China’s officials go underground to defeat moves to curb their lavish feasting

Officials go underground to defeat moves to curb their lavish feasting

Wednesday, 27 March, 2013, 12:00am

Keith Zhai and Minnie Chan

Officials dodge Xi Jinping’s curbs on luxury by turning canteens into five-star restaurants and meeting businessmen away from public gaze

Xi Jinping’s call for officials to cut down on extravagance and feasting appears to have hit a snag at the local level.

Officials from four different regions have told the South China Morning Post that the banquets have merely gone underground, where they are now being held in much more lavish style.

Two officials in Fujian province said many canteens in government departments had been renovated and had hired chefs from the region’s finest restaurants after outside banquets were banned as part of the Communist Party leadership’s anti-corruption and austerity drive.

“Such renovation is not only happening in Fujian, but in many provinces around the country,” one of the officials said. “There are plenty of ways at the local level for cities to get around rules from the top.”

There are plenty of ways at the local level for cities to get around rules from the top.

The official said the renovated canteens were as luxurious as five-star restaurants, with private rooms and fine-dining chefs, and there was “no need for officials to go out to dine under the eyes of the public because everything can be done within the government compound”.

The other Fujian official said that a lavish banquet was a must when people wanted to get things done.

“The call for austerity is too harsh … it is typical communist style that a movement can appear all of a sudden and require all party members to learn the unselfish and noble spirit of revolutionary ancestors.

“But who can really do that in today’s China?” the official said. “We are forced to go underground. And as long as we don’t get caught by the mass media or ordinary citizens, the leaders won’t punish us.”

Another reason for the underground activity is that if a government bureau fails to spend its entire annual budget it will receive less money the next year, said a person connected to the Industry and Commerce Administration in Guangzhou.

“We can’t spend money outside of the bureau, and we can’t dine outside,” the person said, adding that renovation was an easy way to make sure the annual budget was used up.

Mainland media have reported that takings at upmarket restaurants declined during this year’s Lunar New Year, normally a peak season for banquets.

Communist Party general secretary Xi, who succeeded Hu Jintao as president on Thursday, has warned many times over the past few months of the risk of unrest unless graft is tackled.

In a panel discussion last week at the National People’s Congress, Xi told officials to draw a line on how far they could go in their association with businessmen.

Many officials have simply changed the preferred venue for meetings from public restaurants to government canteens, while others have taken to visiting businessmen’s houses.

People invited to private banquets in two different provinces described how houses had been turned into venues where officials could dine and enjoy saunas.

One house in Jilin province, owned by the boss of a local food factory, looked like an understated country home, but the interior was decorated to first-rate standard in January. The owner permitted only close acquaintances to enter and he had hired the head chef from a top local restaurant.

The house also had fully equipped baths, where guests could take a sauna and shower.

An official told the person invited to the banquet that more officials were willing to dine at the house since the launching of the anti-corruption drive because they felt safe and all the food and services were free.

Another witness from Hebei province told the Post a similar story.

Li Jiang , a vice-chairman of Hunan’s provincial people’s congress’ standing committee and an NPC deputy, said on the sidelines of the NPC session that lavish banquets were a longtime tradition that would take some time to eradicate.

“It is not the kind of problem that can be fixed in a short time,” he said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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