The so-called parallel traders typically travel to Hong Kong by train and stock up on everything from iPads to milk powder, taking advantage of lower prices and wider choice in the city and dodging hefty tariffs on their return.

Tensions between Hong Kongers and mainland Chinese have soared in recent years, fuelled by an influx of mainland visitors.

In the latest episode, residents of the border town of Sheung Shui mounted angry protests at the weekend against the traders, who they say are a nuisance.

Acting on the complaints, the city government announced late Tuesday it would step up border controls and ask the Chinese authorities to cancel the travel permits of mainlanders who are illegally engaged in commercial activity.

Although the former British colony was returned to Chinese rule in 1997, it maintains a semi-autonomous status with its own legal and financial system and mainland Chinese need a travel permit to enter the city.

"The (immigration) department will not rule out the possibility of refusing permission for these people to land in future," the government said in a statement.

The immigration department said it could not provide a figure for how many parallel traders cross the border each day, but a local newspaper, the South China Morning Post, puts the figure at up to 4,000 people.

Unease over parallel traders has been growing further still as Hong Kongers chafe at an influx of newly rich Chinese mainlanders, accusing them of taking everything from school places and maternity beds to baby milk formula.

Earlier this month mainland authorities shelved a plan to allow millions more Chinese to visit Hong Kong, after it was met with resistance in the city.