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Economy

Real impact of China's import tax cuts not yet seen(2)

1
2015-06-03 17:05Xinhua Editor: Gu Liping

"My customers and I don't need to worry about the tax problem. The industry is becoming more mature and I'm working with courier companies which can take care of the delivery and customs clearance at the same time with a reasonable service charge," she added.

Ai said price is not the only reason that people like to buy things directly via foreign sites or agents, and that "they also want more choices and reliable quality."

The policy triggered particular concerns across the mainland-Hong Kong border. Some worry that the steep cut in import tariffs may hit Hong Kong's retail sector.

Hong Kong Department Stores and Commercial Staff General Union estimated that local pharmacies and cosmetic stores will be seriously affected, though long-term influence of tax cuts remains unclear.

Another group that might be affected is the controversial parallel traders, who pay short visits to Hong Kong to snap up consumer goods and re-sell them on the mainland.

Experts said lowering customs tax was one suggested solution to challenge parallel trading, which has had negative impacts on both sides.

But a Hong Kong parallel trader surnamed Leung told Xinhua that the tax cuts would have little impact on them.

"Because the market is huge," Leung said with strong confidence. "Chinese consumers will need a great amount of imported goods until they become more confident about the quality of domestic products."

Tariff reduction is not the only challenge for Hong Kong retailers.

In the newly established Guangdong Free Trade Area (FTA), several bonded stores have been set up where people can have a look or even try on bonded samples, then place orders online and have the products delivered to their doorstep directly from abroad.

Tempus Outlet in Qianhai bonded zone in Shenzhen is packed with customers during weekends. The shopkeeper, who declined to be named, told Xinhua the most popular products are baby formula and diapers, the same as Hong Kong supermarkets and pharmacies.

"Baby products are always in rigid demand," she said.

Several shoppers agreed that it is much more convenient to go to local bonded stores than to Hong Kong. With transportation and time cost in account, price differences become almost negligible.

"Chinese consumers now have more options to buy imported goods, and intense competition will no doubt bring down prices," Lin Jiang said. "I think that's the significance of the tax reduction - it will boost competition."

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