in great demand by Chinese parents, which travelers could take out of the territory.

The cross-border merchants have helped keep alive tensions in Hong Kong over mainland Chinese influence, following street demonstrations last year against Beijing’s proposals for electoral changes in Hong Kong that would deny many residents’ demands for an open election for the city’s leader, or chief executive. Since Hong Kong, a former British colony, returned to Chinese sovereignty in 1997, it has maintained its own laws and border controls, meaning that mainland visitors cannot cross the border at will.

Hong Kong residents who had joined the protests against the cross-border traders said the decision showed that Beijing could be forced to make concessions.

“This shows that our voice can make a difference,” said Andy Yung Wai-yip, a beach lifeguard who said he took part in the protests against the mainland traders, as well as in the pro-democracy demonstrations last year. “I was pessimistic before, but this gives me hope for our movement,” he said Sunday, after the Hong Kong news media reported the proposed visa changes.

But while the protesters have cast the visitors as a blight, mainland Chinese and Hong Kong officials have said that critics are exaggerating the problem of smuggling and warned that tensions were deterring mainlanders from visiting Hong Kong, which relies on tourism for 5 percent of its economic activity. In 2014, mainland Chinese made 47.2 million visits to Hong Kong, an increase of 16 percent over the previous year. The numbers continued to climb until March, when Hong Kong officials said there was a drop, apparently prompted by the protests.

In the Shatin district, one of the parts of northern Hong Kong packed with mainland visitors shopping with trolleys to lug goods across the border, shop workers said the visitor limits would hurt business. Share prices of several Hong Kong retailers fell on Monday morning.

“It will definitely hurt our business and the retail sector,” Fong Hon-chung, a manager of the Kwok Shing Dispensary, said in an interview before the Chinese government announcement. He said about two-thirds of the dispensary’s business came from mainland shoppers. “Some of the pharmacies here will inevitably go out of business.”

One-tenth of the total number of mainland Chinese visits to Hong Kong last year were made by Shenzhen residents who crossed the border more than once a week, Leung Chun-ying, the chief executive of Hong Kong, said at a news conference on Monday. But many of the people who smuggle goods from Hong Kong into China are Hong Kong residents, who will not be affected by the limits on mainlanders, Mr. Leung said. He added that the police and other agencies would develop new approaches to deter smuggling by Hong Kong residents.

“I suppose the new policy is only fair if it applies to them as well,” Frand Fong, a Shenzhen resident visiting Hong Kong on what he said was his weekly shopping trip, said in an interview. “I’m too busy at work to come here more than once a week, so I’m not affected.”