The people of Fuzhou like their seafood. High-end restaurants in the coastal city, the provincial capital of Fujian, don’t skimp on the abalone in their soups. During Chinese New Year’s, which officially concluded last week, no dinner is complete without the free flow of Chinese spirits such as baijiu.
But luxury eateries didn’t do well in the early days of the Year of the Horse. Neither did supermarkets and vendors that sold fine seafood and liquors. In Fuzhou, sales for high-end seafood gift sets dropped by 50% year-on-year while fine spirit sales sunk 70%, according to the Ministry of Commerce.
After more than a year of party boss Xi Jinping’s anti-corruption campaign, which has gone after communist cadres with a taste for fine wine and pricey watches, the steep slump in sales of luxury products during the holiday shouldn’t come as too great a surprise.
Yet, while the best dining rooms had empty banquet halls during the seven-day break (revenues at Heilongjiang province’s best restaurants fell by 20% compared to last year), sales at mass-market venues surged by 20% in several provinces.
That was the tone for Year-of-the-Horse spending: Retail was strong but for more modest goods.
National retail and catering revenues during the weeklong holiday increased by 13.3% year-on-year. That was lower than last year’s 14.7% increase but analysts have pointed out that the official national holiday this year did not include New Year’s Eve, commonly a night for big spending. “People make big purchases and dine out on the Lunar Year Eve,” Lu Ting, China economist at Bank of America Merrill Lynch, said in a report, noting that the new holiday schedule could have a material impact on holiday spending figures.
The travel industry cashed in on the break. National tourism revenues soared by 16.4% year-on-year and air passengers increased by nearly 20%, according to China National Tourism Administration. Chinese have typically returned home for the seven-day break but increasing numbers are now taking the opportunity to travel abroad: 4.73 million overseas trips were recorded this year, an 18.1% increase over 2012.
Xi’s anti-corruption campaign could even be pushing along holiday spending, just not at the high end. As officials and businesspeople cut back on extravagant meals and gift-giving, luxury restaurants and hotels are lowering prices. “High-end restaurants and hotels are seen offering discounts and cheaper dishes” when their deep-pocketed patrons stop spending, Barclays Research said in a note. In this sense, the corruption crackdown is actually driving private consumption.
That probably wasn’t what Xi had in mind when he launched the campaign in late 2012. Nonetheless, it made for nice holiday shopping for members of China’s middle class, a group of people always looking for more bang for their buck and perpetually in the hunt for a good deal.