Thursday, May 03, 2007
Shopping scandal shocks Hong Kong
It is interesting how shocked Chinese tourists are at the thought of getting ripped off in Hong Kong.

These days the former British colony, which attracts over a million mainland tourists every month with its unique blend of Chinese and western tastes, is suffering from a tarnished image in China after a report last month on Chinese TV exposed how mainland tourists were duped into buying fake, overpriced watches and jewelry.

Beijing resident Wu Yelan told us she no longer planned to visit Hong Kong after her aunt got stuck paying top dollar for a cheap DVD player and fake watches. One tourist who dared to make the journey here said at Beijing airport she was "psychologically prepared" for her visit but planned to buy nothing.

Yet counterfeit DVDs, watches, jewelry, hand bags - you name it - can be found all over China.

So why the shock?

It is easy to dismiss their reaction as first time travelers' naivete but the implications for Hong Kong are potentially much greater.

Since Hong Kong returned to China 10 years ago, the city has thrived on its ability to abide by a higher standard than the rest of the country. International investors trust its financial markets. Companies believe in its courts.

There had been fears that Hong Kong would be overwhelmed by cheap competition from China in the core businesses that drove its economy. But, in fact, Hong Kong has maintained its edge because of its sterling reputation. Its well-regulated capital markets have been the number one choice for Chinese companies to raise funds. The professional management of Hong Kong firms have allowed them to stay ahead of their rivals. The city's reputation for retailer honesty is one of the reasons so many Chinese tourists choose to come here and shop, boosting the economy.

This is why the travel industry in Hong Kong has reacted so swiftly and strongly to the scam scandal. They are overhauling the compensation schemes for tour guides. They are thinking of extending their 14-day return policy to a whopping six months for mainland group travelers.

During this May "Golden Week" holiday, authorities are hoping to rebuild confidence in the retail sector.

Let's hope their strategy works for the good of Hong Kong.

Watch my report


From Eunice Yoon, CNN International Correspondent and Asia Business Editor
He who laughs last, laughs best. IT is amusing to learn that the Chineese are being scammed by their own kind, in the same way that Hong Kong has been scamming tourists since the 1960's. I love the irony and do not fee sorry for them
yeah, i don't know why the mainland tourists are so shocked. i remember shopping in shanghai a few years for a winter jacket. the merchant gave me an initial offer of about $200 US for a "Northface" jacket. I paid about $5.
This may have just been the result of a few bad apples that spoiled the bunch. Hong Kong retailers are generally honest and friendly. Anywhere you go in this world, there's always the chance that someone is going to try to rip you off.
good story. hong kong's ability to react swiftly and efficiently always amazes me. it's seems to be in stark contrast with the mainland turning a blind-eye to piracy and counterfeiting.
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