Chinese Restaurants Feel Economic Pinch
Chinese Restaurants Feel Economic Pinch

Chefs make dumplings inside a restaurant
Chefs make dumplings inside a restaurant in Beijing on Jan. 3, 2012. A recent report from the China Cuisine Association shows that as many as 15 percent of restaurants failed each month during the first half of 2012. (Ed Jones/AFP/Getty Images)

In another sign that China’s economy is on the downslide, a recent report from the China Cuisine Association shows that as many as 15 percent of restaurants failed each month during the first half of 2012.

Data released by the Association also shows that the entire food and beverage industry in China has dropped to the lowest point since 2000, barring the SARS outbreak in 2003, which severely impacted restaurants, bars, markets, and other businesses.

The data and reports show that the food and beverage industry growth rate in the first six month in China was down 3 percent over the same period last year.

Ms. Zheng, who would only be identified by her surname, manages a Chinese hot pot restaurant chain in Shanghai. She blames the downturn in business on China’s overall economic decline, she said in an interview with The Epoch Times.

She also said that the decline can be attributed to restaurant owners who make their food with recycled oil, or “gutter oil,” and low-quality food ingredients.

“If you raise the price of food, you will push customers away. But if you maintain the same price, it becomes difficult to manage because the cost is too high,” Ms. Zheng said. She estimates that many medium-sized restaurants will likely soon close because of the downturn in customers and increase in costs.

In China, “the entire food and beverage market is suffering more [than other businesses],” she added.

Mr. Tang, who heads the Xiaojiangnan Restaurant Group Ltd. in the southern city of Guangzhou, had a similar view of the matter.

“Procurement costs have risen around 20 to 30 percent, while labor costs rose around 10 percent” in recent months, he told The Epoch Times. “There are less customers than before.”

Tang continued: “Profits have fallen by around 30 percent, compared with last year, but higher-end restaurants and establishments have suffered the worst because they have higher operating costs.”

Read the original Chinese article. 

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