No free lunches: China's corruption crackdown hits hospitality industry

Close to a municipal government building in Beijing, a normally bustling high-end restaurant is now eerily quiet, with most of its seats empty at lunchtime.

- Guardian staff

Close to a municipal government building in Beijing, a normally bustling high-end restaurant is now eerily quiet, with most of its seats empty at lunchtime. The recent crackdown on civil servants frequenting restaurants – part of a government austerity drive intended to cut down corruption – is likely to have affected business and caused liquor sales to plummet, admits one waitress who works there.

In May, China released updated regulations aimed at Communist party members and civil servants, banning them from lavish banquets and other visible trappings of extravagance. But with more than 40 million people employed in the public sector, some analysts predict the new rules will hamper economic growth.

The policy was "undermining the impact of other policies aimed at boosting domestic spending", said Guo Shan, an economist at Hutong Research, an independent advisory firm based in Beijing and Shanghai. She predicts the drive could cause China's retail sales growth to slow by around one percentage point in the second half of the year.