Hard Times for the U.S. – China Smuggling Racket

Hard Times for the U.S. – China Smuggling Racket

It’s getting tougher and costlier to smuggle Apple devices into China. The Chinese customs authority has told some U.S.-based shipping agents not to accept orders of iPads, and warned travelers to declare their gadgets at the border and pay a 10 percent import duty on electronics.

Reuters, via MacDailyNews:

Demand for Apple products, coupled with severe constraints on local supply, has created a thriving black market. A 16-gigabyte iPad bought in San Francisco for $499 — about $540 including tax — can be sold for more than $1,000 in Shanghai the next day. Apple sold more than 3 million of the devices — which now come 4G-ready with a sharper “retina” display — in its first weekend.

“You can pretty much determine when the first iPad arrives in China by monitoring the first flight out from the U.S. on launch day,” said an Apple employee who was not authorized to speak on behalf of the company.

iPad accessories makers, who do not get an advanced peek at new devices, also hire people to stand in line on launch day, as they have to scramble as soon as new iPads and iPhones hit the streets to reconfigure assembly lines and craft accessories that fit.

Reuters says: “But it’s getting tougher and costlier to smuggle the devices into China as the Chinese customs authority has told some U.S.-based shipping agents not to accept orders of iPads, and warned travelers to declare their gadgets at the border and pay a 10 percent import duty on electronics.

“Two small shipping companies that ship to China, BLZ Express and Global Courier Services, said they now refuse iPad shipments. Fremont, California-based BLZ posted a notice on its website this month saying: ‘Our clearing warehouses have stopped receiving iPad in accordance with a recent customs authority notification.'”

Also, Apple now simultaneously launches devices in multiple countries, therfore boosting availability, and depressing black market prices.

An electronics dealer in Oakland, California, said he struggled to break even this year, “This whole game is over,” the dealer complained. “There’s an overabundance of supply. The market’s flooded.”

Despite the expansion of inventory, demand still outstrips supply in China, as iPhones and iPads have become chic symbols of status to upwardly mobile Chinese, even as they are usually the last to be able to buy them from Apple Stores.

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