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The higher customs duties on imported luxury watch and cosmetics brands that took effect at the start of this year are expected to have little influence on regular shoppers, though "international shopping scalpers" could feel the pinch, experts said.

They also predicted that more mainland shoppers would do their shopping in tax-free Hong Kong to lighten the burden of the higher duties on the mainland as well as the new consumption tax that is due to take effect on April 1.

The move is aimed at enticing more people to shop here in China rather than going overseas to buy luxury goods and at preventing retailers from using so-called international shopping scalpers to carry goods into the country to be sold at mainland shops.

Duties on watches and golf products were raised to 30 percent from 10 percent at the start of this year, while taxes on cosmetics climbed to 50 percent from 20 percent.

"The adjustment is to link up with the changes to be brought about by the consumption taxes, and close the gap between purchasing at home and abroad," a statement on the Ministry of Finance's website said.

Watches currently sell for 10 to 20 percent more on the mainland than overseas.

Once the 20 percent consumption tax takes effect, the price difference is expected to increase to anywhere from 40 or 50 percent.

Chen Taifeng, a professor at the University of International Business and Economics, said more people would do their shopping overseas to avoid the higher costs, but would feel disinclined to carry large quantities of foreign goods into the country.

Insiders said the new duties would affect international shopping scalpers.

Wang Weiwei, a sales manager at Yali Cosmetics in Beijing, said the new policies would have a big influence on shops that rely on scalpers.

"The new policies will increase smuggling costs, which will cut into their price advantage," Wang said.

The General Administration of Customs last year required all travellers to fill in commodity application forms before entering the country.

"For commodities equalling or exceeding a value of 5,000 yuan ($625), the customs departments will levy a tariff according to relevant regulations," it says.

Officials at Beijing Airport Customs said they would determine whether goods being carried into the country were for private use. Any goods that exceed the standard amounts will be subject to the duties.

"Only people carrying a large number of luxury commodities will have to pay duties. It will not affect people who buy for personal consumption," An official surnamed Huang told China Daily.

Since the policy does not limit purchases for private use, more mainlanders are expected to do their shopping in Hong Kong to escape both duties and consumption taxes.

(China Daily 01/05/2007 page3)