SOEs’ year-end gala hit hard by austerity drive
Print Edition
The “best employee” got a Porsche. The “excellent” few scooped 500,000-yuan (US$82,598) stocks and trips to Hong Kong. “Good” employees won cool gadgets like Note2 and iPhone 5s.
Generosity indeed at the year-end dinner of Qihoo 360, an NYSE-listed Chinese Internet company, which wowed netizens and left many public sector employees envious.
Traditionally, Chinese companies host “annual conferences” in the last lunar month of the year to celebrate their success by thanking staff and clients.
In previous years, the most lavish of such extravaganza were often the headline grabbing spectacles staged by China’s mammoth state-owned enterprises (SOEs) featuring sumptuous banquets in five-star hotels, swanky gifts and wall-to-wall celebrities.
This year, it was private firms which stole the show, while the otherwise high-profile SOEs had little to celebrate.
Employees of a number of big SOEs in Beijing said that “annual conferences” would either not be held at all, or would be receptions made “as simple as possible.”
The gifts for staff and clients have morphed from MacBooks, iPads and iPhones to chocolates, towels and even toothpaste, they said.
Tian, who works in a state-owned bank in Beijing, said that his bank won’t be hosting any annual conference at all this year, for the first time in many years. He recounted the good old days when the winner of the prize draw at the annual conference received a 60-gram gold bar and he, together with hundreds of colleagues, won a MacBook computer each.
This new austerity SOEs have suddenly adopted is a direct result of a campaign to cut extravagance and reduce red tape.
The ruling Communist Party of China has sworn to reduce waste, promote frugality and banned officials from pomp, ceremony, bureaucratic visits and unnecessary meetings.
An annual conference can cost hundreds of thousands yuan, including planning, lighting, venue hire, catering, services and gifts.
A Beijing-based state-owned building material company used to host annual conferences for officials, employees and clients not just in Beijing, but often flew guests to Yunnan or Fujian provinces, costing about 2 million yuan each time, according to the firm’s public relations manager.
This year they canceled such trips and held a conference call with staff and clients in other cities, said the manager.
The cooling of SOE enthusiasm for gala receptions could spell trouble for event planners and posh hotels.
Ke, an event planner in Beijing, said that orders for annual conferences had plummeted this year, especially from SOEs who used to be their major source of business around New Year. “It is an open secret in our business that SOE annual conferences were the most profitable as they are not price sensitive, but now the party is over,” said Ke.
A similar story was told in Shanghai. Banquets have fallen off by more than 50 percent, according to Jin Peihua of the Shanghai Restaurant and Cooking Association.
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