Happy days in Japan: Xi’s anti-corruption campaign is chasing Chinese holiday shoppers overseas

SHANGHAI/TOKYO — Chinese President Xi Jinping’s anti-corruption campaign is casting a shadow over Lunar New Year
spending in China.

     The most important spread of holidays for
Chinese — and the country’s biggest spending spree — falls on Feb.
18-24 this year. Not only do workers get off seven days in a row, many
of them will be carrying wallets fattened by bonuses.

     But there are no signs of lavish Chinese government and company spending this year.

   While Shanghai First Food Hall, a major food store in the city, is
filled with shoppers ahead of the Lunar New Year vacation, the alcoholic
beverage aisle remains quiet. Snake-shaped bottles of baijiu, a
luxury distilled spirit, remain on a shelf, priced at 29,800 yuan
($4,775). They have been there since 2013, the year of the snake.

   During the regime of Hu Jintao, Xi’s predecessor, companies would
gift baiju to senior government officials because the bottles of liquor
could be readily exchanged for cash at certain shops.

began strictly enforcing discipline when he took the office of General
Secretary of the Chinese Communist Party in 2012. Using taxpayer money
to pay for meals and tours was banned, as was accepting gifts. Xi has
exposed corrupt government officials one after another through the
party’s Central Commission for Discipline Inspection.

     As a
result, sales of baijiu have plunged. Sichuan Swellfun, a major baijiu
brand, is expected to have logged a net loss of 400 million yuan to 430
million yuan in 2014.

     The continuing slump in China’s real
estate market is also looming over the holiday shopping season. Dozens
of migrant construction workers from rural villages on Thursday gathered
in front of the Shanghai city government building to complain about
unpaid wages.

     Construction workers staging protests before
Lunar New Year are annual events. But the protests appear to be more
frequent this year.

A different story

The Ministry of
Commerce reported that retail sales in China during the 2014 holiday
week grew 13.3% from a year earlier. That was the smallest increase
since 2005, when the current method of compiling data began. Sales are
highly likely to budge up even less this year as China’s economic growth
has further slowed.

     But incomes in China continue to rise.
This and the fact that prices of imported goods in the country are on
the increase spell happy days for retailers and innkeepers in Japan and
other countries near China.

     According to U.S. consultancy
Bain & Co., the consumption of brand products in China totaled 115
billion yuan in 2014, down 1% from the previous year for the first
decrease since the survey began. Including overseas purchases, however,
brand-name consumption increased 9%.

     Retailers in Japan are
getting ready. General discount chain Don Quijote opened a
Chinese-language website on Monday so Chinese tourists can place orders
before they arrive in Japan. Many Chinese tourists travel as part of
group tours and are on tight schedules. Don Quijote is trying to fit
into these tourists’ busy agendas.

     At the Mitsukoshi
Department Store in Tokyo’s Ginza shopping district, sales clerks in the
women’s wear and other departments will wield tablet computers during
the holiday streak to help them communicate with Chinese tourists.

     If given the chance, Japanese retail executives just might line up to give Xi a round of high-fives.

– Nikkei Asian Review

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