Hong Kong is being urged to increase its capacity to absorb tourists from mainland China, the Hong Kong Economic Journal reported Tuesday.
More public facilities and open areas will help solve the problem, the report said, citing Mo Pak-hung, an associate professor of economics in Hong Kong Baptist University.
As an open market economy, Hong Kong could face severe consequences if it adopts a closed-door tourism policy, Mo said.
Earlier, the government said it will cut individual visitor visas for mainland tourists by 20 percent to avoid congestion and ease pressure on public facilities.
Independent economist Lam Pun-lee warned that any such move could cost Hong Kong more than HK$40 billion (US$5.16 billion) in economic losses.
The impact will be felt across a wide range of industries from retail, transport, hospitality and catering to exports and imports, he said.
Bank of East Asia Ltd. (00023.HK) chief economist Paul Tang estimates the cost to the economy at 0.3 percent of gross domestic product.
The government should not impose restrictions on mainland tourists at a time when retail sales are falling, Raymond Yeung, a senior economist of Australia and New Zealand Banking Group Ltd., was quoted as saying.
The number of mainland tourists rose 7.8 percent in June, down from 13.5 percent growth in May.
Peter Lam, chairman of the Hong Kong Tourism Board, said Hong Kong should build shopping malls in border areas to divert mainland tourists.
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