Millions vital nearby limit now buy their groceries in Hong Kong

Every Saturday, Angela Zhang leaves her home in Shenzhen with a large, dull suitcase. When she earnings from Hong Kong in a afternoon, it is prominent with cosmetics products, bottles of wine, cooking oil and infrequently even rolls of hankie paper.

This has been a slight for a 35-year-old for some-more than 5 years. “Almost all a daily necessities we use during home are from Hong Kong.”

Zhang is distant from a customarily chairman doing this.

While many courtesy and annoy has been focused on together traders who batch adult on products like baby divert regulation for resale opposite a border, selling in Hong Kong has turn a monthly, or even weekly, event for many middle-class households in Shenzhen and a Pearl River Delta. Their selling list is no longer singular to oppulance products or big-ticket items, yet roughly any daily prerequisite one can imagine.

In practice, this adds several millions unchanging business to Hong Kong’s sell market. While it competence be good news for emporium owners and landlords, a outrageous liquid has combined a necessity for Hongkongers, who find they have to contest with mainland shoppers for tot regulation and many other products.

For many shoppers from Shenzhen, a city is simply a place to frequently batch adult on bargains.

“I go to Hong Kong twice a month. All a things that we use in a kitchen and a lavatory are from Hong Kong: shampoo, toothpaste, seasonings and soap,” pronounced Tang Ying, an administration manager in Shenzhen.

Like many shoppers, Tang says a cost disproportion is a large inducement – with assets some-more afterwards cancelling out a cost of a trip. On normal products sole in Hong Kong are 20 per cent cheaper than they would be in Shenzhen, Tang says.

“I even buy all a fruit, solidified seafood and beef in Hong Kong,” she said. “They are simply cheaper and better.” Kiwi fruit, for instance, sell for about 3.80 yuan (HK$4.67) any in a Shenzhen supermarket yet customarily cost HK$2.30 in Hong Kong. A solidified duck costs a homogeneous of about 70 yuan in Hong Kong yet some-more than 90 yuan in Shenzhen’s Jasco supermarket.

And it is not usually food; roughly all products, from iPhones to T-shirts, are cheaper in Hong Kong even yet they are all done on a mainland.

Lu Ting, China economist during Bank of America Merrill Lynch, says there are several reasons for a cost gap.

“First of all, China’s taxation rates on alien products are high. There are import and expenditure taxes on oppulance products [at rates between 3 and 30 per cent]. So for imports in China, they are customarily many some-more costly [than in Hong Kong],” Lu said.

“For products that are done in China, a sell prices have to embody 17 per cent VAT taxation and civic upkeep and construction tax. But if these products are sole outward a mainland, a 17 per cent taxation is returned, creation them cheaper when sole in countries with low imports taxation and low expenditure tax,” he said. Hong Kong has no expenditure tax.

Lu pronounced another large cause pulling adult a prices was aloft logistic costs. “The manufacturer needs to compensate several layers of agents, let and other fees to get a products on shelf. In a US, these costs are many reduce interjection to a really good grown sell networks.”

He pronounced some unfamiliar brands make it partial of their selling plan to deliberately pitch adult their sell prices on a mainland so their products would be deliberate oppulance goods.

Zhao Ping, a comparison researcher on consumer economics during a Chinese Academy of International Trade and Economic Co-operation, pronounced extreme income supply was also to blame. At a same time, a labour, land and let costs in a mainland have been rising faster than those in grown nations,” she said.

Zhao, like Lu, believes obscure taxes is pivotal to levelling a prices. “It’s really required to reduce import tariffs in a face of a tellurian mercantile integration,” Zhao said.

However, she pronounced a supervision shouldn’t directly cut a duties, as that competence usually advantage importers instead of end-users. She pronounced a supervision could cruise giving taxation rebates directly to consumers.

This year, Beijing has lowered import tariffs covering some-more than 780 categories of goods. For tot formula, a avocation has been halved to 5 per cent. However, internal media have reported that sell prices for alien divert powder have indeed risen interjection to strong domestic demand.

Price is not a customarily reason Shenzhen consumers are driven to Hong Kong. The superiority of feign products and food reserve concerns are also an incentive. “I don’t have to worry about food reserve problems when I’m selling in Hong Kong,” Tang said.

And for many middle-class people in Shenzhen, selling in Hong Kong is also a pitch of amicable standing and vital style.

“A smashing weekend for me and my partner is to go selling in Sha Tin or Sheung Shui after doing yoga in downtown Futian district in Shenzhen,” Tang said.

As a result, hundreds of thousands of Shenzhen residents now come to Hong Kong frequently for infrequent shopping. While there are no central figures, justification gleaned from other statistics is utterly telling. In 2011, scarcely 20 million mainland tourists visited Hong Kong and about 80 per cent of them were from Guangdong.

A lot of them come not for a Disneyland thesis park on Lantau or a perspective from The Peak. They come to Hong Kong to do their slight shopping. For people vital in Shenzhen, travelling to Hong Kong can be some-more available and cheaper than going to Guangzhou.

“It takes me a 45-minute train float and HK$30 to go from my home to Mong Kok,” pronounced Zhang, who lives in a Futian district of Shenzhen.

“I can save several hundred [dollars] from my selling any time. It’s a no-brainer.”

While Shenzhen boasts a top per capita disposable income on a mainland – 36,505 yuan per year in 2011 – a volume of income a residents spend in internal selling malls is approach next a inhabitant average.

When it comes to shopping, a residents cite to spend their fortunes opposite a border: domestic expenditure accounted for reduction than 27 per cent of a Shenzhen economy – next a inhabitant normal of 36.75 per cent.

Many Shenzhen retailers censure a vicinity of Hong Kong for a problem.

And with transport opposite a delta apropos cheaper and some-more convenient, a trend is expected to continue, with people from some-more mainland cities creation selling trips. It now costs Guangzhou residents reduction than HK$100 for a lapse outing to Causeway Bay.

“You can get a gentle round-trip train from Guangzhou to [the] Lo Wu [border checkpoint] and behind for customarily 49 yuan,” pronounced He Huiying, a Guangzhou-based college student. He saved some-more than 200 yuan when she bought sports boots in Hong Kong final week, instead of outlets of Guangzhou.

“The pinkish skinny-print Nike boots that we wanted to buy cost 769 yuan in a Nike emporium in Guangzhou. It is too costly for a college tyro like me. But we can get them for 550 yuan in Hong Kong. Now if we wish to go to Hong Kong, we usually need to make a call and compensate 20 yuan to get my visa renewed. we can go there any week.”