Chinese Economics Thread

[canniBUS]

I have evidence that restaurants seeing reduced offline traffic / lower demand / promotional & extremely competitive environment and that restaurants are looking to cut costs. I do not believe SAMR would require me to tell them that this is happening as they've clearly stated what they see is happening in the industry.

General tip, when SAMR is telling everyone there is deflationary/involution in a specific sector, it behooves one to change one's priors and figure out why SAMR has concluded such way, and not go 'ackshually they are wrong.

What about from the platform side? Any evidence from insiders there?

 

[abenomics12345]

What about from the platform side? Any evidence from insiders there?

Nope, I don't.

Although @hereforsemithread might you should ask him, he's the one who claims there were abuses.

The conversation goes something like "hey nice delivery business you have with us, would be a shame if the traffic went away". In general most small restaurants do not have the brand/customers to not care (unless you're some famous place that people line up for) about participating in this platform.

By the way, this is not a normative statement. Business negotiations like this happen all the time ("I buy a lot of stuff from you, I'd like a discount otherwise I will go with someone else"). Which is why I don't attempt to judge as to whether this is illegal/abusive or not.

I am however, stating that this is an issue and not healthy for the restaurant industry. Which clearly SAMR agrees otherwise they wouldn't have opened an investigation.

 

[manqiangrexue]

Why doesn’t the CCP do something about this rules/laws? After all, they are a socialist communist government, I would have thought they will be more leaning towards workers welfare to balance greedy companies from such practices

I think a lot of it has to do with culture and unenforceability. Culturally, it is seen as rude to leave before your boss leaves; your respect for your seniors should be that you will never work less hard than they are working. Politically, people are uncomfortable leaving before the boss because when you're gone and others are still there with the boss, office politcs can happen and favoritism starts to develop to your disavantage. Same thing with office drinking parties, which should be a source of post work relaxation completely optional; those who are very tired or have families to get back to need not attend, but politically, everyone must be there to ensure they are not sidelined in the future. Also, it's extremely hard, almost impossible to enforce reduced work hours when workers voluntarily do this to get ahead in the company and into the boss' good graces. You can only protect people from overwork when they welcome your protection.

 

[canniBUS]

Nope, I don't.

Although @hereforsemithread might you should ask him, he's the one who claims there were abuses.

Unfortunate. Still, it seems your job puts you in a good position to hear first-hand insider information from a variety of industries. It would be useful to forward anything suspicious to regulatory authorities. You don't need to be a legal expert to do this, legality can be determined by experts, you are just providing information.

 

[SanWenYu]

I think you answered yourself here. Like philosophically you are right, but empirically that is not happening.

Any data to back up this claim that Chinese are getting foods less healthy and not as safe?

You can't hire 'half a waiter' for the 'half of people who prefers to show up' during lunch hour.

I am not following.

You are using a subjective term ('fairly') in an objective/normative manner, which is inherently flawed.

Flawed in the same manner as you are using "empirically"?

Show me the data to prove me wrong. Specifically, show me the data that restaurants are forced to sell pre-cooked meals for the price of regular meals because they are being squeezed out by the platforms.

Is it fair a 500g portion of carp is sold for 10 RMB vs. a 500g portion of grouper is sold at 299 RMB?

Why are you asking me? Did I ever say it is fair to sell pre-cooked meals at the price of regular ones?

 

[SanWenYu]

Had you spent 30 seconds searching on Google you'd have found this 5th down on the results:

Please, Log in or Register to view URLs content!

Also, that you have no idea this is happening doesn't mean I haven't been told by companies with hundreds/thousands of restaurants operating in China that this is exactly what they are doing.

"除了“禁酒令”，下半年的社保新规、外卖大战、“抵制预制菜”，也让餐饮业的盈利更加艰难。"

Delivery platforms are not given as the number one factor for the drop of average spending at restaurants.

 

[abenomics12345]

I am not following.

There are fixed costs that one needs to maintain operating a restaurant. Meaning, if revenues fall by 10%, profits fall more than 10% because you can't have half a chef or half a waiter.

Any data to back up this claim that Chinese are getting foods less healthy and not as safe?

You said it yourself, the 西贝 incident is plenty evidence.

Would you need data to believe that the proliferation of precooked meals (TV dinners) in the US has led to less healthy and not as safe food for Americans? Its not surprising

Specifically, show me the data that restaurants are forced to sell pre-cooked meals for the price of regular meals because they are being squeezed out by the platforms.

We are seeing more restaurants go out of business (see my earlier link for the state of the industry)- meaning that business has gotten harder. Clearly there are quite a lot of business owners who've decided to shut down than to sell subpar food.

Delivery platforms are not given as the number one factor for the drop of average spending at restaurants.

Yet SAMR opened an investigation...?

 

[SanWenYu]

There are fixed costs that one needs to maintain operating a restaurant. Meaning, if revenues fall by 10%, profits fall more than 10% because you can't have half a chef or half a waiter.

I am not following still. Are you saying that revenues fall due to the squeeze by the delivery platforms? Why are the restaurants not leaving then?

You said it yourself, the 西贝 incident is plenty evidence.

As far as I can follow, most customers of 西贝 had their meals in restaurants. The food chain was not squeezed by delivery platforms.

Would you need data to believe that the proliferation of precooked meals (TV dinners) in the US has led to less healthy and not as safe food for Americans? Its not surprising

If ordered from the same restaurant, pre-cooked 鱼香肉丝 delivered to doorsteps should be as healthy and as safe as those cooked by chefs on demand.

If someone only orders meals from the cheapest restaurants, it doesn't make any difference whether the foods are pre-cooked or prepared on demand.

We are talking about Chinese food market. What Americans eating, delivered or not, is irrelevant.

We are seeing more restaurants go out of business (see my earlier link for the state of the industry)- meaning that business has gotten harder. Clearly there are quite a lot of business owners who've decided to shut down than to sell subpar food.

Again, you were blaming the delivery platforms for the hardships and even closures in the Chinese catering business. Yet that proof you gave above did not count the platforms as the number one reason.

Indeed there are restaurants complaining the high cost of using the delivery platforms. But they have the freedom to end the relationship with the platforms if they want to.

Yet SAMR opened an investigation...?

I did not say the platforms are innocent. But that is not same as blaming them as the reason.

 

[hereforsemithread]

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