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Hong Kong retailers get the shivers as Shenzhen explores idea for downtown duty-free zone to draw mainland shoppers
- The big question is, why will mainlanders visit Hong Kong if prices are the same in Shenzhen?
- Those less downbeat say visitors will keep coming as Hong Kong offers much more than shopping
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Hong Kong’s position as a shopping paradise will be threatened if neighbouring Shenzhen goes ahead with a mooted duty-free shopping area that would target mainlanders in the Greater Bay Area, analysts and retail industry leaders have warned.
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Some said mainland Chinese visitors – who made up nearly 80 per cent of Hong Kong’s overall tourist arrivals before the Covid-19 pandemic – would prefer getting their luxury goods and cosmetics in the Guangdong city if tax policies there were relaxed.
“If the two places offer the same tax treatment, why would mainland travellers want to come to Hong Kong to shop?” asked Michael Cheng Woon-yin, PwC’s Asia-Pacific, mainland and Hong Kong consumer markets leader.
Shenzhen authorities announced last month they planned to explore a raft of proposals, including the development of an international duty-free shopping area for the Greater Bay Area (GBA), with new stores opening downtown and a raised limit for tax-free consumption.
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The GBA is Beijing’s ambitious plan to group nine Guangdong cities, Hong Kong and Macau into an integrated economic and business hub to rival Silicon Valley in California. It had a combined population of over 86 million last year.
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