Smuggling Concerns Grow in Wake of Apple Release

Apple’s iPhone 6 Plus are being sold in mainland China at nearly three times their Hong Kong retail price, prompting renewed concerns about illegal parallel trading across Hong Kong-Chinese borders from locals.

The North District Parallel Imports Concern Group, a Hong Kong non-governmental activist group that documents and protests illegal trade, claims traders are illegally buying mass quantities of the highly prized mobile phones and smuggling them back into China, according to their Facebook page. They include links to videos of fights breaking out over iPhones, arguing that the surge of parallel traders create a nuisance for residents, who see reduced access to affordable goods and public transport.

Parallel traders from China make frequent visits across the border, sometimes several times a day, in order to take advantage of Hong Kong’s tax-free goods and comparatively weak currency. They smuggle the supplies back into China, avoiding import duties, to resell at large profits.

While commonly sought-after items include food, luxury goods, and infant baby powder, recent rumors that Apple’s latest smartphone may not sell in mainland China until 2015 has created a highly-priced black market for motivated buyers.

Taobao, China’s largest online retail platform, already has several vendors offering the iPhones at huge markups. One seller featured an iPhone 6 Plus with 128GB of memory for 19,100RMB, or $HK24,100, almost triple the price advertised for the same phone on Apple’s website.

“I really want to buy one,” said Wang Song, a resident of Shenzhen. “I would pay 14,000, but my housemates would pay much more. Because it’s very limited, many people want to buy it right now.” Song says he is aware of traders bringing large suitcases filled with iPhones over the border, though there is a limit of two phones per customer. “I am not sure how they do this, maybe they have friends or pay someone.”

Ying Ma, the host of a popular web-based mother and baby program in Hong Kong, posted allegations via the Passion Times HK blog that her infant son was injured in an altercation with a trader smuggling iPhones. After reporting the incident to police, the man was allegedly detained, identified as a mainland Chinese resident, and the phones confiscated.

Although there have been calls this year for measures to control parallel trading activity no changes have been made yet to the multiple entry visa, which allows holders to cross the border as many times as they like. While customs officers at the Lo Wu border crossing do their best to be vigilant, some say they simply aren’t equipped to deal with the number of people crossing back and forth. Jesse Beam, an American teacher who lives in Shenzhen, describes the overcrowding typically observed at this crossing. “On a Saturday morning, the line gets so backed up you can’t even get to the Foreigner line. It’s just a tight crowd of people. Most have them have empty suitcases, and they’ll get off at that next MTR stop [Sheung Shui]. There’s no way to stop them all, those numbers are too high.”

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