Austerity measures for China's officials drag down growth, says NDRC
The clampdown on official’s luxury spending has led to a “significant drop” in high-end food and alcohol consumption, the 21st Century Business Herald wrote on Wednesday. Reporting on an internal meeting at the National Development and Reform Commission, the country’s top economic planning agency, last week, the daily said the drop in luxury consumption due to austerity measures would drag down overall consumption figures, even though ordinary consumption is growing at a normal rate.
In December, incoming President Xi Jinping called for austerity among officials in a much-publicised speech to Communist Party leaders. He outlined guidelines which aim at putting an end to special traffic arrangements for officials, lavish banquets, lengthy meetings, flower arrangements and unnecessary travel. By Chinese New Year, the price of a bottle of Kweichow Moutai, the trademark liquor for official banquets, had dropped by a third compared with last year to 1,560 yuan (HK$1,922). Turnover in high-end restaurants has fallen by 35 per cent in Beijing and 20 per cent in Shanghai.
As an unintended consequence, luxury restaurants in downtown Beijing have had to change their business model, the Economic Observer wrote on Tuesday. Restaurants that previously catered exclusively for officials, who cherished their sumptuous privacy, now cater to the public. Some restaurants abolished expensive seafood dishes. For fear of repercussions, officials now head to Beijing’s suburbs outside the fourth ring-road for their cherished banquets, the weekly reported.
Lower consumption figures do not mean officials have tightened their belts. Most banquets have simply disappeared from view, local officials in four provinces told the Post.