Beijing raises duty-free limit for mainland Chinese tourists in Hong Kong to HK$16,100

• Limit raised from HK$5,400 to HK$16,100 if visitors buy goods at duty-free stores at border crossings, or HK$12,900 for other shopping

Beijing has raised the duty-free shopping allowance for mainland Chinese tourists visiting Hong Kong and Macau to up to HK$16,100 (US$2,100) per trip, with the measure to begin on July 1 at six border crossings.

The Hong Kong government estimated the measure would increase tourist spending in the city by at least HK$8.8 billion, or even up to HK$17.6 billion, a year. The increased consumption would add between HK$2.7 billion and HK$5.4 billion to the economy.

According to a statement from the Ministry of Commerce on Friday, the central government and authorities in Macau and Hong Kong have agreed to increase the limit for mainland tourists visiting the two cities.

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A separate joint statement from several central government departments said that mainland residents aged 18 or over could have their duty-free allowance raised to 12,000 yuan (US$1,535) or HK$12,900.

The limit could be further increased to 15,000 yuan, or HK$16,100, if they shopped at duty-free stores at border crossings.

Currently, visitors from across the border must pay a tax of 13 to 50 per cent to the central government for purchases made outside the mainland above a threshold of 5,000 yuan per trip, a measure introduced in 1996.

In contrast, the southern island province of Hainan, which is also popular with mainland tourists, has a tax-free purchase limit of 100,000 yuan for each traveller per year.

Six crossings will be covered by the initial roll-out of the new limit: Lo Wu, Futian, Shenzhen Bay, the West Kowloon high speed rail terminus, the Hong Kong-Zhuhai-Macau Bridge and Gongbei. Full implementation will begin on August 1.

Chief Executive John Lee Ka-chiu said the latest measure by the central government highlighted its support for the city's economic development and he expressed his gratitude to Beijing.

"The new measure will enhance the shopping experience for mainland resident visitors in Hong Kong and allow them greater flexibility when shopping, which is beneficial for Hong Kong in attracting more visitors and boosting the development of diversified tourism," Lee said after the announcement.

"Additionally, the measure can help stimulate the retail atmosphere in Hong Kong and bring vibrancy to the local economy."

The Post earlier reported Beijing's intention to raise the allowance level, but the amount would be "far below" the 30,000 yuan proposed by industry representatives in the city.

Tourism and retail industry representatives have been urging mainland authorities to increase the threshold since the reopening of borders after the pandemic, as big-spending visitors were found to be opting for more cultural experiences rather than just shopping.

The city's currency was also expensive for such visitors because of its peg to the US dollar.

Starry Lee Wai-king, the city's sole delegate to the nation's top legislative body, said she welcomed the increase, adding that she was grateful for Beijing's decision.

Tourism and retail industry representatives have been urging mainland authorities to increase the threshold since the reopening of borders after the pandemic. Photo: Jelly Tse

Asked what she thought of the limit given calls to raise it to 30,000 yuan per trip, Lee said the increase was already "very big" and any new measure should be implemented step by step.

"I think this measure represents an important step forward. The previous duty-free limit of 5,000 yuan was set decades ago," she said. "For us to get this large increase of several folds, it is already a very good message. I believe that, as this is implemented, it can be adjusted according to the actual situation based on a review."

The veteran lawmaker said the amount could not be compared with Hainan's limit, as Hong Kong's was calculated on a per trip basis rather than annually.

She disagreed that the measure would fail to benefit the local economy amid changing consumption patterns, noting she agreed with the estimates from the government.

"We have to do our part as well, apart from having policy initiatives. We have to make Hong Kong an attractive place for tourists to come and an attractive place for tourists to consume," she said.

Henry Tang Ying-yen, a standing committee member of the Chinese People's Political Consultative Conference, also welcomed the move.

He cautioned against making comparisons with Hainan as its circumstances differed from Hong Kong's, adding that the tourism industry should step up its efforts to attract mainland and foreign tourists.

The Tourism Board said its "Summer Chill Hong Kong" campaign would make the most of the new measure, with its "Summer Triple Rewards" promotion giving overnight visitors access to offers for transport, sightseeing, dining and shopping.

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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

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