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The party is over for SOEs conferences

( Xinhua ) Updated: 2014-01-18 18:59:59

BEIJING - "Best employee" got a Porsche. The "excellent" few scooped 500,000-yuan stocks and trips to Hong Kong. "Good" employees won cool gadgets like NOTE2 and IPhone 5s.

Generosity indeed at the year-end dinner of Qihoo 360, an NYSE-listed Chinese Internet company, which wowed netizens and left many public sector employees somewhat slightly envious.

The party is over for SOEs conferences

A female employee with a private petroleum company in Yantai, Shandong province poses after winning a car as a year-end bonus on Jan 15, 2014. The affluent company gives away 52 cars worth 6.5 million yuan ($1.07 million) to employees with outstanding performance in the last year. [icpress.cn]

Traditionally, Chinese companies host "annual conferences" in the last lunar month of the year to celebrate their success by thanking staff and clients.

In previous years, the most lavish of such extravaganza were often the headline grabbing spectacles staged by China's mammoth state-owned enterprises (SOEs) featuring sumptuous banquets in five-star hotels, swanky gifts and wall-to-wall celebrities. This year, it was private firms which stole the show, while the otherwise high-profile SOEs had little to celebrate.

LET THE GOOD TIMES ROLL

Employees of a number of big SOEs in Beijing have told Xinhua that "annual conferences" would either not be held at all, or would be receptions made "as simple as possible".

The gifts for staff and clients have morphed from MacBooks, IPads and IPhones to chocolates, towels and even toothpaste, they said.

Tian, who works in a state-owned Beijing bank, told Xinhua that his bank won't be hosting any annual conference at all this year, for the first time in many years.

He recounted the good old days when the winner of the prize draw at the annual conference received a 60-gram gold bar and he, together with hundreds of colleagues, won a MacBook.

This new austerity SOEs have suddenly adopted is a direct result of a campaign to cut extravagance and reduce red tape which has been in full swing since the Communist Party of China (CPC) leadership election in 2012.

The CPC has sworn to reduce waste, promote frugality and banned CPC officials from pomp, ceremony, bureaucratic visits and unnecessary meetings.

These annual dinners, often attended by government officials, evolved into nothing more than wining and dining away public funds, and an opportunity of buying gifts and trips, said Yu Nanping, a professor at the East China Normal University.

Many companies turned the year-end dinners into public relations events and a tool for cozying up to government officials, he added.

An annual conference can cost hundreds of thousands yuan, including planning, lighting, venue hire, catering, services and gifts.

A state-owned building material company in Beijing used to host annual conferences for officials, employees and clients not justin Beijing, but often flew guests to Yunnan or Fujian provinces, costing about 2 million yuan each time, according to the firm's public relations manager.

This year they canceled such trips and held a conference call with staff and clients in other cities, said the manager.

SETBACKS FOR EVENT PLANNERS & HOTELS

The cooling of SOE enthusiasm for gala receptions could spell trouble for event planners and posh hotels.

Ke, an event planner in Beijing, told Xinhua that orders for annual conferences had plummeted this year, especially from SOEs who used to be their major source of business around New Year.

"It is an open secret in our business that SOE annual conferences were the most profitable as they are not price sensitive, but now the party is over," said Ke.

A similar story was told in Shanghai. Banquets have fallen off by more than 50 percent, mainly thanks to falling orders from SOEs, according to Jin Peihua of the Shanghai Restaurant and Cooking Association.

The manager of a high-end hotel in Shanghai lamented that the time of reaping handsome profits from year-end dinners had come to an end.

"Even for those SOEs who held year-end dinners, they have turned price-sensitive. One or two years ago, a table of food and beverages would normally cost 7000 to 8000 yuan. This year, it costs less than 1000 yuan as they started to use group buying," he said.

The remarkable fall in SOE receptions caught event planners and hotels on the hop, and might bring bankruptcy to some. Yu of East China Normal University suggests the companies and hotels do more to cater to the demands for investments activities, road shows and wedding banquets.

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