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  • Sep 18, 2014
  • Updated: 7:15am
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PUBLISHED : Tuesday, 12 February, 2013, 4:27am
UPDATED : Tuesday, 12 February, 2013, 5:07am

New year banquet givers caught out by the new frugality

Developers and their tenants caught out by official belt-tightening ahead of Lunar New Year

BIO

Sandy Li joined SCMP as a property reporter in 1996, and was promoted to senior reporter in 2005 and deputy property editor in 2009. During her career she has won several journalism prizes, including the Citi Journalistic Excellence Award in 2011. She was first runner-up for the same award in 2010.
 

A year ago, mainland developers were busy wining and dining  government officials at five-star hotels before the Lunar New Year.

"We thought it would be business as usual this year,  and we reserved a sumptuous banquet," one developer said. "The menu included,  palm size abalone, Boston lobster sashimi and goose liver flown from Paris. But most officials rejected coming as Beijing called for simple meals and stepped up efforts to fight corruption." 

So he enjoyed this 100,000 yuan dinner with his family, as it was too late for a cancellation.

New Communist Party chief Xi Jinping has repeatedly indicated that the government will take harsh measures against lavish gift giving and corruption.

When Xi visited Shenzhen in December, he ordered a serving of simple and unadorned food, with no more than six dishes and one soup, and a buffet meal for accompanying officials.

With the new leaders discouraging the giving of expensive gifts, one property firm, which also owns and operates a shopping mall in the mainland, said sales of luxury watches in Beijing dropped significantly before Lunar New Year - a traditional peak season for the retail industry.

Designer-label watches with diamonds are a popular corporate gift, as more than 80 per cent of top government officials are male.

An international retailer of  luxury watches and jewellery has delayed expansion plans temporarily, as corporate gifts accounted for half its sales and it  needed to observe how Xi's ironfisted fight against corruption would affect the top-end retail market.

Although top government officials have shied away from banquets and giving expensive gifts, developers still need to entertain retired civil servants who set up companies offering all sorts of property-related consulting services.

Through their established guanxi with serving government officials, they help property firms clear obstacles when they seek license approvals for fire safety, construction permits and building plans. This group of "middle men", as the developer calls them, receive prepaid gift cards that carry a value of between HK$50,000 and HK$100,000. They can be used  in food and beverage outlets, department stores, supermarkets and even hair salons nationwide.

The boss of the property firm was told by retail tenants that the sharp fall in corporate gift buying was offset by a rise in shoppers from rural areas who've made a handsome profit from selling land or properties. 

But their appetites are more modest. "Instead of spending a million dollars for a watch or a piece of jade, this group of new customers  can afford to pay HK$4,000 for a pair of jeans," he said.

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This article is now closed to comments

scmpbeijing1
This story is full of dubious claims. Who was Xi Jinping eating with in Shenzhen that he only had to order six dishes? How does the author know what he ordered? The property owner owns a mall, but how does he know about the sale of watches? Why are diamond watches a popular gift because the majority of officials are males? Don't women also wear designer watches? Who is the international watch retailer that is delaying expansion? Is it only corruption that supports his business? Did he tell this to the reporter or did she hear it second hand? And who are the rural shoppers that have made money selling land? Not local officials????
 
 
 
 
 

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