Housewives Smuggling Apple iPads, iPhones: Report

Prosecutors in China say more than a dozen housewives have engaged in smuggling Apple iPhones and iPads in order to avoid paying sales taxes.

A total of 26 people have now been charged with participating in a total of five distinct smuggling rings. Reports suggest the smugglers were supplying iPhones and iPads to Lanyo Shuma.com, one of the main electronics suppliers on Taobao Marketplace, China's version of eBay and Amazon.

Lanyou Shuma.com was thrown out of the marketplace in April, 2012, amid a scandal over alleged smuggling of the iPhone 4S from Hong Kong. (Source: reuters.com)

High Import Taxes Provoke Smuggling Rings

As part of its attempts to protect and boost local business, China places high import tariffs on many expensive electronics items. As a result, Chinese people who visit other countries can buy these goods far more cheaply abroad than in their own country.

But bringing such goods back to China with the purpose of selling them is illegal if people don't declare the items upon re-entry, and pay the required taxes.

This price discrepancy has caused significant problems. In particular, customs officials have found Chinese people buying iPhones in bulk in the US and smuggling them into China for resale.

It's an ironic practice, since the handsets are usually assembled in China and then shipped to the US for sale.

It's not just the high taxes that have encouraged smuggling of electronics into China.

The supplies of popular electronics are extremely limited in that country, and in some cases the newest devices reach Chinese stores much later than they go on sale in other countries.

Housewives Help Handle $80 Million Haul

The gangs currently accused of smuggling are alleged to have been shipping phones worth about 500 million yuan, which equates to US $80 million, from neighboring Hong Kong to China.

According to a local newspaper, about half of the suspects are Chinese housewives who regularly visit Hong Kong. On average, they return with 60 phones.

Reports indicate that these women are paid between 20 and 30 yuan for each phone they bring into China. That's just a few US dollars, and represents about one per cent of each phone's total value. (Source: zdnet.com)