Already reeling from the China mainland’s gift-giving clampdown and changing demographic of mainland visitors, Hong Kong’s beleagured retail sector now faces another potential blow. China’s government says it will cut tariffs on consumer goods in a bid to get local Chinese to spend more in the mainland.

Reports from China’s mainland say tariffs on imported consumer goods will be cut “in parts of China” by the end of June. The China tariff cut is aimed at increasing domestic consumption, shoring up economic growth and reducing the amount of money spent by mainlanders overseas.

The decision was made last week at an executive meeting of the State Council, presided over by Premier Li Keqiang, who is concerned that mainlanders are now not only buying luxury goods overseas, but everyday items as well.

The China Daily reports more duty-free stores will open at China’s borders and the individual allowances will be raised. The process of obtaining tax refunds will be eased – in tandem with a greater focus on catching smugglers.

Chinese now account for an estimated 40 per cent of luxury good sales in France and for 35 per cent of luxury sales in Italy, according to data from the HSBC.

Mainland retailers and travel specialists say it is difficult to predict the effect of the government’s move until a more detailed tariff schedule is released, along with duty free allowances and clarification on which product categories will be affected.