One Border, Two Prices: How Hong Kong Nurtures an Underground Smuggling Economy

Chinese Movie ‘The Crossing’ officially went on air around the world last Friday. While the movie may have a theme on youth, relationship, and identity recognition, the cross-border experiences described in the story revealed the larger implication of this existing Hong Kong-Shenzhen border. Since the 1950s, it has transformed from a line to cross for a better life, to a line to cross for more profits.

The Chinese name of the movie is with the literal meaning of ‘Passing Spring’, a jargon used by smugglers to suggest that they successfully pass through the border gate. The movie featured intensively on such matter, as the main character ultimately went into the smuggling businesses despite being a teenager attending local Hong Kong high school.

In 1997, Hong Kong ended its colonial era and was transformed into a Special Administrative Region under the People’s Republic of China. Despite the mainland claiming Hong Kong’s sovereignty by sending out troops on the island and started to take care of the region’s national defense and diplomacy affairs, a solid border remained in place between the former British colony and the mainland city Shenzhen. Despite the government pledging to integrate Hong Kong and Macau in the greater South-China region, that physical border, and the differences between mainland and Hong Kong residents, are still clearly visible.

By holding a Hong Kong Permanent Residence ID Card, one can be entitled to many welfare and privileges that those residing in mainland China do not have: From free health care to more visa-free travels, and to better opportunities in attending universities not only in Hong Kong, but also in the vast mainland. For those with a Hong Kong ID, the difficulty of getting into the best institutions in mainland China is much lower than that faced by their mainland counterparts for years.

The Hong Kong-mainland border used to be a lifeline for many refugees and migrants who faced political persecutions and severe poverties. The huge instability and struggling life made many residing in mainland China having the plan of escaping, to British-controlled Hong Kong not necessarily for some first world living standards, but for a chance of surviving with intensive labor and hard works.

Back then, it was a severe crime to cross the border without an authorized permit in China. And the border patrol personnel were told to shoot any border crossers who are attempting to flee mainland China. The tough restrictions forced border crossers to look for alternative routes, meaning that they need to travel on a more dangerous path to reach Hong Kong. They were forced to swim across the river in a cold dark night. With limited food and supplies, many died on their way to Hong Kong.

The British Hong Kong government started the ‘Touch Base Policy’ to accommodate the migrants fleeing the Communist regime in 1974. As long as these border crossers can reach Hong Kong city area before getting arrested by police officers, they will be entitled to a permanent Hong Kong ID and thus be recognized as a Hong Kong resident. Comparing to many immigration policies that different countries in the world adapt, this perhaps is the cheapest way of changing one’s life. At least, there is little or no money to be paid to government officials. The policy ended in 1980 after mainland China started its economic reforms in 1978. While human crossings may have come to an end, border-crossing economies and underground economies are far from being over.

Hong Kong is famous for its tax-free policies and its reputation as a free and open port. While China, on the other hand, attempts to be open to economic opportunities and international trades, the country remains to have many hurdles and obstacles to reach free trade zones to most nations. The result of these policies made prices of many import goods very different across the border. The price for certain things in Hong Kong would be much cheaper than the same product in China. In addition, Hong Kong may have many products that are not available in China, from cosmetic makeups to milk powders, mainland consumers are seeing Hong Kong as a harbor to secure affordable high-quality import goods for their own consumptions, and perhaps, for some profits.

The movie used the story of smuggling Apple phones to show the massive profits that the underground economy could generate. To save money to go on a trip to Japan, the main female character was once working on a minimum-wage job in a canteen. Yet comparing to taking the risk in bringing iPhones, that restaurant server job is simply far less profitable to pay for a luxurious trip to the Fiji mountains. The huge incentive lured the girl into organized crime and lured the girl to open that dark door on smuggling.

While the Chinese government always wanted to show that sign of national unity and building a harmonious society under the Communist Party regime, differences, privileges, and in many areas, inequalities exist between the mainland and Hong Kong. Despite having a higher Gross Domestic Product than Hong Kong, when it comes to residents’ welfare, social justice, and personal freedom, Shenzhen still has a long way to go to catch up with its southern neighbor, even after 40 years of economic reform.

It is the essential reason why some of the kids in Shenzhen are crossing the border every morning to commute to schools in Hong Kong. Their fate on the island remains tough, as they were caught right in the mainland-Hong Kong conflicts. In Hong Kong, some of them were called ‘little locust’, a derogatory term used by Hong Kong natives who blamed the limited the mainland migrants who took away their resources in education and health care.

The status quo is putting both the mainland and Hong Kong residents in a stigma. While those in the mainland were well aware of the inequalities that exist as they see the developments and social welfare systems in Hong Kong, they feel the system is unfair for their own well-being. On the other hand, some residents in Hong Kong were not happy about the changing environment in the self-autonomous region. As we almost reached the halfway mark promised by former Chinese leader Deng Xiaoping, Hong Kong is heading towards a direction that many do not appreciate or want to see. Rather, we are now seeing a Hong Kong with unresolved income inequality issues and a Hong Kong that is turning more like a mainland top-tier city rather than a free and open harbor.

Perhaps the gap between Hong Kong and top mainland Chinese cities are narrowing down, but up to this day, the differences remain significant and large. While iPhones are charged with different prices just across the border, there is always that incentive for smugglers to take that risk and ‘Passing Spring’ at all costs.

featured photo credit to hkthink