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China, Hong Kong Combat Parallel Trading

by Mary Swire, Lowtax.net, Hong Kong
14 April, 2015

China's State Council has taken the decision to restrict the travel of Shenzhen residents, in an attempt to curtail parallel trading activity in certain areas of Hong Kong.

The Council's Hong Kong and Macao Affairs Office announced on April 13 that the previous unlimited re-entry policy for Shenzhen residents into Hong Kong will be restricted to one visit each week, and that the maximum stay for those residents for each visit will be seven days.

There has recently been an influx of Mainland Chinese parallel traders taking advantage of the existing multiple-entry visa policy to buy stock tax-free in Hong Kong to resell in Mainland China at a profit. They have been purchasing supplies in Hong Kong, which does not charge a sales tax, and taking them across the border to the Mainland in small quantities to avoid paying import duties.

As a consequence of the traders' increased activity, law enforcement agencies in Hong Kong have had to implement a series of countermeasures to reduce the nuisance caused, and to improve order at railway stations and boundary control points.

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