Friday, June 28, 2024
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Starting next week, Chinese tourists will have their duty-free shopping allowance in Hong Kong and Macau increased to 15,000 yuan (approximately $2,064), nearly double the existing limit. This adjustment aims to support the economic recovery of both cities, which have been impacted by the aftermath of the Covid pandemic.
The adjustment elevates the allowance to 12,000 yuan, up from the previous 5,000 yuan. Additionally, the current exemption from taxes on 3,000 yuan worth of purchases in duty-free stores at border locations will continue, as announced by the finance ministries of Hong Kong, Macau, and China.
This policy enhancement is projected to contribute around HK$17.6 billion ($2.25 billion) annually in consumer spending, with an estimated HK$5.4 billion boost to Hong Kong’s economy, according to government forecasts. The new limits will take effect on July 1, coinciding with the 27th anniversary of Hong Kong’s handover from the UK to Beijing.
Both Hong Kong and Macau have experienced a deceleration in their retail and tourism sectors, critical to their economies, primarily due to reduced expenditure from Chinese tourists. Hong Kong, in particular, has noted a decline in tourist numbers from the pre-pandemic year of 2019. This has intensified the pressures on this financial center, which is also grappling with political instability and the ongoing impact of Covid-related restrictions.
In Macau, known as the largest gambling hub globally, there has been a strategic pivot towards attracting the broader tourist market following regulatory measures targeting high-stakes gamblers. This shift has led to a mandate for the city’s six major casino operators to increase their investments in non-gambling amenities.
On the stock market, Sa Sa International Holdings Ltd., a leading cosmetics retailer in Hong Kong, saw its shares increase by as much as 3.7% on Friday. Shares of Chow Tai Fook Jewellery Group Ltd. also experienced a rise.
