The Chinese mainland will increase the luggage duty-free allowance for residents entering from Hong Kong and Macao Special Administrative Regions (SARs), according to a notice issued by mainland departments on Friday. This move aims to further boost the retail and tourism market for Hong Kong and Macao as regional integration progresses.

Increased Duty-Free Allowance

Starting July 1, residents aged 18 or above entering the mainland from Hong Kong and Macao SARs can bring in personal items worth up to 12,000 yuan ($1,651) tax-free. Additionally, they can shop at duty-free stores at the border and bring in items worth up to 15,000 yuan tax-free. Previously, the duty-free allowance for luggage articles was 5,000 yuan.

Economic Impact

The new arrangements are expected to bring in an additional HK$8.8 billion ($1.13 billion) to HK$17.6 billion in shopping expenditure to Hong Kong, generating value-added of about HK$2.7 billion to HK$5.4 billion to the Hong Kong economy. John Lee Ka-chiu, Chief Executive of the Hong Kong SAR, emphasized that the increased allowance demonstrates the central government’s support for Hong Kong’s economic development.

Ho Iat Seng, Chief Executive of the Macao SAR, noted that increasing the duty-free allowance will stimulate tourism consumption and benefit small and medium-sized enterprises in Macao, injecting new momentum into the region’s overall economic development.

Enhanced Shopping Experience

The new measure will enhance the shopping experience for mainland visitors in Hong Kong and provide greater flexibility, attracting more visitors and boosting the development of diversified tourism. This will also help stimulate the retail environment in Hong Kong and bring vibrancy to the local economy.

Ken Wong, director of Hong Kong-based All Times Healthy Co, stated that the policy will bring great convenience for shopping and stimulate tourism in Hong Kong and Macao. He highlighted the opportunity for Hong Kong retailers to introduce high-quality products to attract mainland tourists.

Wang Peng, a research fellow from the Beijing Academy of Social Sciences, mentioned that the policy will directly stimulate sales growth in the retail industry and related sectors such as hotels, restaurants, and entertainment.

Visitor Arrivals and Trade Growth

The number of visitor arrivals in Hong Kong has been increasing over the first five months of the year. By the end of May, the total number of visitor arrivals reached 18 million, a 78 percent increase compared to the same period last year. Of these, 13.8 million were mainland visitors, a 74 percent increase compared to last year.

Trade between the Chinese mainland and Hong Kong SAR has grown 3.8 times in the 27 years since Hong Kong’s return to the motherland, reaching 2.03 trillion yuan in 2023. Various measures have been introduced by the central government to support Hong Kong SAR, including adding 10 more individual visit scheme cities, extending the period of stay for business visitors, and launching high-speed sleeper trains between Hong Kong, Beijing, and Shanghai.

Strengthened Connectivity

The improvement of transportation infrastructure and supportive policies has strengthened the connection between Hong Kong and the mainland, accelerating economic, cultural, and technological exchanges. Analysts believe this allows Hong Kong and the mainland to leverage their respective strengths, ultimately boosting the international competitiveness of both sides.