Crackdown on popularly smuggled goods to last at least till year end

The tightened supply of commonly smuggled goods into Guangdong province has caused prices to shoot upwards sharply, since authorities on both sides of the border started cracking down on the so-called parallel traders. The traders, by their sheer numbers, were creating a nuisance for residents of the northern New Territory.

The most sought after "grey product", the newly released iPhone 5, climbed to a record 8,000 yuan (nearly HK$10,000), almost double the retail price of HK$5,688, a shop owner in Shenzhen told China Daily.

"Before, people all knew that whatever you wanted from Hong Kong, you could get it in North Huaqiang disrtict, even at cheaper prices. However, that 'reputation' was ruined, recently when our Hong Kong 'suppliers' had problems trafficking products across the border," said the shop owner. The man, who spoke to China Daily on condition of anonymity, has been selling mobile phones for years in North Huaqiang, the trading hub for parallel imports in Shenzhen.

He had expected to earn huge profits on iPhone5 sales. He was getting orders for the new phone well before the official launch. Hong Kong "suppliers" also had been "optimistic" about the number of iPhone5s to reach his shop, soon after the product was launched, late last month, said the shop owner.

However, the recent harsh crackdown has cut deeply into businesses such as his. The man said he has lost contact with his Hong Kong partner, since the crackdown.

He said he was not the only one affected as the industry was also facing shortages because there's been serious action at all check points. "Hong Kong partners all turned us down, saying they were facing 'incredibly high risk' for trafficking business at this moment," said the anonymous shop owner.

The strengthened effort to combat parallel trade in a collaborative effort between the Customs and Excise Department of the SAR and the Shenzhen Anti-Smuggling Bureau has taken effect.

Ben Leung Lun-cheung, head of the Land Boundary Command, said on Friday that mainland authorities had uncovered 120 cases of parallel trading and made 123 arrests.

The unpaid taxation of the confiscated goods amounted to 1 million yuan.

The number of plain clothes officers has been increased on both sides, inside and outside Customs, to gather intelligence on how couriers and smugglers operate with their receivers, as well as how syndicates coordinate behind the scenes, Leung said.

One of the partners of the anonymous shop owner said that before the crackdown, trafficking had developed to quite a "professional" level, with traders working as teams to schedules and division of labor. Some even wore uniforms. But since many of those traders have been arrested, their cross border endeavors are now in suspension.

Meanwhile, Hong Kong warehouses used by parallel traders have goods piled high, destined to be carried across the border. But many other cross border traders have given up trading for fear of arrest.

"We don't dare to traffic anything through the border at this moment and we stopped receiving any new orders. We even returned product to the client as we have no confidence in trafficking nowadays," said the parallel trader.

Leung, of the Hong Kong customs office, said the crackdown will last at least until the end of this year.

Meanwhile, the Mass Transit Railway Corporation will start to limit passengers from carrying luggage weighing more than 32 kilograms from October 9, in a bid to curb the number of passenger-couriers.

You may contact the writers by andrea@chinadailyhk.com

(HK Edition 10/06/2012 page1)