Hong Kong Residents Going North

In recent years, with the accelerated development of the Guangdong-Hong Kong-Macao Greater Bay Area and the intensification of economic and cultural exchanges, Hong Kong residents traveling north for consumption has become increasingly common. This trend reflects the robust development of mainland China’s economy and the continuous expansion of its consumer market, demonstrating Hong Kong residents’ pursuit of a diversified and high-quality lifestyle.

In 2023, about 53 million to 53.34 million Hong Kong residents traveled north, averaging 7.2 trips per Hong Kong resident based on the 2022 end-of-year population of 7.33 million. In 2024, particularly from March 28 to April 1, nearly 2.3 million Hong Kong residents traveled abroad, with approximately 86% heading to the mainland. According to statistics from the Hong Kong Special Administrative Region Immigration Department, during the combined Easter holiday and Qingming Festival period (March 28 to April 7), about 540,000 Hong Kong residents traveled north for consumption.

The trend of Hong Kong residents traveling north for consumption highlights their pursuit of high-quality living and a preference for the mainland China market. The consumption range has become increasingly diverse, from shopping and dining to high-end goods and cultural experiences. With the development of the mainland economy and the rising demand for quality consumption and services among Hong Kong residents, trends such as purchasing properties in mainland China reflect their trust in the mainland market. Mainland cities near Hong Kong, such as Shenzhen and Guangzhou, offer convenient transportation and various consumer choices, attracting many Hong Kong residents. The popularization of mobile internet and cross-border e-commerce has also made consumption more convenient. Furthermore, the trend of traveling north for consumption has expanded from a “living circle” to a “health circle,” promoting consumption upgrades and strengthening economic and cultural exchanges between the mainland and Hong Kong.

Major Drivers and Trends

1. Exchange Rate Factor Driving Cost-Effective Consumption: The fluctuation of the exchange rate between the HKD and the RMB is a direct driver for consumption by Hong Kong residents traveling north. The linked exchange rate system in Hong Kong causes the HKD to fluctuate with the US dollar, and the strong US dollar indirectly leads to the appreciation of the HKD relative to the RMB. Consequently, the same amount of HKD can buy more goods and services in mainland China, significantly improving cost-effectiveness. For instance, the exchange rate changed from 1 HKD to 0.8 RMB in February 2022 to 1 HKD to 0.93 RMB in May 2024, markedly increasing the purchasing power of Hong Kong residents, and encouraging them to consume in the mainland.

2. Upgraded Mainland Consumption Environment and Changed Perceptions: In recent years, mainland cities have made significant strides in improving consumption environments and service quality. This has gradually changed previous stereotypes held by Hong Kong residents about the mainland’s consumption market. With a changing perception of mainland product quality, Hong Kong residents increasingly recognize and accept the mainland’s consumption environment. Dining environments, service attitudes, and the variety and authenticity of goods in cities like Shenzhen have become highlights that attract Hong Kong residents. The high cost-effectiveness of mainland goods also appeals to Hong Kong consumers.

3. Improved Connectivity in the Greater Bay Area: The development of the Guangdong-Hong Kong-Macao Greater Bay Area, especially the improvement of transportation infrastructure like high-speed rail and the Hong Kong-Zhuhai-Macao Bridge, have greatly facilitated the northward travel of Hong Kong residents. Policy support, such as the “China T-Union Pilot Programme” launched by Hong Kong Octopus Cards Limited, further lowers the threshold for Hong Kong residents to travel north, making travel more convenient.

4. The Trend of Hong Kong Residents Purchasing Property and Retiring in Mainland China: The relaxation of property purchase policies by the Central government, especially the particular policies for Hong Kong and Macau residents in the Greater Bay Area, has led more Hong Kong residents to choose to buy properties in mainland China, particularly in Shenzhen, Zhuhai, and Zhongshan, for investment, vacation, and even retirement purposes. Relatively low property prices, continuously improving living environments, and convenient cross-border transportation in mainland China have become essential factors attracting Hong Kong residents to purchase properties.  This phenomenon not only reflects Hong Kong residents’ recognition of the mainland living environment but also indicates a deep integration of lifestyles between residents in Shenzhen and Hong Kong.

