China's austerity drive has merits beyond showing leadership

China's austerity campaign - unlike those in the West which have been triggered by budgetary shortfalls - is driven largely by the new leadership's determination to address what it sees as the slipping moral standards of the Communist Party elite.

President Xi Jinping's first move as party chief was to bar lavish banquets, red-carpet receptions, wasteful travel and other trappings of corruption that have stained the public's perception of the government.

We have to learn from China. Not everything, not all the time, but certainly on this occasion. It is a remarkable shift in Chinese politics. It goes beyond plain restrictions of the menu to a few dishes. It is not just about frugality for the sake of it.

It is pure leadership by example, having recognised that moral standards of the elites have declined. It is a bold move in the right direction. With rising income inequality, politics could evolve into a class struggle, not too different from the social circumstances of the civil war that raged between the Chinese Communist Party and the Kuomintang.

Politics aside, there are merits in a frugal government.

First, government expenditure will drop. There is less pressure to raise revenue through taxation on businesses and people. Nobody likes to pay more tax.