China Shutters More than One Million Restaurants as Economy Withers

Canguanju, a Chinese catering industry news service, reported that more than one million restaurants have closed since the beginning of 2024, as the flagging economy makes Chinese consumers more interested in cheap takeout meals than even the most budget-friendly dining room experiences.

Radio Free Asia (RFA) pored over Canguanju’s data on Thursday and noted that times have been especially tough for noodle and dumpling shops, which surged in popularity when the Chinese economy was booming but withered just as quickly when consumers decided it was cheaper to have their noodles and dumplings at home.

Of particular note is the sad state of Din Tai Fung, a Taiwan-based dumpling chain that is closing nearly half of its 30 stores in China.

Din Tai Fung was seen as a bellwether of expanding middle-class prosperity in China, as the restaurant served upscale gourmet versions of dishes that could be purchased more cheaply from takeout joints or made at home, somewhat like gourmet hamburger restaurants in the United States.

Although it is based in Taiwan, Din Tai Fung also has a curious political dimension in China because dumplings are seen as a delicacy that China developed and exported to the Taiwanese after the great schism between the island and mainland. Taiwan cooking top-shelf dumplings and selling them successfully in China was almost a metaphor for the prodigal Taiwanese returning to China. The collapse of the Taiwanese chain is, therefore, both an economic and political embarrassment to the Chinese Communist Party.

Noodle shops were, likewise, a barometer of business-class success, catering to ambitious professionals on the go. Chinese commentators told RFA with some amusement that noodle shops became popular for business meetings, including the kind where bribe money changed hands under the table, but now they are shutting down by the thousands. Eating out is becoming such an ostentatious luxury that civil servants are afraid to do it, lest they attract the attention of anti-corruption investigators.

“Officials aren’t eating out or spending money anymore, which is a major blow to China’s high-end restaurants,” commentator Chen Pokong observed.

The bottom line was catering profits falling by an amazing 88.8 percent in the first half of 2024, while food delivery profits increased by 49.7 percent. Delivery drivers anecdotally reported that more of their customers were the kind of people who used to prefer eating out — and more of the drivers, themselves, were people who used to have white-collar jobs.