Formula smuggler gives thanks for 'one country, two systems'
Staff Reporter 2013-03-30 09:35
Infant formula on sale in Hong Kong. (Photo/CNS)
Shenzhen-based smuggler Lin Xiang (pseudonym) is thankful for China's one country, two systems policy regarding Hong Kong, which allows him to make multiple daily visits to buy cheaper and higher quality products like infant formula in the city and sell them to buyers on the mainland, Guangzhou's Southern Metropolis Weekly reports.
Lin doesn't feel pessimistic about his career outlook despite Hong Kong recently limiting the amount of formula that can be taken across the border to just two tins per person. The announcement in early February detailed a string of measures to ease the milk powder shortage in the region, largely due to the surging demand of buyers from the mainland, where the public distrust domestically made products.
Lin said he can buy other products such as diapers and shampoo on his trips. Lin can travel between Hong Kong and Shenzhen three times per day on average, with his personal record being six trips. He can earn 200 yuan (US$32) per trip, and after deducting his costs, he can make a daily income of 400 yuan (US$64), a big earning for the 18-year-old.
Lin joined a disciplined group of smugglers a year ago and became one of the people making a total of between 10,000 to 20,000 daily visits via Shenzhen, which are counted by total visits even when made by the same person, according to the city's customs officials. After the strengthening of daily checks, these smugglers have reduced their trips to around 3,000 per day, the report said.
Since April 2009, Shenzhen residents have been allowed to take multiple trips between Hong Kong and Shenzhen within a year using a single long-term visa. Shenzhen customs later provided an electronic clearance channel without human checks, thus facilitating the development of these daily smugglers.
A prospective smuggler must have a clean track record, which means having never having been arrested or required to pay a tax refund.
For experienced hands there is surprisingly little risk involved. According to customs regulations, mainland citizens can pass through customs as long as the products brought back are valued at under 5,000 yuan (US800), paying tax on anything over the limit.
Some Shenzhen customs officials are being bribed to relax checks on smugglers, claimed the report.
Some smugglers specialize in bringing through electronics products such as iPads or iPhones, but after Hong Kong announced restrictions on exporting infant formula, the smugglers can earn 50 to 60 yuan (US$8-$9.50) by per tin compared to the previous 20 to 30 yuan (US$3.20-$4.80), meaning more smugglers have switched to hauling powder.
According to security officials, Hong Kong-based smugglers accounted for 60% of the traffic between Hong Kong and the mainland, while mainland-based operators represented about 40%.
Lin believes the mainland reliance on Hong Kong products will not disappear in the near term because of the cheaper pricing and better quality of the products sold in the city.
