DISCUSSION Scaling Down Corruption

by Yolanda Villafuerte _______15th February 2013

Chinese New Year celebrations in the UK may have been confined to a single parade on Sunday, but they are just now snaking their way to a close in Asia, with Hong Kong’s financial markets reopening on Thursday and Chinese markets opening next week.

Chinese New Year is the big Chinese celebration – think of it as Christmas, New Year’s Day and every other holiday that involves family, food, and presents rolled into one. Usually it is marked by over the top fireworks displays – which take place both on the official level in the cities and in people’s back gardens – lavish banquets, copious amounts of food and fancy gifts.

This year, however, things were a little bit different. For one, the firework displays that took place country-wide were smaller, and those that did go ahead received almost as much applause as they did criticism. Hatred of fireworks is not unheard of, as they are blamed yearly for causing fires and newspapers often run stories of people maimed by ill-placed sparklers. However, this year criticism came from a different angle: the negative effects firework displays would have on the already-bad air pollution in major Chinese cities.

These worries were primarily voiced online. “For the sake of children and elderly parents, we are not going to let off fireworks this New Year. Let’s all play a part in giving our loved ones some fresh air to breathe” said China Central Television’s (CCTV) Finance Channel in January, a message that had been reposted over 30,000 times on Sina Weibo. The Beijing Daily also carried appeals from residents asking others to not hold firework celebrations, and Beijing Evening News stated that on January 28th they received more than 100 calls from Beijing citizens advocating the restricted use of fireworks.

Peopled voiced their criticisms with their wallets too: sales of fireworks fell 37 percent over the same period last year, from 410,000 cartons to 260,000, according to Xinhua News Agency.

However the biggest difference was not in fireworks, it was in how people dined. Many companies and government bodies scaled back their New Year celebrations significantly, which led to fewer large banquets being held and many reservations being cancelled. The China Cuisine Association reported that as many as 60 percent of restaurants suffered cancelled reservations, with most cancelations occurring in high-end establishments.

The cancellations of so many reservations has little to do with talk of austerity or the effects of economic downturn that have been heard in other countries; it is more to do with the top-down attack on corruption – or at least outward signs of it – that began officially in October 2012. Civil servants have been told to adopt a “frugal working style”, which does not include accepting gifts or throwing extravagant banquets.

This crackdown on corruption and conspicuous spending is clearly being taken seriously. In December the Central Military Commission issuing new rules banking luxury banquets and alcohol at receptions, as well as red carpets and a host of other trimmings. China’s State Administration of Radio, Film and Television also issued orders requesting that all television networks cut ads that promote gift giving. Even the spring festival gala on China Central Television – which usually features incredibly lavish props and corny performances – was also noticeably scaled back, for although it did feature singer Celine Dion singing in Chinese, it used the same stage as last year.

In the same vein, China introduced income-distribution guidelines in a speech by China’s State council in early February that stressed the need for greater equality. They vowed to implement new taxes on the wealth, put in place improved welfare programs for the poor, and called for state companies to hand over an additional 5% of their profits to the government.

Though most of the orders have not come with specified penalties – the plan for income-distribution guidelines was noticeably without a timeline – there have already been casualties. The most obvious, of course, was the spectacular fall of Chinese politician Bo Xilai who is currently awaiting trial and accused (among other things) of taking massive bribes and abusing power. There have also been crackdowns on officials who have amassed property fortunes, and more recently Zhou Shaoqiang, manager of state-owned company Zhuhai Financial Investment Holdings, was suspended after holding a luxury banquet in January that cost close to £4,000. He is now said to be undertaking a period of ‘self-reflection’.

The sensitivity over anything that raises suspicions of corruption have also hit luxury brand, alcohol and jewellery sales particularly hard, as one-third of the luxury goods sold on in China are estimated to be bought as gifts, one tenth for bribery. With some Chinese shoppers now choosing to wear more understated displays of wealth, the demand for branded luxury handbags has waned. Shares of high-end jewellery and watch retailers slumped in early February, and even though spirits were heavily discounted up to fifty percent in the run up to New Year, sales of high-end were not half as good as they were last year. State-run spirits producer Kewichow Moutai Company has seen its stock plunge 20% since November.

For some, clearly the Year of the Snake has not gotten off to an auspicious start.

Sarah Primmer is a research volunteer at Tomorrow’s Company. She is currently studying Chinese and History at SOAS.