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China's graft clampdown bites into mooncake sales

China's crackdown on corruption has bitten a huge chunk out of mooncake sales in the country, after Beijing banned officials from using public funds to buy the traditional pastry as gifts.

SHANGHAI: China's crackdown on corruption has bitten a huge chunk out of mooncake sales in the country, after Beijing banned officials from using public funds to buy the traditional pastry as gifts.

The move was part of a nationwide drive to weed out corruption and extravagance amongst government officials.

Mooncakes are a traditional Chinese pastry eaten during the Mid-Autumn festival in August and September, but the customary treat has been linked to corruption in China. Officials and businessmen had started receiving extravagant versions of the delicacy to sweeten relationships and build connections.

In its attempt to crackdown on graft, Beijing banned the use of public funds to buy mooncakes last year. The most expensive mooncake gift box can cost thousands of dollars. Since then, sales have plummeted by more than half this year. But this has not stopped the culture of gift-giving as orders at corporate gift companies have remained consistent.

"Gifting is very important to the Chinese, said Liang Wenan, senior project manager at GiftU. “Even if expensive gifts are not allowed, it is still necessary to give cheaper corporate gifts. Some would request for a RMB2000 (US$33) wine opener gift set. They feel that high-end Bluetooth speakers are unsuitable."

China's main disciplinary body for fighting graft has even created a section on its website for whistleblowers to report on officials using public funds for lavish means. There have been hundreds of cases so far, including purchases of big-ticket items like holidays and cars.

The government says its anti-corruption campaign will continue for at least five years.

"The government is undergoing functional reforms so enforcements are stricter,” said Ye Tan, a financial commentator. “The highest form of corruption is not how much money you give, but how many shares and ways to earn money you provide as seen in many high-end investment products like jade and paintings, which have in recent years spiked in prices.

State media has also reported that some retailers have gone online to sell high-end mooncakes to avoid detection by the authorities. There are even mooncake gift books, which come with coupons redeemable for other items like honey. It is unclear now big these operations are but the dramatic drop in sales of physical mooncakes highlights the political might of the Chinese leadership under President Xi Jinping to eliminate extravagance at the official level.