Communist party cancels Chinese New Year celebrations to quiet public outrage over extravagance

Bars and restaurants in the Xicheng District, Beijing, China. Photo: ALAMY

Some of Beijing’s most sumptuous restaurants and hotels are facing an uncertain future after a new Communist Party austerity drive robbed them of their best customers.

Telegraph | Feb 8, 2013

By Malcolm Moore, Beijing

For years, many of Beijing’s finest establishments have paid premium rents to be close to government ministries and state-owned monopolies.

They were rewarded, especially in the month leading up to Chinese New Year, the country’s biggest holiday, with bookings for extravagant banquets for Communist Party officials.

High-end restaurants can rake in more than a third of their annual income in the month leading up to the New Year, which falls on Sunday.

Restaurants like Xiang E Qing, near a hub of government departments in Beijing’s Xicheng district, would normally be full to bursting and loud with carousing, drunk officials.

But this year, the order has gone out for all departments to cancel their celebrations and to demonstrate more humility after public anger that the Party was splurging some £60 billion, the equivalent of the official Defence budget, on “entertaining”.

A waitress said the restaurant had been subdued, “definitely more quiet than usual”. At Shiji Tanfu, which claims recipes passed down from the Qing dynasty, a waitress said that usually its tiny, but exclusive, set of nine private rooms would all be booked out. “But this year, we still have plenty of space,” she said.

Party planners have also seen their blue-chip government clients cancel their New Year parties.

“Our business has dropped by a third,” said a spokesman for Zhaoshun Cultural Communications, a major events planning agency. “Pretty much all the government departments have cancelled and we are thinking of changing our business model”.

Mr Wei, the manager of the Jiutian Heming party planning agency, said all his national-level state-owned companies had called off their parties. “The few that are going ahead have slashed their budgets pretty steeply”.

The gift hamper business is also down. At Tuangouba, a company that delivers nuts, olive oil and organic foods, a spokesman said government clients made up half their sales and that this year was looking bleak indeed.

Meanwhile, delegates to this year’s People’s Congress in Beijing will find that potted plants, flowers, fruit and yogurt have been banned. “We will have buffet lunches, not banquets,” said Liu Weilin, a spokesman for the city.

Perhaps the worst hit are the drinks companies, who make huge sums from lubricating government dinners. “We have had to discount heavily,” said one alcohol wholesaler to the Beijing Evening News. “My clients are mainly the army and the restaurants next to government ministries. But even the army has stopped drinking!” he lamented.

On the day that the army announced it was entering prohibition, the stock market value of Moutai, the most prestigious brand of Chinese spirits, dropped by 12.5 billion yuan (£1.25 billion).

However, enforcing the new austerity outside China’s capital has been more difficult. Xinhua, the official news agency, reported that local governments were still holding lavish parties inside their head offices or discreetly renting out function rooms inside hotels.

“Sometimes the food in these internal canteens is even more expensive than in a five-star hotel,” wrote the Beijing News. “Some big parties have also been broken up into lots of smaller ones, and registered under secret names,” it added.

Meanwhile, to comply with orders not to eat out, some ministries have apparently started building new staff restaurants.

“I was doing some work for a government department recently,” said Xu Hefeng, an employee of the China Real Estate Information Company. “They said since there are orders from the top not to hold banquets, they had decided to build a new canteen, which was astonishingly luxurious.”

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