China Orders Nationwide Cuts on Official Alcohol, Travel Spending

China's government and Communist Party, under President Xi Jinping's leadership, have issued new directives mandating austerity measures for officials to reduce unnecessary spending on travel, meals, alcohol, cigarettes, and office facilities amid economic challenges and falling local government revenues. This renewed focus on frugality emphasizes strict diligence and opposes extravagance, reflecting Xi's ongoing campaign against corruption and ostentatious displays of wealth. Local governments face significant debt burdens exacerbated by declining land sale revenues, prompting these measures to stabilize finances and promote accountability. The crackdown includes specific rules such as banning expensive alcohol and gourmet dishes at official meals, limiting lavish receptions, and encouraging prolonged use of office furniture. The financial markets reacted to these measures, with consumer staples stocks, notably Kweichow Moutai Co., experiencing notable declines. Analysts view this campaign not only as an economic necessity but also as a demonstration of Xi's control over the party amidst external pressures like trade tensions with the United States.