Austerity dealing a blow to HK traders
Print Edition
In a narrow Hong Kong street filled with the tang of dried sea creatures, shopkeepers are blaming China’s recent corruption crackdown for falling sales of expensive banquet foods such as shark fin and abalone.
Such items have fallen off the menu since China’s new leadership came to power demanding austerity from officials as a means of reigning in graft and corruption.
Suppliers, restaurants and hotels in Hong Kong say the loss of appetite from the mainland has thinned out sales in a market looking for a portion of the estimated annual 300 billion yuan (US$49 billion) expenditure on state-funded banquets.
On Hong Kong’s “Dried Seafood Street,” the center of trade in dried delicacies, shopkeeper Leung Wing-chiu said sales were down 20 percent at a time when increased ethical awareness over shark fin and rising rents are pressuring business.
“Beijing’s frugality campaign has driven money out of my pocket,” said the 94-year-old, who is also the Dried Sea Food & Grocery Merchants Association president. “Demand from mainland buyers, especially hotels and restaurants, has shrunk a lot. This is particularly true for high-end goods such as dried abalone, shark fin and bird’s nest.”
Two catering companies listed on the city’s stock exchange cited the government’s emphasis on frugality as they issued profit warnings to shareholders last month.
The Jiu San Society, one of China’s eight non-Communist political parties, last year called for a curb on government spending on lavish banquets, which it estimated at US$300 billion a year. And in June, President Xi Jinping launched a “thorough cleanup” of the ruling Communist Party, vowing to target extravagance and waste.
Wong Hiu-wan, a shopkeeper selling bird’s nests, which have been used in Chinese cooking for centuries, blamed the cleanup campaign for a slowdown in his business.
“Now, we have to count more on local consumers, because orders from mainland hotels and restaurants have gone down dramatically,” he said.
Others say traditional foods were already losing their attraction. “The Chinese are turning their eyes towards Western and environmentally-friendly food rather than traditional banquet favorites like abalone and shark fin,” said Ren Guoqiang of consultancy Roland Berger & Partner.
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