30th January, 2013
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The shortage of formula powder has been haunting Hong Kong for quite a while, the pro-government bodies branded this situation with a positive tone – parallel imports of formula powder, which is in fact misleading. This implicated that formula powder is just another parallel imports from Hong Kong, hence we should tolerate the PRC visitors (for buying formula powder in Hong Kong in bulk). While the truth is a different story.
Parallel imports means goods not sold through a local agent. However, why do Chinese not order directly from the counties of origin of the formula powder overseas (Hong Kong does not manufacture formula powder)? Why do they buy from wholesalers and retailers in Hong Kong, or even let the smugglers earn commission from smuggling formula powder across the Hong Kong border (to Mainland China)? The answer is that Chinese traders want to spare themselves theimposed by the Customs, as well as the value-added tax of re-selling the goods, amounting to 17% of the profit. In short, the essence of the smuggling of formula powder is the same as the smuggling of electrical appliances, electronic parts, or tobacco and alcohol, which all belongs to illegal activities controlled by large scale , mothers and babies in Hong Kong and all over the world are victims who suffer from the shortage. It even affects the tax income of the . The huge amount of profit all goes to the pocket of these illegal organisations.
Nothing is new in the essence of the smuggling activities, while there is something new in how it is done. For example, electrical appliances and electronic parts are completely tax-free in Hong Kong, Hong Kong Customs combated the smuggling to China in a large scale in the 80’s and 90’s, as portrayed in the local films –hunting smugglers on their speedboats. This shows that if the Hong Kong government sets its mind on enforcing the law the problem could be resolved, but instead it turns a blind eye to the formula powder smuggling activities.
Hong Kong government does nothing, and the Chinese government colludes with illegal organisations. China Customs actually has a stringent regulation on the amount of formula powder each traveler that enters China is allowed to bring in via hand carry luggage – each person is allowed four to six tins of formula powder. However smugglers are found everywhere ignoring the regulations, bringing to China dozens of cartons of formula powder, while the officials at the China Customs do nothing to stop them – demonstrating a clear and serious corruption problem. How do they distribute such a huge amount of goods and develop points of sale without getting arrested by officials, and manage get away with the tax at the same time? Apparently these are all under the control of smuggling organisations which are protected by corrupt Chinese officials. To shelter people smuggling formula powder is in fact sheltering illegal organisations and corruption of Chinese officials. Sadly the Hong Kong media does not have the energy to spare to reveal these illegal activities, on the contrary, the media accused Hong Kongers for protesting against smuggling and labeled them as “intolerant”.
Contaminated milk products have been affecting the whole world. If we are to adopt the advice of right-wing economists, we have to demand the Chinese government to cancel the customs duties of the formula powder; if we are to adopt the left-wing economist’s advice, legislation has to be passed to enhance the monitoring of smuggling activities. According to the CAP 60 s31 of Hong Kong’s Import and Export Ordinance, the Chief Executive and Executive Council are empowered to pass a restriction order on the export of certain goods, for example, formula powder. A revision of this ordinance can also be made to extend the restriction to hand-carried luggage. Alternatively, since formula powder is a necessity, like rice, to the locals, enforcing Hong Kong law CAP 296, the Reserved Commodities Ordinance, will also help to ensure the local supply of formula powder.
Thedoes nothing and dare not do anything to deal with the problem. The current government has degenerated into the government back in 70’s, before the ICAC was set up, and that its sole focus is the PRC. The government turns a blind eye on anything relating to the corruption of Chinese officials, and even uses its own propaganda machine to accuse and discredit Hong Kong people. The corrupt attitude of the Hong Kong government makes us believe that it is now a truly colonial government — the colonial government of Communist China.
Kay Lam, a public affair commentator