The southern Chinese city has been inundated by a stream of tourists from mainland China, who often pay short visits to the city to snap up daily necessities from baby formula to nappies.
The so-called parallel traders, who dodge hefty tariffs on their return, have become a source of tension in the semi-autonomous city leading to angry rallies where protesters clashed with police.
"Too many people are coming through the unlimited entry permits. (Imposing a limit) is a step forward," Michael Tien, a member of the National People's Congress, China's de facto parliament, told reporters.
Shenzhen residents can currently visit Hong Kong as often as they like with a multiple entry permit.
The paper said the cap could reduce the number of tourists by 4.6 million.
Last year, about 47 million mainland visitors streamed to Hong Kong, dwarfing the city's population of seven million.
A government spokesman confirmed that a proposal had been made to Chinese government, adding "any adjustment of the 'multiple-entry' policies will be announced by the Central Government".
Hong Kong only opened up to Chinese tourists in 2003 as part of a bid to revive its economy following an outbreak of SARS. Previously mainland Chinese were only allowed to visit as part of an organised tour.
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