In expensive Hong Kong, residents flock to China in search of cheaper meals and shopping | Economy

Hong Kong, China – Mimi Lau, a Hong Kong resident, regularly goes to Shenzhen to have a meal with friends or shop at 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 her hometown’s popular shopping and dining areas, but it is also very cheapest.

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

“It’s very convenient and you don’t need to bring any money with you. Everything is electronic payment.”

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

Hong Kong residents made 53 million trips across 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 saw a record 9.3 million departures, mainly to mainland China, leaving nightlife and shopping venues virtually empty during the Easter holiday period.

For many Hong Kongers, the attraction of Shenzhen is a superior array 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 filled with massages, affordable meals and fun activities like go-kart racing.

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

Hong Kong, a former British colony that maintains a distinctly more capitalist way of life than the Chinese mainland, has long been far richer than other parts of China, although the gap has narrowed amid the rapid 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 Board, giving the city’s residents superior purchasing power across the border.

But Hong Kongers have recently discovered that their money goes even further due to the favorable 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 purchasing power rising in China, Hong Kong residents are spending an increasing share of their income across the border on everything from cheaper medical services to hunting for bargains at Shenzhen’s new Costco, according to with Chim Lee, senior China analyst at the Economist Intelligence Unit.

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

“Lower prices on the continent – ​​helped by the relative strength of the US dollar…, growing familiarity with the continent’s lifestyle apps and better customer services have facilitated this trend,” he added.

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

Although the trip requires visitors to go through immigration, the process is usually quick outside of major holidays.

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

Late last year, Beijing relaxed visa requirements for foreign residents in Hong Kong, a considerable portion of the city’s population. They can now apply for a six-day visa to enter Guangdong province, where Shenzhen and Guangzhou are located. 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 to the Alipay payment app and spend up to US$2,000 without registering their identity, although certain functions remain inaccessible without registration.

Still, Hong Kong maintains some advantages over the mainland.

Although the distinction between Hong Kong and mainland China has blurred amid a widespread 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 bit of psychological apprehension when you cross the border. You know you need to change your SIM card settings. You are no longer receiving Facebook and WhatsApp,” she said.

“[But to] Be honest, the price or value for money offered by this temporary suspension of connection with 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 mostly 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 an attraction for mainland Chinese seeking greater economic opportunities and a more open social and political environment.

Hong Kong also attracted millions of Chinese tourists every year who could access brands and products not available on the mainland.

COVID-19 has brought cross-border traffic to a standstill as both the mainland and Hong Kong have imposed some of the world’s most severe restrictions on travel and freedom of movement.

Neither has fully abandoned “zero COVID” restrictions until the end of 2022, long after most of the world has 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 businesses have fled the city since sweeping national security laws were enacted in the wake of massive pro-democracy protests in 2019.

The city is also struggling to attract 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, tourists from the mainland are increasingly flocking to places like Thailand and Singapore, which offer visa-free entry, unlike Hong Kong.

Chinese tourists have also been attracted to Japan, where the weak yen has led to an increase in international tourism.

In many parts of Hong Kong, including hot spots like Central and Sai Ying Pun, closed shops 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.

Major retailers such as Shenzhen-based Sam’s Club are also adjusting to more price-sensitive Hong Kong, with plans underway by the US brand to launch an online shopping and delivery service for the city, reported the South China Morning Post. reported.

This 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 use only her first name, said she won’t go to Shenzhen because she can do most of the same things in Hong Kong.

She said the excitement around traveling 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 keen to do.

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

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