Busi­ness as usual

China Daily (Canada) - - HONG KONG -

The slide of the yuan may have made trav­el­ing to and shop­ping in Hong Kong more costly, but main­land of­fi­cials and po­ten­tial visi­tors still be­lieve its im­pact is not as dra­matic as made out to be.

The main­land cen­tral bank on Aug 11 low­ered the yuan’s daily mid-point trad­ing price against the US dol­lar by 1.86 per­cent, with a sim­i­lar move the fol­low­ing day, which saw the yuan pushed down by another 1.62 per­cent against the US cur­rency.

The moves also placed the yuan in a weaker po­si­tion against the Hong Kong dol­lar, which is pegged to the green­back. On Tues­day, the mid-point rate had risen to 0.8254 yuan per Hong Kong dol­lar from 0.8036 on Aug 11, ac­cord­ing to data from the Bank of China.

How­ever, Hong Kong of­fi­cials do not seem un­duly wor­ried about the im­pact of such de­pre­ci­a­tion.

Yiu Si- wing, a law­maker rep­re­sent­ing Hong Kong’s tourism sec­tor, re­cently said that neg­a­tive in­flu­ence on the tourism in­dus­try would only emerge when the yuan falls by as much as 10 per­cent.

The com­ple­tion of the Hong KongZhuhai-Ma­cao Bridge, the Guangzhou-Shen­zhen-Hong Kong Ex­press Rail link and other big public projects, in­clud­ing the West Kowloon Cul­tural Dis­trict (WKCD), over the next few years would see more tourists com­ing to Hong Kong, he noted.

Ex­pected com­ple­tion dates for the bridge and rail link are 2017 and 2018, re­spec­tively, and 2020 for the first phase of the WKCD.

But Yiu also warned that in­ci­dents like demon­stra­tions against par­al­lel goods trad­ing would dampen visi­tor en­thu­si­asm and urged the gov­ern­ment to help ad­just Hong Kong peo­ple’s at­ti­tude to­ward visi­tors. Hos­tile protests against par­al­lel trad­ing, es­pe­cially at bor­der cross­ings, have put off many bona fide main­land tourists from vis­it­ing the SAR.

Fall­ing visi­tor num­bers is al­ready hav­ing an im­pact on the lo­cal re­tail sec­tor, which has seen sales, es­pe­cially for lux­ury items, drop sig­nif­i­cantly. The num­ber of over­all tourists vis­it­ing Hong Kong fell by 8.4 per­cent on-year last month, ac­cord­ing to the city’s Travel In­dus­try Coun­cil. Across the bor­der how­ever, Shen­zhen res­i­dents with “one visit per week” per­mits to visit Hong Kong, scaled down from the ear­lier mul­ti­ple-en­try per­mits, say the scale of yuan de­pre­ci­a­tion so far is not enough to af­fect shop­ping de­ci­sions.

“The ad­di­tional cost caused by a weaker yuan when shop­ping in Hong Kong is very lit­tle in­deed,” said Han Zhengyi, a 32-year-old of­fice clerk in Nan­shan dis­trict.

“For a prod­uct worth HK$1,000, you only need to pay 20 yuan ($3.12) more now. That is still bet­ter than buy­ing it on the main­land, where the price may be 1,000 yuan (or about HK$1,210 at Thurs­day’s rates).”

Han’s col­league Zhan Yan agreed. “The de­pre­ci­a­tion of the yuan will have a big­ger in­flu­ence on those in­tend­ing to buy big-ticket items in Hong Kong, like jew­elry, lux­ury bags or elec­tronic de­vices. For those who shop for daily ne­ces­si­ties like me, the ex­change rate change is not a ma­jor source of con­cern,” she said.

A shop­keeper at a Shen­zhen store selling goods im­ported from Hong Kong said the slide of the yuan has not af­fected busi­ness.

“We will ad­just prices of our prod­ucts ac­cord­ing to the vari­a­tion in the ex­change rate be­tween the Hong Kong dol­lar and ren­minbi. So far we have not no­ticed any change in busi­ness,” he said.

How­ever, the price tags tell a dif­fer­ent story. Many items on the shelves have been marked down —prices of sev­eral brands of baby milk pow­der, for ex­am­ple, have gen­er­ally been re­duced by 10 yuan each.

Mean­while, the fall­ing yuan has spurred more Shen­zhen res­i­dents to buy prop­erty in Hong Kong, as per­cep­tions of eroded value of main­land prop­erty make in­vestors eye bet­ter re­turns across the bor­der. A buyer from Shen­zhen re­cently splashed out as much as HK$55.1 mil­lion to buy five units at the newly opened Cen­tury Link residential pro­ject in Tung Chung.

At Stars By The Har­bour in Hung Hom, another pro­ject launched last week­end, more than 10 per­cent of buy­ers were from the main­land, ac­cord­ing to media re­ports.

Shen­zhen res­i­dents say a slid­ing yuan may have made pur­chases in Hong Kong slightly costlier but it is still cheaper than buy­ing on the main­land.

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