Frugality prevailing in former high-end sectors

China's ban on extravagant official galas illustrates efforts of the Communist Party of China (CPC) to fight corruption and will help healthy development of related markets, analysts said.

Immediately after authorities issued a circular on Tuesday to halt extravagant official galas and punish those who organize such events, a provincial satellite television channel in east China's Anhui Province quickly wrapped up an evening gala celebrating Qixi Festival, or China's Valentine's Day.

Government funds should not be used to hold commercial celebrations or pay for expensive entertainers, according to the circular. It said lavish festive celebrations damaged the image of the CPC and the government, and triggered complaints from the public.

This has been the second ban to curb extravagant and wasteful galas this year.

The first notice was issued by the administration in charge of radio and TV in January to urge broadcast stations to follow a frugal and simple style.

The new ban is expected to stop some local governments and official TV stations from pursuing grandiose performances to celebrate the Spring Festival, the traditional Chinese new year, industry insiders said.

Zhang Xiquan, an owner of Zhongya Culture and Media in Taizhou in east China's Jiangsu Province, organizes lavish parties for the government, but his company has not received an order for several months.

The frugality decisions are part of efforts to implement the "eight requirements" that the CPC leadership began promoting in December to reject extravagance and bureaucracy.

The public has expressed support of the bans on the Internet, saying cash should be used to improve public welfare.

Tian Zhihui, an entertainment association official, said the gala performances market has dropped by 30 percent after the frugality regulation was made. However, the drive will help for the healthy development of the market as no government funds will be granted for expensive entertainers, thus reducing the cost of a performance.

In addition to galas, banquets, official meetings as well as tourism markets have also been affected by the CPC's frugality drive.

Mid-year reports released by some luxurious restaurants showed they are suffering due to fewer government bookings. High-priced dishes are being replaced with more affordable food.

The catering industry, especially the high-end dining sector, must reduce their reliance on government clients and adhere to a new market environment as the frugality campaign is deepening, said a report issued by the China Cuisine Association earlier this month.

The situation is similar in the tourism market with tours at the public's expense decreasing.

The occupancy rate of five-star hotels across China was 50 percent in the first half of the year, 5 percent lower than the same period in 2012. The average room revenue saw an 11 percent decrease year on year, according to a survey by the China Tourist Hotels Association.

"We are being sent on fewer tours for training and inspections," said Chen Meizhen, a government employee visiting Guilin City in southern China. "We stay in three-star hotels and eat affordable food during our tours."