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December 26, 2012

Alcohol Crackdown Causes Headaches for Chinese Investors

by VOA News

A move to forbid high-ranking Chinese military officials from attending banquets and other events where alcoholic beverages are served has left many Chinese investors with a hangover.

According to Xinhua, the nation’s official news agency, one Chinese alcohol producer, Kweichow Moutai, lost $2 billion in value the day the ban was announced as its stock plummeted 5.5 percent.

The regulations were announced December 21 by the Central Military Commission (CMC). In addition to alcohol, they set limitations on the use of welcome banners, red carpets, floral arrangements, live performances and souvenirs, among others.

The CMC is chaired by new Communist Party chief Xi Jinping, who took over the party and the commission last month. He has pledged to fight corruption and is slated to become China's president in March.

The new regulations also extend to commission officials. Reports say military commission officials are required to "discipline their spouses, children and subordinates and make sure they do not take bribes."

According to Xinhua, Chinese internet users are praising the ban, but some are calling for it to be extended to all government officials.

A former spokesman for the Ministry of Education took to Sina Weibo, a popular microblogging site, to call for limiting liquor advertising in television, especially during popular national festivals.