Communist Party slams Hong Kong junkets for business delegations
Flagship newspaper criticises lavish investment promotions by business delegations and warns of punishment for anyone wasting public funds
People's Daily lashed out yesterday at the lavish spending of mainland business delegations when visiting Hong Kong, saying anti-graft officials would investigate and punish those who wasted public funds and "tainted" the government's image.
The unprecedented criticism of such investment delegations was seen as part of Xi Jinping's efforts to reduce extravagance by officials, calling on government units, state-owned companies and institutions to avoid expensive meals and entertainment.
"To those who dare break the disciplinary rules and make bad social impact, the investigations must be launched to punish the officials in charge," the Communist Party mouthpiece said.
Each year dozens of local and provincial government delegations travel to Hong Kong, hosting investment promotional campaigns to increase their foreign direct investment (FDI) figures, one of the major economic indicators used by the party to gauge officials' performance.
Often, the more underdeveloped the regions are, the more active their officials are in hosting the grand events to attract Hong Kong investors.
In May, six provincial-level delegations flocked to Hong Kong as they sought investors, followed by another three in June, the newspaper said.
In the process, they often stay at five-star hotels and hold expensive breakfasts, lunches and dinners for investors.
People's Daily said that the delegations would host breakfast meetings for Hong Kong entrepreneurs costing HK$1,000 per head.
Normally, however, the deals signed in Hong Kong are predetermined between the authorities and the investors after rounds of negotiations and discussions on the mainland, according to one source. So the trips are unnecessary.
Previously, such investment junkets were considered to be exempt from the clampdown on extravagance by officials because the trips were supposedly aimed at attracting foreign capital. But that appears to have changed.
"The authorities must cancel those delegations that are not necessary," People's Daily said.
"Some of the activities involving the delegations are an eyesore. The efforts can't really pay off. What's worse, the waste of public money hurts the government's image and should be resolutely stopped."
Investment delegations "were really just a show of the regions' rising wealth and wouldn't be of real help to attract investments," said Cao Hua, a senior manager at Tripod Capital. "Business people are practical, and they pay attention to only the feasibility of the projects."
Cao, who was invited to attend an investment promotional campaign by the government of Nantong , Jiangsu province, said Hong Kong's role as a gateway for foreign investors to the mainland had diminished in the past few years.
"The mainland is no longer short of capital and it's much easier for the governments to find investors at home as long as the projects are lucrative," he said. "Incentives such as preferential tax policies are not enough to convince investors now."