Is it just me, or have the streets and sidewalks in Central been a bit less crowded over the last few days? Protests against parallel traders seem have prompted a fall in the number of Mainland smugglers in the New Territories – presumably following a clampdown of some sort in Shenzhen. Maybe the decline in visitors has trickled down to the urban areas. Or maybe it’s a seasonal thing. Or it’s just my imagination.
While most Hongkongers rejoice at a fall in visitor numbers, landlords and other grubby interests want to keep the influx coming. Sensing that local residents are finally losing patience, they are proposing large shopping centres on land near the border, so Mainland traders can come in, stuff their suitcases full of diapers and Yakult, and go back, without clogging up New Territories towns and transport. The latest idea involves Sha Tau Kok.
The underlying assumption is that the cross-border trade in milk powder, toothpaste and Ferrero Rocher chocolates is some sort of natural and normal economic activity. Of course it’s not. It’s an aberration resulting from tax/price differences and perceived differences in product quality/safety, combined with an open border and – where the organized trading is concerned – a ready supply of cheap labour. No-one seems to have examined the economics of this phenomenon, perhaps because it would highlight the scale of corruption among Mainland Customs officials or the amount of tax revenue Beijing is losing to smugglers. But it seems like a staggeringly inefficient and wasteful way to add value.
I would love to know…
- How many man-hours per day/week/month are devoted to the cross-border transportation by wheeled suitcase of all the Yakult, milk powder, etc?
- How many passenger-kilometres of bus/MTR travel do the traders account for per day/week/month? What is the carbon footprint?
- What are the profit margins on idiotic commodities like Yakult and Ferrero Rocher, after transport/smuggler/bribery/distribution costs? Just how much of a premium does Hong Kong-sourced toothpaste command over the border, given that the Pearl River Delta is full of Watsons and Park N Shops with shelves groaning under the weight of Darlie and Colgate?
- How is the margin broken down? How much is due to Mainland tax, retail pricing practices or business overheads? How much is due to belief in Hong Kong goods’ superiority or fears of counterfeit/adulterated Mainland products – and are these psychological factors justified or do vested interests encourage them?
- What are the costs of all these back-and-forth trips to taxpayers in terms of HK/Mainland immigration/customs processing and facilities? What are the costs to New Territories residents in terms of extra travel time, higher local prices, mental health, foot injuries from kicking of suitcases, etc?
This is one of the rare occasions when a genuinely useful subject for a doctoral thesis has appeared – graduates pondering a PhD in recontextualizing gender roles or something, please note.
Basically, what I am saying is, forget the locusts and just look at the economics: this is nuts. Hundreds of men and women trundling suitcases of diapers by foot across what is basically an international border all day every day. Even if the stuff weren’t already on sale on the Mainland, you could load each week’s thousands of cans of milk powder, tubes of toothpaste, bottles of Yakult and little round globules of Ferrero Rocher into a few dozen 20-foot containers and carry them to Shenzhen by truck or cargo ship in a few hours and be done with it. This isn’t market forces – it’s perverse.
Back to Singapore. It seems to be the done thing right now to dig up old photos of the Lion City to show how ramshackle the place was before Towering Genius of the Universe Lee Kuan Yew performed his miracles. So, for people who like this sort of thing, here are my late father’s, taken in 1946. This was around the time Harry Lee was on a ship heading to England and complaining about the smell of Negroes (according to his memoirs – can’t make this sort of thing up)…