A sharp-tongued criticism of boozy business drinking from China’s anti-graft watchdog takes direct aim at Alibaba scandal and has sent major Chinese drinks producers’ stocks spiraling on Wednesday.
The Central Commission for Discipline Inspection wrote on its website commenting on the sexual assault case involving a female employee from China’s tech giant Alibaba that vile drinking culture exposed under-the-table rules and should be eradicated.
The comments from the country’s anti-corruption watchdog on Tuesday sent a few major drinks companies’ stocks tumble the following day.
According to Bloomberg, the bellwether Kweichow Moutai Co. fell as much as 2.1%, while Wuliangye Yibin Co. — its next biggest peer by market value — dropped 2.8%. Wine maker Shanxi Xinghuacun Fen Wine Factory Co. declined 3.2%.
The commentary posted by the Central Commission for Discipline Inspection says that any perpetrators of law in the sexual assault case should be severely punished, and “deep-rooted bullying culture and business drinking and other under the table rules should be eradicated.”
China has notorious business drinking culture where contracts are often signed over gallons of fiery baijiu during rounds of Ganbei or “bottoms up” in English. It’s not uncommon to read news report where employees drank themselves to death at business dinners.
It’s too early to say if this will prompt larger scale clampdown on business drinking similar to the anti-corruption campaign seen in 2013. The campaign back then dented China’s luxury spending, fine wine consumption and wine gifting.
But the country this year has toughened its grip on technology sector, and in its latest drive to reform education, it wows to root out private tutoring and forbid private education providers from making profits.
This all prompted China watchers and investors to plough through state media reports and commentary published by Party organs to decipher hints and clues on what’s coming next.
Alibaba on Monday has fired the manager directly accused of rape. Two other senior managers also resigned for failing to heed to the female employee’s complaint.
The incident has since ignited larger debates on #MeToo movement in China, work environment and sexism at work.
