Authorities in the southern Chinese city of Shenzhen have put forward draft plans on “duty-free shopping zones” which they hope will target consumers in Hong Kong, Macao and other cities in the Greater Bay Area.

The local government of Luohu district said that it hoped to improve its existing duty-free shopping facilities and use tax exemptions to attract industry-leading businesses.

Luohu has been a longtime shopping destination for Hongkongers going to mainland China, but sales have suffered under the coronavirus pandemic. One of the most popular malls, Luo Hu Commercial City, almost turned into a ghost town, according to media reports.

Shenzhen recorded 866 billion yuan (US$133 billion) in consumer spending in 2020, a 5.2% decrease from the year before. The city’s economy grew by only 3.1% last year — bucking the global contraction due to the pandemic, but a far cry from the heady growth before the outbreak.

Luohu officials are in talks with duty-free sales groups to boost their development program, said Zhou Jianjun, head of the district’s commerce bureau.

The government of Yantian district in Shenzhen has announced competing plans to develop a cooperative shopping zone spanning 0.73 square kilometers near Sha Tau Kok — a border town between Hong Kong and Shenzhen.

The Yantian authorities are reportedly trying to seek approval from Shenzhen’s finance bureau, which they hope will accelerate development of its project at Sha Tau Kok.

Qianhai district in Shenzhen, which specializes in cross-border commercial development, is also eyeing opportunities to become a duty-free shopping hub.

Earlier this month, the Qianhai Authority signed a partnership deal with Shenzhen Duty Free Group, which it said will result in a new venture offering three types of duty-free stores and two types of sales platforms.

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