The impact of Individual Visit Scheme to Hong Kong Essay

The impact of Individual Visit Scheme to Hong KongIndividual Visit Scheme has being launched for ten years in Hong Kong. This scheme helps boost tourism and brings benefits to Hong Kong economy and society.

However, the reality reveals that it also brings some negative impacts to Hong Kong. This paper examines both the arguments for and against Individual Visit Scheme in Hong Kong. Promoting retail and accommodation development is one of the major positive outcomes of Individual Visit Scheme. The business receipts in retail and accommodation services keep increasing in these few years. For instance, profits in retail and accommodation services have grown 24.9% and 19.6% respectively in 2011 and 9.

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8% and 13.8% separately in 2012 (Census and Statistics Department, 2013). This growth may be brought by the huge expenditure of mainlanders. In 2012, total expenditure of them on shopping is 82.7% of that of all visitors and total expenditure of them on hotel bills is 42.7% of that of all visitors (Hong Kong Tourism Board [HKTB], 2013a). These statistics exhibit that mainland travellers are the main consumers in retail and accommodation.

Consequently, Individual Visit Scheme is vital to the earning in retail and accommodation and it supports the development in these two aspects in Hong Kong. As well as the economic benefits, Individual Visit Scheme leads to reduce unemployment rate. Mak, Chairman of Hong Kong Retail Management Association (as cited in Hong Kong Sing Pao Daily News, 2013) observes that number of employees in retail industry has grown 17% since the launching of Individual Visit Scheme in 2013. Also, according to recent figure, unemployment rate decreased from 4.3% in 2010 to 3.4% in 2011 (Census and Statistics Department, 2012). This reflects that Individual Visit Scheme causes increase in demand of workers in retail industry.

As a result, citizens have higher job opportunities and thus unemployment rate in Hong Kong dropped.In addition to reduction in unemployment rate, Individual Visit Scheme provides more chances on communication and cooperation between China and Hong Kong. For example, 27 corporate clients from Beijing and Shanghai participated in China Corporate Fam.

They were invited to come to Hong Kong and experience the most recent MICE products and team building activities (HKTB, 2013b). Under Individual Visit Scheme, it is generally believed that participants come to Hong Kong in a more convenient way. Therefore, more mainlanders are willing to come to Hong Kong and there are more opportunities for them and Hong Kong people to communicate and work with each other. However, it is suggested that Individual Visit Scheme triggers inflation in Hong Kong.

There are some products that popular among the mainland travellers, such as Vita Lemon Tea and baby milk have noticeable increase in price level. Using a pack of six boxes of Vita Lemon Tea as an example, Consumer Council (as cited in Apple daily, 2012) discovers that the price of it rose 10%, from $13.5 to $14.9 between March 2013 and late September 2013.

This illustrates that the spending of mainland tourists on daily products lead to higher price level in Hong Kong. Apart from inflation, Individual Visit Scheme causes loss of local small and medium enterprises in Hong Kong. CBRE Hong Kong (2012) notes that Hong Kong ranked world’s top destination for luxury brands due to a large number of mainland tourists who demand for the benefit from the price variance between Hong Kong and China. CBRE Hong Kong (2012) also suggests that ‘riding on high demand and limited supply in prime areas, landlords are generally holding firm with high asking rents, which for some local retailers necessitates moves to secondary and even tertiary retail locations in search of more cost-effective space’.

Thus, it can be observed that Individual Visit Scheme probably attracts numerous luxury brands to construct branches in Hong Kong and this causes landlords requesting higher rents under shortage of shop supply. In consequence, local small and medium enterprises may not be able to afford the high rents and finally forced to end up their businesses. As a result, there is less retail available for local needs. In addition to the loss of local small and medium enterprises, Individual Visit Scheme results in competition of resources between the locals and the mainland visitors.

One of the serious issues is that even though Hong Kong parents travel to numerous remote districts, they are still not able to buy baby milk for their babies due to the occurrence of “parallel traders”, who purchase a considerable amount of products in Hong Kong and then sell in mainland (South China Morning Post, 2013). It leads to inadequate resources for local needs and it may deteriorate their living standard. There are both advantages and disadvantages to introduce Individual Visit Scheme in Hong Kong. It probably promotes economic prosperity and lowers the unemployment rate. It may even provide more chances for the mainlanders and Hong Kong people to communicate and cooperate with each other. Nevertheless, this scheme is likely result in inflation, loss of small and medium enterprises, as well as competition of resources between the ‘parallel traders’ and the locals. While it is necessary to improve economy, the living standard of citizens should not be neglected. To improve the situation, it is crucial for the government to take action and achieve balance between economy and society under Individual Visit Scheme in Hong Kong.

ReferencesApple Daily. (2012). 70% respondents complain that the launching of Individual Visit Scheme push the price level up, the price of baby milk and lemon tea rise 10% in half year. Retrieved from http://hk.apple.nextmedia.

com/news/art/20120929/18027599CBRE Hong Kong. (2012). Hong Kong Remains World’s Top Destination for Luxury Brands. Retrieved from http://www.

cbre.com.hk/EN/aboutus/mediacentre/mediaarchives/Pages/04252012.aspxCensus and Statistics Department. (2012). Hong Kong Annual Digest of Statistics. Hong Kong: Census and Statistics Department.

Census and Statistics Department. (2013). Table 094 : Year-on-year % Change of Business Receipts Indices for Service Industries and Service Domains Business Services Statistics Section. Retrieved from http://www.censtatd.gov.

hk/hkstat/sub/sp70.jsp?tableID=094&ID=0&productType=8Hong Kong Tourism Board. (2013a). A Statistical Review of Hong Kong Tourism 2012. Hong Kong: Hong Kong Tourism Board.

Hong Kong Tourism Board. (2013b). Market Summary June 2013 – Mainland China. Retrieved from https://securepartnernet.hktb.com/filemanager/intranet/mkt_sum/mkt_sum_en/mkt_sum_en_cn/MS_Jun_2013_-_Mainland_China_EN_0.pdf

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