Mainland restaurant takings plummet as party order cadres to tighten belts

High-end restaurants in the mainland are feeling the pinch as the Communist Party calls for less spending on extravagant meals before Lunar New Year.

The catering sector, one of the bright spots amid a slowing mainland economy in the past two years, has been hit recently by dwindling sales and squeezed profit margins, with pessimistic owners mulling whether to close their businesses.

According to a survey by the China Cuisine Association (CCA), 60 per cent of nearly 100 restaurants saw bookings cancelled recently, with one Beijing-based outlet reporting an 80-per-cent drop in sales.

"The survey found that business owners felt pessimistic about the outlook of the industry," the association said in a report. "They think it's necessary to readjust their business models to adapt to the new market conditions."

Communist Party chief Xi Jinping, in an apparent effort to fight corruption and stop the waste of public money, told government agencies, state-owned companies and non-profit organisations to put an end to extravagance.

His order has been seen by many government officials and company executives as a political directive, with millions of business dinners cancelled.