China’s anti-graft and austerity campaign is taking its toll on luxury sales, with orders for private jets declining, along with a sharp drop in revenues yielded by the gambling industry based in Macau.
In the last one year, orders for private jets have shrunk to their lowest point since 2011— the drop attributed to the government’s intensive anti-corruption and austerity campaign.
Charter flight orders
Since 2012, charter flight orders from the central government bodies have dropped to zero, the Global Times, affiliated to the Communist Party of China (CPC) reported.
As the anti-graft movement expands, President Xi Jinping has also declared war on “undesirable work styles and practices such as formalism, bureaucratism, hedonism and extravagance”. Members of the CPC have been the prime targets of a vigorous internal campaign for austerity, which is meant to reconnect ordinary people with authorities.
The battle to win hearts-and-minds was launched to reinforce the legitimacy of the CPC, which has come under threat, following years of dizzying economic growth, which had masked gross inequalities and growing social discontent.
“The fact that the Communist Party of China’s legitimacy to govern needs repairing due to damage inflicted by corruption has been hidden behind fast growth,” says Wang Yukai, vice-president of a Beijing based think-tank, in an article in China Daily.
The President seemed to have grasped the depth of the crisis, which was evident in his declaration at the formal launch in 2013 of his frugality campaign, that, “Winning or losing public support is an issue that concerns the CPC’s survival or extinction.”
In the sweeping crackdown that has followed, 71,748 Chinese officials have been punished last year for violations that have included disregard of rules pertaining to the “use of government vehicles, overseas travel financed with public funds, sending or accepting gifts, excessive spending on receptions, extravagant weddings or funerals, and other discipline violations”.
In China’s hyper-active social media, use of private jets has become particularly offensive, because in popular imagination, the use of these planes symbolises a perceived nexus between the business tycoons and the officialdom.
The Global Times quotes Liao Xuefeng, a business insider, who acknowledges that the ownership of a private plane can “open a door for business people to connect with government officials.”
Govt.-industry nexus
Gao Yuanyan of the School of Economics and Management at Beihang University explains that if any government official “enjoyed the privilege of having a free ride in a private jet, they would definitely help the business person by abusing his executive power, which is against the law”.
President’s Xi’s focus on austerity seems to have also hit Macau — a top global destination for gambling. Official data reveals that revenue growth on a year-on-year basis slowed in the beginning of 2014, before stepping into decline in June. A 30.4 per cent drop in December was the steepest on record.
The Chinese government is unlikely to be affected by these shrinking numbers, for the much bigger political target of achieving the “Chinese Dream” is at stake.
Liberation from corruption is central to the emergence of the “Chinese Dream” which has the emergence of a civilised China, based on equity, fairness and a high moral standard as one of its main planks.
The anticipation of a socially cohesive and environmentally friendly China, in turn, is meant to premise acquisition of hard power — economic, military, scientific, political and diplomatic, which is another attribute of the President’s Dream.
