HK, Macao expect boost in local consumption with increased duty-free allowance

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The Chinese mainland will increase the luggage duty-free allowance for residents entering from Hong Kong and Macao special administrative regions (SARs), according to a notice issued by mainland departments on Friday. The move is expected to further boost the retail and tourism market for Hong Kong and Macao SARs as regional integration gains pace.

Residents aged 18 or above entering the mainland from Hong Kong and Macao SARs can bring in personal items worth up to 12,000 yuan ($1,651) tax-free. They can also shop at duty-free stores at the border and bring in items worth up to 15,000 yuan tax-free, effective from July 1, according to the notice issued by the Ministry of Finance.

Under the new arrangements, it is estimated that this will bring in an additional HK$8.8 billion ($1.13 billion) to HK$17.6 billion in shopping expenditure to Hong Kong, generating value-added of about HK$2.7 billion to HK$5.4 billion to the Hong Kong economy, Hong Kong SAR said in a statement on its official website on Friday. 

Under the new measures, the duty-free allowance for luggage articles brought into the mainland from Hong Kong and Macao by visitors who are mainland residents will be increased from the current level of 5,000 yuan to 12,000 yuan while retaining the measure of allowing for additional duty-free goods at value of 3,000 yuan purchased at port entry duty-free stores, bringing the total allowance to 15,000 yuan.

John Lee Ka-chiu, chief executive of the Hong Kong SAR, said on Friday that the current measure of increasing the duty-free allowance for luggage articles brought into the mainland from Hong Kong by visitors shows the central government’s support for Hong Kong’s economic development. 

Increasing the duty-free allowance will stimulate tourism consumption and benefit more small and medium-sized enterprises in Macao, injecting new momentum into the overall economic development of the Macao SAR, Ho Iat Seng, Chief Executive of the Macao SAR said on Friday.

The new measure will enhance the shopping experience for mainland 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. Additionally, the measure can help stimulate the retail environment in Hong Kong and bring vibrancy to the local economy, Lee said, according to the statement.

Ken Wong, director of Hong Kong-based All Times Healthy Co, told the Global Times on Friday that the policy of increasing the duty-free allowance will bring great convenience for shopping and stimulate tourism in Hong Kong and Macao.

“It is a great opportunity for Hong Kong retailers to introduce high-quality products from Hong Kong and around the world to attract mainland tourists. We must seize this opportunity and make the most of Hong Kong’s advantages as a free port to consolidate our title as a shopping paradise,” Wong said.

“This will directly stimulate sales growth in the retail industry, as well as the development of related industries such as hotels, restaurants, and entertainment,” Wang Peng, a research fellow from the Beijing Academy of Social Sciences, told the Global Times on Friday.

The number of visitor arrivals continued to increase over the first five months of the year in Hong Kong. As of end-May, the total number of visitor arrivals reached 18 million, representing an increase of around 78 percent compared to the same period last year. Of this, 13.8 million were mainland visitors, an increase of around 74 percent compared to the same period last year, according to Hong Kong SAR. 

In the 27 years since Hong Kong’s return to the motherland, trade between the Chinese mainland and Hong Kong SAR has grown 3.8 times, reaching 2.03 trillion yuan in 2023, China Media Group reported on Thursday. 

The central government has introduced various measures to support Hong Kong SAR, including adding 10 more individual visit scheme cities, extending the period of stay for holders of an exit endorsement for business visit traveling to Hong Kong, and launching the high-speed sleeper train between Hong Kong and Beijing and Shanghai.

The measures are expected to further support Hong Kong’s tourism and economic development and ensure the long-term prosperity and stability of the SAR, analysts said.

“The improvement of transportation infrastructure and supportive policies has strengthened the connection between Hong Kong and the mainland, accelerating economic, cultural, and technological exchanges between the two sides. It allows Hong Kong and mainland to leverage their respective strengths, ultimately boosting the international competitiveness of both sides,” Wang said.