SHANGHAI -- A recent tumble in stock prices for restaurant operators in China appears fed by politics, following President Xi Jinping's rebuke of consumer gluttony and the public's obedience to his call for restraint.
Roast duck chain China Quanjude Group plunged more than 10% in mid-August, as did restaurant and hotel company Xian Catering. Jin Jiang, a hotel company that generates a big portion of its revenue from the banquet business, nose-dived around 20% at one point last month.
It all started when Xi's statement that gastronomic excesses are "shocking and distressing" was reported in the media out of the blue in August. His remarks that the Chinese public should have a sense of crisis about food security quickly spread nationwide, spurring municipalities, businesses and individuals to take action.
The campaign runs counter to the Chinese custom of ordering more than plenty to express generosity, especially at banquets. To be mindful of how much food is on the table, a trade group called the Wuhan Catering Industry Association proposed ordering one dish fewer than the number of diners in a group under a system dubbed "N-1."
Similar moves followed in some other cities, with Liaoning Province in northeastern China even touting an "N-2" model.
Restaurants are taking part in the campaign, with messages like "no leftovers" and "clean your plate" popping up at eateries in Shanghai.
Established restaurant Jade Garden now offers a 10% discount for customers with no leftovers. It covers those who take home what they do not finish, so the offer essentially means price cuts. Xing Guo hotel is waiving a 15% service fee for dining guests with no food left on their plates. Eateries such as ramen noodle shop Ma Ji Yong offer takeout containers for free at some of their locations.
"Chinese customers are ordering less," lamented the manager of an Italian restaurant in Shanghai.
Why did Xi issue the edict targeting food waste? China's self-sufficiency rate is expected to decline in the long term, and Beijing's trade conflict with the U.S. adversely affecting its soybean imports remains a possibility. But this year's harvest looks solid despite the floods.
Xi is believed to be testing public loyalty as China begins focusing on whether he will remain president for a third term after serving 10 years. With the selection of the new Communist Party leader at the 2022 National People's Congress approaching, China's political season has already started, causing some damage to the economy.