Hong Kong border town of Sheung Shui braces itself for influx of mainland traders

HONG KONG - Just one metro stop away from the Shenzhen border lies the town of Sheung Shui in Hong Kong’s New Territories.

Previously overrun by parallel traders buying medicine unavailable in mainland China or wanting to take advantage of Hong Kong’s tax-free status, human traffic in the area slowed to a trickle after China shut its borders amid the Covid-19 pandemic.

Three years later, unoccupied shop spaces continue to dot streets as businesses catering to such traders, including pharmacies and grocery shops, have shut, with landlords reluctant to lease out shop spaces for a lower rent.

But residents say this has meant less chaotic public spaces and a generally more pleasant experience walking through their neighbourhood.

On a recent Friday morning, at least one in every three shops on San Hong Street was shuttered, with property listings plastered across the metal grilles.

Also known as “Parallel Goods Street”, it was where traders from mainland China would take advantage of multiple entry visas into Hong Kong, filling their luggages with all manner of goods ranging from medicine, cosmetics and even baby formula unavailable in the mainland.

The sheer number of visitors resulted in a shortage of basic necessities in many of Hong Kong’s northern districts, including Sheung Shui.

The simmering tensions between residents and such traders – some of whom had a tendency to simply pack their bags on pavements – triggered protests in 2012 to “reclaim” Sheung Shui.

But the traders kept coming, with some 387,500 daily border crossings at Lo Wu and Lok Ma Chau – from where train passengers make their way to Sheung Shui – until the Covid-19 pandemic stopped it all.

With shops shuttering and plunging rentals, some landlords decided to use the opportunity to renovate while waiting for borders to reopen.

It was at one such shop, just a block away from “Parallel Goods Street”, that Mr Dannis Yeung, 22, decided to open Let It Be cafe in August 2021.

“It’s not just a cafe but also a community art space where we showcase the culture of the northern district,” he said. “Since the rental was affordable then, I thought, why not give it a try, and showcase our neighbourhood?”

He now pays about HK$30,000 (S$5,200) a month but worries that when his lease is up in June, his landlord might ask for more now that rent prices are climbing again.

The business, which has four part-time employees, “just about breaks even” every month, he said. He is also concerned that with borders reopening, there might be fewer customers.

“In the past year, we’d have customers on the weekend who come all the way from Tai Hang on Hong Kong Island, which takes close to an hour and a half.

“Now for the same travel time, they can go on holiday to Japan or Taiwan – why would they want to come here, especially if the parallel traders are coming back?”

But in the heart of “Parallel Goods Street”, entrepreneur Law Ting-fai is ready for mainland tourists to return.

He and his brother operate Be Water Mart since 2021, a shop that specialises in Hong Kong-made products.

“We thought, if people are sweeping up goods made from all over the world just to bring back to the mainland, why not sweep up some of our Hong Kong-made goods too?

“We have good, creatively-made products. So I suppose we’re here to try and make a point,” he told The Straits Times.

The brothers have a second outlet in nearby Tai Po, which also doubles as an exhibition space.

Just across the road at BB Beauty, which sells cosmetics from Aesop, L’Occitane and even Estee Lauder, a shop assistant told ST she worries about how many customers will return.

“We tried sending things across the border – acting like an online shop – but sometimes there would be delays.

“Our customers have been able to find alternatives on (e-commerce platforms) Taobao, Pinduoduo and even Weipinhui, so they don’t really need us any more,” said the employee, who gave her name as Zhen.

In the weeks since ST visited, local merchants say tourists are gradually returning, with trolley bag-wheeling visitors and long queues once again a common sight.

Residents are full of anticipation – and trepidation.

Postal worker Rico Lau, who has lived in the area all his life, said many of his childhood friends have moved out because the daily commute had become a struggle.

“Some days I had to wait for four or five trains (to come and go) before I could get (on one) to work in the morning – it makes you frustrated for nothing,” he said.

“At least in the past few years, things have improved, and the government has also widened the pavements so it’s easier to walk. But this is Hong Kong, things can turn (bad) very quickly,” he said, using an expletive.

Local legislator Gary Zhang, who was elected in 2021, said he and his team are monitoring the transport situation and will work with law enforcement in case more rowdy crowds return.

In the past three years, some pharmacies have been replaced by small locally-owned businesses, especially grocery shops, after the pandemic forced people to cook at home more.

“The thing about such pharmacies here is that they don’t really bring any benefit to our residents; the people who own the shops don’t live here, and maybe only some of them hire people who live here,” he told ST.

“Perhaps we need to look at other methods, like duty-free zones or increased border crossings to redirect the flow of people because this is untenable in the long run.”