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China cracks down on post-work drinking and ‘harmful karaoke’

Chinese politics & policy updates

China is moving to suppress a culture of heavy post-work drinking as Beijing struggles to respond to rising outrage over allegations of sexual assault against women.

The Central Commission for Discipline Inspection, the Chinese Communist party’s anti-corruption watchdog, said pressure to drink could lead to crimes and such practices should be replaced with “correct values”, according to a commentary on its website.

Separately, the culture ministry said it planned to ban songs from karaoke venues that spread “harmful information”. These included songs with lyrics which allegedly inspire listeners into drug taking, gambling and religion, as well as content deemed to endanger Chinese sovereignty. Companies that supply songs to venues were encouraged to flag lyrics that were potentially problematic.

The crackdown on behaviour deemed inappropriate is the latest in a series of regulatory actions that have ensnared Chinese businesses, including some of the country’s biggest tech and gaming companies, and stung global investors.

The warning from the CCDI follows allegations that a manager at Alibaba, the technology group, sexually assaulted an employee. The manager was subsequently fired but the episode has shone a light on corporate drinking culture.

The CCDI’s comments jolted shares in alcohol companies. The stock price of Kweichow Moutai, the world’s largest liquor producer that makes a white spirit called baijiu, fell 2.7 per cent on Wednesday. Shares in Shanxi Xinghuacun Fen Wine, another white spirits maker, dropped 2.49 per cent.

China’s #MeToo movement has tapped into a vein of dissatisfaction among young workers, posing a complex challenge to corporate and political leaders in Beijing.

Interns at Tencent, the tech group, have called on the company to outlaw social pressure to drink, according to internal company messages shared on Weibo, China’s version of Twitter.

Martin Lau, president of Tencent, said that the suggestions would be forwarded to human resources. The company, he added, had a zero tolerance for any form of sexual harassment.

“One of the consequences of the MeToo situation is that we are probably going to get increased regulation of entertainment,” said Thomas Gatley, a Beijing-based analyst at Gavekal Dragonomics, the research group.

Ng Jun Ying, an analyst at Fitch Solutions, noted Beijing had not confirmed new regulations on the alcohol industry. “In the very short run, alcohol sales will likely spike as Chinese consumers hoard booze in anticipation of any crackdown,” he said.

“It is, however, very plausible that the authorities will intervene in the entertainment industry in light of the recent developments,” Ng added.

Gatley said the “intensity and tone” of the crackdown would ease, and pointed to signs of co-ordination among regulators in order to “provide a more stable and predictable policy environment for firms and investors”.

Policymakers in Beijing have argued this year was a good period to enact a variety of structural reforms in the wake of the country’s robust economic recovery from the depths of the pandemic, Gatley added.

“That was probably initially considered to be a statement focusing on economic reform [ . . .] But it is not too surprising that these other sets of regulatory priorities have been raised and accelerated during a period in which it was seen as a good opportunity to make some make some painful changes at a time when things are going very well,” he said.

Additional reporting by Sherry Fei Ju and Ryan McMorrow Beijing


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