Chinese authorities have issued the Regulations on Practicing Thrift and Opposing Waste calling for strict frugality and reduction in official activities, according to a report from Goldman Sachs. This is the first national-level anti-waste policy since 2014, which explicitly bans alcohol, cigarettes, and high-end dishes at official banquets. Provincial governments have already completed related deployments by the end of June.

In Goldman Sachs' estimate, the core affected groups (state-owned enterprises/public institutions/civil servants) and related groups (private/state-owned enterprise employees) will account for 16.7% of total catering retail sales in 2025.

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Assuming a 10-30% reduction in spending by these groups from June to December this year, the annual growth rate of catering retail sales could slow by about 0.9 ppts from the baseline forecast of 4.8%.

If the policy is enforced more strictly and for a longer period than anticipated, Goldman Sachs expects that it may further impact the service sector and high-end consumption industries such as gifting.