Lest we forget: quite a lot of the parallel traders who exploit glaring arbitrage opportunities by carrying goods like phones and Yakult yogurt drink north across the border are Hongkongers, not Mainlanders. The Shenzhen authorities would like to remind us of this, and are clamping down on these people in what the Standard calls ‘apparent retaliation’ for the Big Lychee’s crackdown on the Mainlanders swamping Sheung Shui.
It is hard to see the logic here. The Mainlanders transporting cargoes back to Shenzhen are breaking Hong Kong immigration laws by working here without the correct permit. Both they and the Hongkongers carrying goods are breaking Mainland laws by trying to evade payment of import/sales taxes. Hong Kong is applying its law correctly, and Shenzhen customs should be doing the same by requiring all travellers, from anywhere, to pay the duties and taxes they owe on items they are carrying.
Maybe that’s what this ‘retaliation’ is for. Could it be that when Chief Secretary Carrie Lam went to Beijing recently to moan about the Great Mainland Courier Menace, she effectively snitched on Shenzhen for not running its customs department properly? If so, it’s yet another in a long line of snubs by haughty Hong Kong officials towards their peasant-like counterparts around the Pearl River Delta.
People carry all this junk across the border because it pays better than washing dishes or picking metal and plastic out of garbage dumps. (Mainland demand for Yakult, I am reliably informed, arises from its supposed properties as a female breast-enhancer. Do they drink it or rub it on? No idea.) If smuggling is no longer an option, we can surmise, people will be poorer. What better time, then, for Hong Kong to announce that it will adopt an official poverty line for the first time and revamp the old Poverty Commission?
Chief Executive CY Leung seems to divide his administration’s time three ways: doing stupid things that provoke hostility; doing things that provoke hostility but could have been popular if better handled; and doing things that deserve acclaim but aren’t presented well enough to get it. This is in the third category; they should have made a bigger splash about it. Like the minimum wage – which the last government also bent over backwards to avoid before giving in – a poverty line will force officials and everyone to examine, measure, monitor and possibly end up with no choice but to do something about a problem previously swept under the carpet.
Welfare groups already use a poverty line: an income that is half the median household income adjusted for household size. In Hong Kong, where the median income for the top 10% of families is 27 times that of the bottom 10%, some 18% of the population live on such an income. The welfare lobby say that the cash benefits system is faulty in that it denies handouts to the poor if they live in (ie burden) a somewhat-less-poor household, and can be humiliating to apply for. Oxfam’s account seems to support this.
For an idea of how screwed up our redistribution of wealth is, consider an example that legislators could be shouting from the rooftops but for some reason don’t. A family on HK$100,000 a month with two kids gets HK$60,000 knocked off their annual salaries tax for each one. In other words, the rest of the community pay them the equivalent of HK$5,000 a month for each kid. A family on HK$15,000 a month with two kids meanwhile gets… nothing, pretty much. Weird or what? (They might qualify for help with specific needs like school costs; page 36 here gives examples of what really low-earners get by way of welfare. Essentially, the rich actually get bigger handouts.) This will probably be a less warped system by 2017.