Thursday, June 13, 2024

In pricey Hong Kong, residents flock to China for cheaper dining, shopping

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Hong Kong, China – Hong Kong resident Mimi Lau regularly heads to Shenzhen to grab a meal with friends or go shopping in one of the Chinese megacity’s many upscale malls.

For Lau, who lives in Hong Kong’s New Territories near the border with mainland China, Shenzhen is not only a shorter bus ride than most of the popular shopping and dining areas in her home city, but much cheaper, too.

“It’s so easy, especially from Shenzhen Bay Port. You just walk across [the border]. They check your Hong Kong ID and your mainland ID, and you have a massive network of transportation right at the border: taxis, and buses. You can call your own Didi,” Lau told Al Jazeera, referring to China’s popular answer to Uber.

“It’s just so convenient, and you don’t have to bring any cash with you. Everything is electronic payment.”

Lau is not alone in her enthusiasm for Shenzhen, a sprawling metropolis of more than 17 million people whose transformation from a sleepy fishing village took off in tandem with China’s economic reforms of the 1980s.

Hong Kong residents made 53 million trips over the border to Shenzhen in 2023, the first full year since the lifting of COVID-era border restrictions, according to government data.

In March, the city experienced a record 9.3 million departures, mostly to mainland China, leaving nightlife and shopping hotspots virtually empty during the Easter holiday period.

Hong Kong’s nightlife areas are losing out to cheaper options in mainland China [Tyrone Siu/Reuters]

For many Hong Kongers, Shenzhen’s draw is a superior range of shopping, dining and entertainment options at a fraction of the price.

Hong Kong resident Yvonne Koh said she and her friends enjoy visiting Shenzhen for day trips full of massages, affordable meals and fun activities like go-kart racing.

“It’s just very safe and everything is so convenient,” Koh told Al Jazeera.

Hong Kong, a former British colony that retains a distinctly more capitalistic way of life than the Chinese mainland, has long been wealthier than other parts of China, although the gap has narrowed amid the swift rise of the world’s second-largest economy.

Hong Kong’s economy is nearly twice the size of Shenzhen’s on a per capita basis, according to the Hong Kong Trade Development Council, giving the city’s residents superior spending power across the border.

But Hong Kongers have recently found their money going further still due to the favourable exchange rate between the Hong Kong dollar, which is pegged to the US dollar, and the Chinese yuan.

At the same time, China’s slower-than-expected recovery from the pandemic has made prices appear even more attractive to visitors.

With enhanced purchasing power in China, Hong Kong residents are spending an increasing share of their income across the border on everything from cheaper medical services to bargain hunting at Shenzhen’s new Costco, according to Chim Lee, a senior China analyst at the Economist Intelligence Unit.

“On top of outbound tourism to the mainland [and overseas], residents are also spending more on daily necessities such as groceries and prescription glasses,” Lee told Al Jazeera.

“Lower prices in the mainland – aided by the relative strength of the US dollar…, growing familiarity with mainland lifestyle apps and better customer services have facilitated this trend,” he added.

Travelling to Shenzhen is also easier than ever, with multiple subway and bus routes to choose from. By high-speed train, the first stop over the border is just 15 minutes away.

While making the journey requires visitors to go through immigration, the process is usually speedy outside of major holidays.

Shenzen
Shenzhen transformed from a sleepy fishing village to one of China’s biggest cities following the introduction of economic reforms in the 1980s [Tyrone Siu/Reuters]

China is not only trying to lure Hong Kong natives across the border.

Late last year, Beijing relaxed visa requirements for foreign residents in Hong Kong, a sizeable portion of the city’s population. They can now apply for a six-day visa to enter Guangdong Province, home to Shenzhen and Guangzhou.  Paying for goods and services, long a source of frustration for foreign tourists, has also recently become easier.

Foreigners can now link their credit card with the payment app Alipay and spend up to $2,000 without registering their ID, although certain functions remain inaccessible without registration.

Still, Hong Kong retains some draws over the mainland.

While the distinction between Hong Kong and mainland China has blurred amid a far-reaching national security crackdown in the semi-autonomous territory, the city still has many more rights and freedoms than the mainland.

Mainland China also lacks an open internet and its apps have a reputation for being invasive of users’ privacy, leading frequent visitors like Lau to keep a separate phone for trips there.

“There is a little bit of a psychological apprehension once you cross the border. You know you have to change your settings on your SIM card. You’re no longer getting Facebook and WhatsApp,” she said.

“[But to] be honest, the price, or the value for money on offer for that temporary suspension of connection to a free world, is well worth it.”

The boom in Hong Kongers heading to Shenzhen marks a major reversal at the border, where traffic used to move primarily in the opposite direction.

Thousands of Chinese swam to Hong Kong, then still a British colony, to escape the turmoil of the Cultural Revolution in the 1960s and 1970s.

Following Hong Kong’s return to Chinese sovereignty in 1997, the city became a draw for mainland Chinese seeking more economic opportunities and a more open social and political environment.

Hong Kong also drew millions of Chinese tourists each year who could access brands and products unavailable on the mainland.

COVID-19 brought cross-border traffic to a standstill as both the mainland and Hong Kong imposed some of the harshest restrictions in the world on travel and freedom of movement.

Neither fully dropped “COVID-zero” restrictions until the end of 2022, long after most of the world had reopened.  Both economies have struggled to return to pre-pandemic levels due to their unique challenges.

Tens of thousands of Hong Kong residents and numerous firms have departed the city since sweeping national security laws were enacted following massive pro-democracy protests in 2019.

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Hong Kong authorities launched a far-reaching crackdown on dissent following the passage of a sweeping national security law in 2020 [Tyrone Siu/Reuters]

The city is also struggling to draw tourists south of the border, in part due to the strength of the Hong Kong dollar.

Once the engine of Hong Kong’s retail economy, mainland tourists are increasingly flocking to places like Thailand and Singapore, which offer visa-free entry, unlike Hong Kong.

Chinese tourists have also been drawn to Japan, where the weak yen has led to a surge in international tourism.

In many parts of Hong Kong, including trendy hotspots like Central and Sai Ying Pun, boarded-up storefronts and restaurants are a common sight.

Lee of the Economist Intelligence Unit said he is cautiously optimistic about the future as the Hong Kong dollar will weaken along with the US dollar as the Federal Reserve cuts interest rates in the coming months.

Big box retailers like Sam’s Club, which has a Shenzhen location, are also adjusting to a more price-sensitive Hong Kong with plans under way by the US brand to launch an online shopping and delivery service for the city, the South China Morning Post has reported.

That is good news for Hong Kong residents who still prefer to shop locally and may be avoiding the mainland for personal reasons.

Jenny, a Hong Kong resident who asked to only use her first name, said she does not go to Shenzhen because she can do most of the same things in Hong Kong.

She said the hype around travelling to the mainland was mainly due to social media, but it was also blurring the distinction between China and Hong Kong – something the government is eager to do.

“I think it’s reasonable to do some travel in China if you’re looking for something you can’t do in Hong Kong, like they have some really stunning countryside or hiking,” she told Al Jazeera.

“But if you are doing some daily routine things like watching movies or having dinner, and you choose to go to China… it’s accepting that it’s really one country. The line, the border, the separation is getting blurred here.”

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