18 July 2018
The anti-extravagance campaign is bringing some officials in SOEs a healthier lifestyle with fewer banquets and less drinking. Illustration: Xinhua
The anti-extravagance campaign is bringing some officials in SOEs a healthier lifestyle with fewer banquets and less drinking. Illustration: Xinhua

How Chinese officials benefit from frugality campaign

The campaign against graft and extravagance in the mainland is making life simpler — and healthier — for many Chinese officials.

In the past, they were required during the Lunar New Year festival to give out red packets crammed with cash, sometimes accompanied by gifts of luxury products — all of which are now frowned upon.

One executive of a state-owned enterprise used to rely on his company car. However, the SOE is now closely regulating the use of company vehicles.

So he takes a 30-minute walk to the office if there is nothing urgent.

Some officials, however, continue to use a company car for their private use, but they now need to cover it up and take the risk of being found out. 

The executive bought a secondhand car last year for use when taking elderly family members on trips. He feels much more comfortable driving his own car to visit his relatives during the holidays.

Meanwhile, his wife is happy that her husband spends fewer nights out entertaining for business and comes home for dinner more often.

An employee of a state-owned utility firm named Gao is another person who is living a healthier lifestyle.

Gao eventually met his weight-loss target after cutting down on business entertainment.

In the past, Gao needed to pay visits to officials in Beijing and Zhengzhou, Henan province, during the Lunar New Year holiday.

But things started to change last year.

When Gao paid the annual visit to these officials, he was often given the cold shoulder. The officials told him just to speak frankly if there was anything about work he needed to discuss.

Fewer business banquets helped Gao to get back into shape.

The frugality campaign has had a mixed effect on a small restaurant that used to attract a large number of customers from local SOEs.

In the past, the owner used to have a lot of trouble collecting payment from the SOEs for their business banquets before the Lunar New Year.

Now, although he gets less business from these SOEs, he is also spared the headache of all those unpaid bills.

Many SOEs have been required to freeze their entertainment expenses amid the antigraft drive.

Officials at various levels have been ordered to comply with the rules and reject extravagance, formalism, hedonism and bureaucracy.

However, human beings remain greedy.

Stock investors, always hoping to make a fortune, paid close attention to market developments elsewhere during the holiday break before H shares resumed trading Monday.

Wealth creation in the traditional economy has run out of steam amid flagging economic growth in the mainland.

So mainlanders are turning to the stock market to make money from investment and speculation.

This article appeared in the Hong Kong Economic Journal on Feb. 23.

Translation by Julie Zhu

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Senior investment banker

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