New party rules hit Chinese restaurants

BEIJING - Shark's fin, bird's nest and abalone are gone from the offerings at Beijing's Xiang E Qing restaurant - a favourite of Communist Party cadres just months ago. Diners are now left with less exotic fare like shredded beef, pickled turnip and fried peanuts.

China's high-end restaurants have gone into crisis under leader Xi Jinping's campaign to crack down on party extravagances that have angered ordinary Chinese.

"We don't do high-end! We just serve family-style food!" a manager at Xiang E Qing told a visitor who wanted to see the dramatic transformation of one of the capital's most prestigious eateries.

The restaurant no longer has expensive liquors, minimum spending requirements or special fees for private banquet rooms where government officials and business executives once gathered.

Restaurants serving exquisite delicacies in banquet rooms long flourished under the lavish spending habits of public officials, who spent about 300 billion yuan (S$62 billion) a year on food and drinks in recent years, according to state media.

But new party rules since the beginning of this year curb spending on food and drink, and Mr Xi himself has set the example by having a work meal of four simple dishes and one soup.

China's dining market has hit its lowest point in more than two decades.

To cope with the new reality, high-end restaurants are diversifying services to include fast food and take-out, or offering modestly priced homestyle dishes and hot pots with wider, common-folk appeal.

The anti-waste campaign promoted in state media has not been aimed solely at party cadres, but also at members of the public, urging them not to over-order and to clean their plates.

"We are all remaking ourselves," said Mr Han Fang, a manager at another high-end restaurant in Beijing. "We need to adjust to whatever the policies the country has."

The Xiao Nan Guo restaurant in downtown Beijing specialises in elaborate Shanghai-style cuisine on white tablecloths with floral arrangements in private rooms behind thick, carved wooden doors. To attract more customers, it has revamped its menu to include new dishes priced under 90 yuan, said Zheng Yuming, the restaurant's general manager.

Its parent company, National chain Xiao Nan Guo Restaurant Holdings Group reported a 43.3 per cent decline in profits for the first six months of this year.

Xiang E Qing fared much worse. The national chain reported a 214 million yuan loss for the first six months of the year, a steep plunge from a net profit of 73 million yuan for the same period last year.

Mr Peng Xizhe, dean of the School of Social Development and Public Policy at the Shanghai-based Fudan University, said: "The high-end restaurants which rely on public money have to find some other ways to work it out."

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