A mainland official revealed there are more than 3,000 parallel traders who cross the border many times a day to buy goods from Hong Kong.
Over half of them are Shenzhen residents who have multiple entry visit permits.
The whopping figure was brought up at a recent meeting between Shenzhen and Hong Kong customs authorities to discuss illegal cross-border exports.
"At least 3,000 to 4,000 parallel traders are in operation every day," said the official. "They make at least two return trips a day, but some can make four to five."
That means they make at least 2.2 million cross-border trips a year evading mainland import taxes.
With each person dragging a cart behind them, imagine how much stuff they buy every day.
In 2011, Shenzhen residents with multiple entry permits accounted for 6.17 million arrivals in Hong Kong compared with 28.1 million mainland tourists who visited the city.
And as most of these parallel traders hone in on Sheung Shui, the district closest to the border, prices of goods there have shot up 10 to 20 percent higher than nearby districts.
No wonder Sheung Shui residents protested this past weekend, fed up with all kinds of goods from milk powder to shampoo, toothpaste and even the yogurt-based drink Yakult costing more.
For example, a kind of Chinese medicine ointment used for joints cost HK$38 in Sheung Shui, but HK$28 in Taipo and Shatin.
Yakult, which is a probiotic drink that is actually too sweet to have any health benefits, and there are false claims that drinking it can increase the size of women's breasts, costs HK$10.20 a pack in Sheung Shui, but only $7.00 in Shatin.
While things cost more, it doesn't necessarily mean the stock is available either.
"The staff at the dispensaries will only serve mainlanders because they buy a lot each time. By the time I got to the counter, they would tell me it was all sold out and I had to go to other districts to get baby formula cheaper," a woman in her 40s said.
Many of these mainland traders buy the goods, bring them back and then sell them online on Taobao, the Chinese version of eBay. And because they promote that the products are from Hong Kong, they can make a healthy profit.
It's interesting the mainland authorities don't mind giving people who don't have a Shenzhen hukou or residency permit, multiple entry permits to Hong Kong and are not be interested in cracking down on parallel traders who aren't paying import taxes...
Imagine how much money they would rake in if they did?