From Michael Sainsbury via Crikey on the suddenly pressing Chinese anti-corruption campaign:
The economic effects of the campaign are very real. Tough new laws on entertaining have hurt the hotel and restaurants industries, as well as the karaoke and hostess bars that have relied on officials spending up.
One former Australian diplomat who was recently entertained in China said that toasts, which would traditionally have been made with China’s vicious local firewater baijiu, were being made with, of all things, milk — as a beverage all but unknown in many parts of China only a few decades back. Western luxury car, clothing and accessories brands favoured by party cadres over the past decade or two have reported slower Chinese sales as the practice of “gifting” becomes a target or corruption officials and conspicuous consumption is reined in. Last week, for instance, UK fashion house Burberry said that there was “softening in growth from Chinese consumers both at home and when traveling”.
“People are afraid to make decisions; everyone is keeping their heads down and wants to stay off the radar,” one businessman form Beijing said.
The party is also losing its status as a preferred career path for many of China’s best and brightest. Certainly, for young people eyeing a life of comfort — luxury, even — the party is less appealing, with the corruption campaign choking off ways to supplement official incomes with grey or black money. Xi has even cut salaries at large state-owned enterprises.
And there is one issue stemming from the campaign that looks to be directly affecting Australia. While Chinese demand for Australian property is not showing signs of waning, there does appear to be a softening in demand from China for education places in Australia, according to education industry insiders.
While the cause of this is yet to become clear many believe that the anti-corruption campaign is at least a contributing factor. China is the biggest offshore market for Australia’s universities and tertiary institutions, contributing more than 25% of total student numbers, and demand from China has bounced back in the past few years after a series of own goals by the previous Labor government.
One of the key reasons for Chinese student demand has been for them to get permanent residency — and then bring their mothers out, creating what is called the “naked official” syndrome in China, where an official is left by himself in China, with the family safely tucked away overseas as they funnel money offshore — often through Australian property purchases.
It is these “naked officials” who have become an obvious target of Xi’s campaign, so keeping one’s family close at home is yet another way of avoiding obvious attention.
