As more than a million restaurants closed their doors in recent months, diners in China are ordering takeout instead, amid skyrocketing numbers of food delivery riders.
Amid a flagging economy, glitzy shopping malls, noodle shops and eateries have been shutting down across the country, according to local media reports.
More than a million food and beverage outlets, including 30,000 noodle shops, shut down in the first half of this year, close to the total for the whole of last year, catering industry news service Canguanju reported.
The report came as Taiwanese dumpling chain Din Tai Fung, which currently has 30 stores in China, including Shanghai, Beijing, Hangzhou, Shenzhen and Guangzhou, said it would shutter 14 of its stores in northern China, citing the economic downturn.
Economic commentator Si Ling told RFA Mandarin that Din Tai Fung’s move is representative of the state of luxury or high-end dining in China, and a bellwether of economic buoyancy.
“Din Tai Fung was once very successful in China, off the back of booming economic growth,” Si said. “This shows how China’s middle class is shrinking at a faster and faster rate.”
"This huge consumer group is voting with its feet – there's no faking that," he said, in an apparent reference to the Chinese government's insistence on positive economic news.
Fan Shih-ping, professor of politics at National Taiwan Normal University, said there are also political overtones to the disappearance of Din Tai Fung stores.
"Xiaolongbao [dumplings] were actually brought to Taiwan from mainland China after 1949, flourished in Taiwan, and then returned to mainland China, so it carries the meaning of United Front Work," Fan said, in a reference to the Chinese Communist Party's outreach and influence operations.
"It has a very obvious political meaning, because the motherland once opened its arms to a returning xiaolongbao restaurant, and now Din Tai Fung is leaving the family again," he said. "I think that's how the Chinese feel about it."
State salary cuts
U.S.-based current affairs commentator Chen Pokong said restaurants have been particularly hard hit by the lack of money in local government coffers since the three years of zero-COVID restrictions, which ended following nationwide protests in December 2022.
“Most of the customers in high-end noodle shops and other eateries are civil servants,” Chen said. “[Local] leaders would entertain guests or do business deals, even bribery and corruption went on, in high-end restaurants.”
"Now, there's a power struggle that targets people in the name of anti-corruption, so a lot of officials are wary."
Many state employees have had their salaries and bonuses cut, or have not been paid at all amid the economic downturn.
“Officials aren’t eating out or spending money any more, which is a major blow to China’s high-end restaurants,” Chen said.
Instead, many in China are opting to have food delivered at home, leading to a recent spike in the number of delivery riders lately, according to the Beijing municipal government’s statistics bureau.
While overall earnings in the catering sector fell by 2.9% in the first half of 2024, year-on-year, profits plummeted by 88.8% over the same period, figures showed.
Meanwhile, the number of employees in the delivery and takeout sector rose by 49.7%, indicating that people have continued to prefer to eat in despite the lifting of COVID-19 restrictions.
A Beijing resident who gave only the surname Guo said many of the new delivery workforce are former high-level corporate employees who can't find white-collar jobs any more, and are struggling to make ends meet.
“It used to be just recent graduates or non-local residents who worked as delivery riders,” Guo said. “It used to be a job that locals were unwilling to do, but now locals are starting to compete for these jobs too.”
Translated by Luisetta Mudie.