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People Spending More Money in Restaurants

The average expense for dining out in China last year was about 120 times more than 20 years earlier, according to an official report.

Shanghai has overtaken Guangzhou in the total spending on meals in restaurants.

In its annual report on the restaurant industry for 2005, released yesterday, the Ministry of Commerce said Chinese people on average spent 680 yuan (US$84) dining out last year, 118 times more than 1978.

The catering market has expanded at double-digit growth over the past 15 years, as the retail sales volume of the sector climbed by 18 per cent over 2004, reaching 888.6 billion yuan (US$110 billion).

In Guangzhou, capital of south China's Guangdong Province, the average spending per person in restaurants hit 4,160 yuan (US$513) last year, the highest in China.

But in terms of total consumption, it was second after Shanghai, whose retail sales volumes in the restaurant sector reached 35 billion yuan (US$4.3 billion). Beijing and Chengdu were ranked third and fourth.

"China's GDP jump last year contributed to the booming catering sector," said Jin Yong, an analyst with the China Hotel Association.

As people feel more confident in their hip pockets, the average consumption in restaurants has kept rising by an average of 23 per cent since the 1990s.

In addition to individuals' income rise, Jin attributed the prosperity of the restaurant industry to changes in people's ideas on consumer habits and the development of the tourism sector.

"The most obvious example is the dinner for Chinese New Year's Eve," he said, as more urbanities tend to choose to dine out for the traditional festival.

Other occasions, like wedding ceremonies, have also brought larger business opportunities to the catering industry.

"Some reputed restaurants have already received orders from newly-weds for the end of the year," Jin said. "There might be no empty tables left on auspicious dates."

The emergence of restaurants that feature organic produce might inject new power to the sector this year, Jin forecast.

"Vegetables free from chemical fertilizer are really popular now, as people are better aware of food safety," he said.

"It was a really profitable year," said Lu Yonglin, president of the Red Sun Restaurant Group. Her ecological restaurant, which opened in 2003, is famous for its "green food" in Beijing.

Consumers now value the environment and overall quality of the restaurant, including food quality, service and the value of the meal, she said.

(China Daily March 24, 2006)

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