It’s farewell to the golden chopsticks; President Xi Jinping has inaugurated an era of Chinese abstemiousness

January 21, 2014 3:26 pm

It’s farewell to the golden chopsticks

By Patti Waldmeir in Shanghai

President Xi Jinping has inaugurated an era of Chinese abstemiousness, writes Patti Waldmeir

This is normally the season to eat, drink and give away iPads in China. Before lunar new year, companies, institutions and government departments traditionally stage lavish parties in bling-bedecked venues where every raffle ticket is a winner. Think office Christmas parties, taken to another level.But now the decree has come from on high: no more golden chopsticks in the iron rice bowl. President Xi Jinping has inaugurated an era of Chinese abstemiousness and civil servants have been ordered to stop taking bribes, stop wasting money and stop talking nonsense at endless meetings. They have even been told they cannot get up from the table until they have cleaned their plates; talk about a nanny state.

o this is no longer the season to be covetous: state-owned enterprises and government departments have either cancelled their new year parties – often for the second year running – or radically scaled back the prizes on offer. One replaced the top prize of an iPad with toothpaste.

Of course, no one will shed a tear for corrupt officials who are no longer being kept in the style to which they had become accustomed – with gifts of everything from villas to dancing girls, from businessmen seeking lucrative government contracts or approvals.

But they are not the only ones hit by the new scourge of Scrooge: lots of ordinary pen-pushers are suffering too. They were not worth bribing before because they were either too junior or in the wrong department. Now they are not getting the other perks of office either: everything from mooncake coupons

at the mid-autumn festival, to grocery gift cards at Chinese New Year, perks that they counted on to boost their meagre civil servant salaries by 10, 20 or even 30 per cent a year.

Joanna Lu, a junior civil servant in Shanghai, reckons she has seen a Rmb20,000 ($3,300) annual salary cut as a result of the anti-extravagance campaign – but for no clear reason. Previously she received one-off payments totalling 10-15 per cent of her income, often on the occasion of some big event such as the Shanghai World Expo – whether or not she had done any extra work in connection with the event.

Mr Xi did not tell her bosses to stop paying bonuses (which were not connected with corruption). But neither did he tell them it was OK to continue. So the days of perks are over. The departmental new year party was the same: no one said to cancel it but, equally, no one said to go ahead. So Ms Lu’s department will be celebrating in the canteen.

Unfortunately for her, the fancy food has been called off, but not the staff skits that are a new year tradition. Ms Lu and her colleagues have been told to write a review of their annual work, in verse, and then perform it at the gathering. “Kill me 100 times,” she says.

Ms Lu thinks local officials may be misinterpreting what Beijing really wants from them. “Xi Jinping just wants to cut luxury spending, but people beneath him want to flatter him and so they do even more,” she says. And the pain may not be over yet. On Monday Mr Xi announced that the anti-excess campaign will henceforth focus particularly on low-level officials – because they are the ones closest to ordinary people.

Doubtless there is still plenty of fat to be cut from the Chinese civil service – though hopefully it need not all come from Ms Lu’s pay cheque. But the abstemiousness campaign is having its fair share of unintended consequences too. One senior state banker, faced with too much leftover food on the lunch table recently, had to use his imagination to comply with the “clean your plate” directive: he told a Financial Times colleague that eating just the skin off a Peking duck qualified as finishing the dish – because the skin is the best part.

And sellers on Taobao, China’s online marketplace, are offering a number of creative ways to get around the gifting ban too: those who seek to woo government officials can present them with a kind of gift catalogue, in place of an actual gift. The official can register receipt of a “book” – who could object to that? – but the “book” gives them access to delivery of cameras, cigarettes or expensive drinks.

Creative senior officials can get around any prohibition, however draconian. But down at the lower end of the pecking order, those such as Ms Lu will be struggling through the Chinese version of an annual performance review performed in iambic pentameter – in the canteen. Gone are the days when she had any chance of finding an iPad at the bottom of her iron rice bowl.

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 (www.heroinnovator.com), 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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