Balancing the impacts of the tourism industry on the economy and people of Hong Kong (2015/03/25)

President, Hong Kong has always taken pride as a shoppers' paradise and a hospitable city. However, starting from the end of the year before last, we have the "anti-locust campaign", and then in recent days there are also protests against parallel traders. During these protests, which are becoming increasingly violent, hundreds of protestors hurled abuses at and even physically harassed tourists and pedestrians in shopping centres, shops and on the streets. Some of these incidents have been recorded by the media and tourists at the scene and widely broadcast in the Mainland and even the world. Consequently, the previous good impression of Hong Kong being hospitable, courteous, civilized and law-abiding has now gone down the drain. 

The series of violent incidents targeting Mainland tourists and parallel traders are now affecting our tourism industry. Statistics provided by the Hong Kong Tourism Board show that incoming Mainland tourist groups have decreased from 470 a day in early March last year to 198 at the same period this year, a decrease of nearly 60%. As the protests have subsided recently, the number of tourist groups bounces back to over 300 a day on average. It is evident that tourists are very sensitive to the security environment in Hong Kong. Apart from the Mainland, there are also hidden concerns in the Southeast Asian market. The industry has reflected that recently many Chinese people from Southeast Asian countries and also Taiwanese people have asked whether Hong Kong is safe. They wish to cancel their trips for fear of becoming targets of the protestors because they speak Putonghua. 

Hotel revenue fell 20% on average in the past two months and guesthouses suffered even more, with a decline in revenue of almost 40%. During the Chinese New Year holidays, the five major tourist attractions in Hong Kong, namely the Ocean Park, Disneyland, Ngong Ping 360, Peak Tram and Madame Tussauds Hong Kong, recorded a decline in attendance of between 10% and 20%. The newly published figures show that visitors received by the Ocean Park in March dropped as much as 30%. If the current tense atmosphere continues, and a handful of people turn the violent protests into a weekly routine, the inbound tourism in Hong Kong this year can hardly avoid a severe winter. 

President, when there is a difference in commodity prices in two places, coupled with the guaranteed quality of the commodities in Hong Kong, it is normal that Mainland visitors like to shop in Hong Kong. The crux of the problem lies with the same-day visitors who come to shop in Hong Kong without staying for the night and the nuisance caused by tens of thousands of Hong Kong and Mainland parallel traders. Parallel trading activities affect the daily lives of residents in towns along the main trunk roads such as Sheung Shui, Lok Ma Chau and Yuen Long. This problem has continued for a few years but the Government has never taken any specific measures to root out the problem. It has only introduced some measures sporadically and the effect is limited. Some radical groups, including those with a "Hong Kong independence" background, take advantage of the local residents' grievances to stir up trouble. Their purpose is to incite conflicts between the Mainlanders and Hong Kong people but they have no real intension to solve the prevailing problems. 

To tackle the problems caused by parallel traders, some Members and members of the public suggest abolishing the policy on multiple-entry endorsements and imposing a land departure tax, to which I disagree. According to the figures provided by the Shenzhen Customs, among the parallel traders, the numbers of Mainlanders and Hong Kong residents are about the same, totalling about 30 000, which is only a small number compared with the 1.5 million Shenzhen residents holding the multiple-entry endorsement. To some Shenzhen residents who frequent Hong Kong to purchase commodities for their own use, capping the number of entry may dampen their desire to visit Hong Kong, which will certainly help reduce the number of visitors but will have no effect on curbing parallel trading activities as parallel trading syndicates can always hire Hong Kong people to carry goods for them. Hence, the nuisance caused by parallel traders in districts such as Sheung Shui and Lok Ma Chau will not be alleviated. The indiscriminate cancellation of the policy on multiple-entry endorsements cannot resolve the problem caused by parallel traders but will give Mainlanders the impression that Hong Kong discriminates against them. Consequently, middle-class Mainlanders with stronger consuming power will not visit Hong Kong, but choose to travel to other countries or places that have less strict immigration policies and spend their money there. 

