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All eyes on China ‘frugality campaign’

Xi Jinping, General Secretary of the Communist Party of China (photo courtesy of Wikipedia)Xi Jinping kicked off his tenure as China Communist Party chief with fierce anti-corruption rhetoric and a far-reaching call to austerity. Now he waits with the rest of the world to see whether luxury-loving cadres will really give up their showy lifestyles.

Media reports suggest Xi’s frugality campaign was at least partly responsible for a dip in luxury sales on the mainland in the first two months of 2013.

According to the Ministry of Commerce, high-end caterers in Beijing experienced a 35 percent drop in business since the start of the campaign.

In an interview with First Financial Daily, former Montblanc International China general manager Lu Xiaoming said, “If 2012 was a cold winter for luxury goods companies, 2013 will be a harsh winter.”

But some argue the decrease in sales is due more to Chinese shoppers making purchases abroad, where luxury goods are cheaper.

The Economist noted some officials are feasting just as before, but choosing less swanky surroundings — four-star hotels, for instance — to appear more austere.

An article in Financial Times examined a Chinese website about how to give gifts to officials less conspicuously. The site’s tipsters advised: “You must go to the leader’s home…Wait near his home until you see him walking upstairs. Tell him you were just passing by, happened to see him walking upstairs and ask him if it’s convenient to have a chat.”


A version of this post appeared in the China Compliance Digest. For a limited time, subscribers to China Compliance Digest will receive the China Anti-Corruption Handbook (normally $750) and FCPA Blog membership (normally $495) at no extra charge. Details are here.

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