Major Challenges

1. Mobile Payment Issues: For Hong Kong residents who have already linked mainland bank accounts, the payment process in the mainland is relatively convenient. However, for those who have yet to link mainland bank accounts, real-name verification can be difficult when using WeChat, Alipay, and other mobile payment tools, possibly leading to inconvenient payments. Older Hong Kong residents may be more accustomed to cash transactions and have a lower acceptance of new payment methods like mobile payments. Moreover, mobile payments require certain operational skills and experience, which can be challenging and inconvenient for those unfamiliar with these tools. Additionally, payment security issues, such as ensuring a safe network environment and protecting personal information and payment passwords while using mobile payment tools, need special attention.

2. Transferring Funds for Mainland Property Purchases from Hong Kong Accounts: With the strengthening of economic and trade cooperation between mainland China and Hong Kong, more Hong Kong residents are choosing to purchase properties in mainland China. However, this process faces challenges, such as differences in mainland property market policies compared to those in Hong Kong, including purchase and loan restrictions, which can affect Hong Kong residents’ property purchases in mainland China. Additionally, property purchase processes and procedures differ between mainland China and Hong Kong. Hong Kong residents need to understand and adapt to the mainland’s property purchase processes, including understanding relevant laws and regulations, signing purchase contracts, obtaining property rights certificates, and information on property quality and management to ensure smooth property purchases. Transferring funds from Hong Kong accounts to the Mainland for property purchases also presents challenges, such as daily transfer limits and transfer purposes.

3. Differences in Medical and Elderly Care Systems and Cultural Adaptation: Firstly, there are differences in the medical systems between Hong Kong and the mainland. While Hong Kong’s medical standards are advanced in some areas, high medical costs can make it difficult for some Hong Kong residents to afford. For example, targeted drugs like Lorlatinib are significantly more expensive in Hong Kong, costing up to HKD 45,000 per month, compared to about RMB 16,000 in the mainland. In contrast, medical costs in the mainland are relatively lower, with some medications and treatments covered by insurance but requiring out-of-pocket expenses in Hong Kong. However, differences in medical systems and drug registrations may make it difficult to obtain certain medications in Hong Kong or lead to significantly higher prices. Additionally, Hong Kong residents may face challenges related to language communication, medical practices, and cultural differences when seeking medical treatment in mainland China. In terms of elderly care services, Hong Kong faces the challenges of an aging population, with tight public hospital resources and long waiting times for beds, sometimes over 16 months, while private hospitals are costly. In contrast, mainland China’s elderly care service market is relatively mature and has lower costs. The “Residential Care Service Scheme in Guangdong,” launched by the Hong Kong Government, allows the elderly of Hong Kong to retire on the mainland and enjoy mainland elderly care services. However, differences in living habits, cultural backgrounds, and social systems between Hong Kong and mainland China may cause some elderly from Hong Kong to feel uncomfortable.

4. Consumer Rights Protection Issues: There are legal and regulatory systems differences between Hong Kong and mainland China. Hong Kong consumers may not be thoroughly familiar with mainland consumer rights protection laws, making it difficult to fully understand their rights. This could lead to issues such as information transparency in shopping and service consumption, including product quality standards and return policies. If disputes arise, communication barriers stemming from regional, language, and cultural differences, coupled with different legal procedures, can result in high costs and low efficiency in rights protection, affecting Hong Kong consumers’ confidence and experience. Moreover, cross-border characteristics may lead to slow service response times and complex handling procedures for after-sales support.

Conclusion

The trend of Hong Kong residents traveling north for consumption is driven by various factors, including exchange rate advantages, improved consumption environments in the mainland, improved connectivity in the Greater Bay Area, challenges in local consumption scenes in Hong Kong, and the appeal of mainland property and elderly care services. However, challenges such as mobile payment issues, fund transfer difficulties for mainland property purchases, differences in medical and elderly care systems, and consumer rights protection need to be addressed. By overcoming these obstacles and enhancing the integration and sharing of resources between Hong Kong and the mainland, the economic and cultural exchanges between the two regions can be further strengthened, benefiting residents on both sides.