President, in his original motion, Mr Vincent FANG proposes that the SAR Government should increase tourism, transport and retail facilities, to which I agree. As regards the proposal of levying a land departure tax on Mainlanders, I beg to differ. In my view, adjusting the multiple-entry endorsements to one trip per day or "certain number of trips per endorsement" can well reduce the impact caused by Mainland parallel traders. Moreover, if Hong Kong imposes a tax on Mainlanders, the Mainland Government will very likely impose the same tax on Hong Kong visitors, so as to be accountable to its people. Over 60 million Hong Kong people enter the Mainland via land boundary crossings each year. A land departure tax levied by the Mainland will increase the expenses of Hong Kong people who frequently travel across the border and make immigration clearance inconvenient. 

To maintain a healthy development of inbound tourism services provided to Mainlanders, I have the following suggestions: 

First, comprehensively review the policy on the Individual Visit Scheme (IVS). In 2003, in response to the SAR Government's request to support the Hong Kong economy in the wake of SARS, the Central Government gradually opened up 49 Mainland cities, allowing residents of these cities to visit Hong Kong under the IVS. In 2009, again under the request of the SAR Government, the Central Government further allowed residents with Shenzhen household registration to visit Hong Kong on multiple‐entry endorsements. The two policies have been put in place for many years and it is time to conduct a comprehensive review. If we only review the policy on multiple-entry endorsements or simply cancel it, it would only make Mainlanders think that we discriminate against Shenzhen residents. As a result, the Mainland middle-class tourists who can afford to visit other places or commercial visitors will visit other places instead or shorten their stay in Hong Kong, which will deal a direct blow to the tourism-related trades in Hong Kong. Therefore, I suggest that the SAR Government should study the possibility of further expanding the scope of IVS cities beyond the 49 existing ones while discussing with the relevant Mainland authorities on how to improve the policy on multiple-entry endorsements. It is natural for the two places to review the policies on immigration and tourism to take into account the feelings of the people of both places and it is also conducive to the sound development of the Hong Kong tourism industry. 

Second, take multi-pronged measures to crack down on parallel trading activities. In my amendment, I mention about co-operating with the Mainland Customs to combat parallel trading activities. As Hong Kong is a free port, it is legal to carry commodities out of Hong Kong under normal circumstances. It is only when parallel traders carry large quantities of commodities into the Mainland that they may violate the Mainland customs laws. I propose that the authorities take the initiative to work with the Mainland Customs and request them to step up law enforcement and conduct a review on a regular basis. When it is difficult for the parallel trade syndicates to operate, they will eventually back down. In addition, the SAR Government should, in accordance with the present law, step up the prosecution of Mainland parallel traders for breach of conditions of stay, and also step up the prosecution of parallel trade syndicates for street obstruction, illegal parking and congesting road traffic by loading and unloading goods or causing nuisance, as well as those who illegally use units in factory buildings to engage in parallel trading activities. It is hoped that through these administrative measures, the impact of parallel trading activities on local residents will be alleviated as far as possible.

Third, expeditiously build a shopping centre at the border. When visitors spend money in a certain district, it should be conducive to the economic development in that district and job opportunities can be created, but the crux of the existing problem lies with the overwhelming number of visitors which have disrupted the daily lives of local residents. If the Government can, under normal arrangements, expeditiously find land in the border area in the vicinity of Lok Ma Chau, Shenzhen Bay, Lo Wu and Sha Tau Kok and encourage the business sector to participate in the building of border shopping centres, I believe it will help divert the same-day Mainland visitors and those who genuinely visit Hong Kong for consumption and reduce the nuisance caused to the New Territories residents.

Lastly, I hope that other than implementing targeted measures to divert the visitors, the authorities will rigorously enforce law against the lawless, reckless and radical thugs who participate in anti-parallel trading protests and prosecute them in accordance with the law. Condoning such illegal actions of the perpetrators will only incite their radical behaviour even further, which is no different to encouraging them to stage more protests in a more radical manner, consequently further damaging Hong Kong's image in the world and its economy. 

President, I so submit.