Chinese boozing is down for the first time in a quarter of a century

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Here is possibly the best evidence yet that China’s economy is tanking: beer production has fallen for the first time in 24 years. Increases to GDP should equal increased boozing. This is, I believe, a well attested fact of economics 101. The International Business Times informs us

According to new data by China’s National Bureau of Statistics, for the first time in 24 years the volume of beer produced in China fell in 2014, down by 2.76 percent, or roughly 4.9 million kiloliters, which is about 163 billion standard-size beer bottles.

Though beer continues to be the most popular alcoholic beverage in China, its firm grasp on the market is beginning to slip. After decades of rapid growth, with production tripling from 1990 to 2000 and then doubling from 2000 to 2010, beer production peaked in 2013 when Chinese beer producers broke the 50 million-kiloliter threshold for the first time, producing 50.62 million kiloliters of beer. According to a report by Taiwanese news site Want China Times, citing a report by the China Alcoholic Drinks Association, in 2014 beer held an overwhelming majority of the alcoholic drinks market — 75.2 percent. Still, this was a 1.6 percent drop compared to the previous year, and beer was the only drink in the country that registered a drop in production.

Is it possible to increase GDP by 7% while boozing goes down 2.76 percent? Can these things be decoupled? The International Business Times offers up an alternative explanation:

Others contend the dip is partly due to the government’s drive for public officials to be more frugal.  This began in early 2013, shortly after President Xi Jinping took the helm, and there are now fewer parties, banquets and outings with big-spending politicos. “The government’s austerity drive has dampened beer consumption,” an unnamed manager at a Chinese brewery told state-run China Daily.

“Beer sales at restaurants and entertainment venues are gloomy, since a lot of officials haven’t dared to eat out or even go to karaoke parlors. Many companies also suspended gift-giving in the wake of the austerity drive, which led to declines of beer sales at supermarkets.”

Levels of corruption in China are impressive, but can they be this impressive?

Can it be that Chinese officials were getting through a hundred billion bottles of beer each year, and are now laying off the sauce in response to an anti-corruption drive?

OK, the 163 billion standard-size beer bottles claim is a screw up by the people at IBT whole stole the story from China Daily and converted an annual production of 492 million kilolitres to a fall in production of 4.9 kiloliters. But the thought of corrupt Chinese officials downing around 3% of Chinese booze and now no longer being able to do it is a troubling one.

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