Inflation Fears Rising: China Cracks Down on Food Waste

Inflation concerns are rising in China with another push to stop food waste. The policy looks more like virtue signaling than a serious attempt at combatting price increases because waste isn't a major factor in food prices. If it is a serious effort to impact prices or conserve food, it suggest the government fears catastrophic shortages or borderline "hyper inflation" in food prices, inflation in quotes because this is not mainly a monetary event.

Chinese culture is wasteful when it comes to food ordering. A good host provides for his guests and leftovers are a sign everyone has eaten their fill. THe more important the occassion, the more dishes will be ordered. This is called 面子宴席, literally translates as "face banquet." I have been at weddings where the food came out faster than you could eat it, and I was trying. The dishes then started clearing before I could even start on them, or they were buried under so many dishes I found myself playing an involuntary game of Jenga as I tried reaching the lower, inner dishes.

While Chinese order a lot of food, in my experience most of it gets eaten. People take the leftovers home, even at weddings. There may be some noveau riche attitudes towards waste, but the impact of the Great Leap Forward is still subconsciously active in China. Telling Chinese not to waste food sounds more like the U.S. cities and states that ban straws, a for-show policy of green virtue signaling. Some people see waste, but my hunch is some of this is shaped by Western Green thinking. SCMP: China’s tradition of hospitality may need reshaping if food waste is to end

This isn't the first time China has tried tackling food waste. Back in 2013 there was a push from the people: No-waste lunch: China's "Clean Your Plate" campaign

But the new campaign uses the slogan “I’m proud of my clear plate.” Zhang’s colleague, Xia Xue, a young woman with purple streaks in her black hair, says the group started the campaign in January by taking leaflets and posters to restaurants all over Beijing. “Our members of this group went to different restaurants and gave them our leaflets and posters and explained to them about our campaign,” she says. “Our members covered almost all the districts in Beijing, and have given out posters to more than a thousand restaurants.”

About the same time, Xi Jinping became President and began cracking down on extravagent dinners by party members. Maotai stock was hit as buying bottles of expensive baijiu with public money was now frowned upon.

Restaruants have been implementing various policies over the years. The "clean your plate" campaign never went away. For example, one restaurant offers free noodles if people leave half of their fish dish. The thinking is people don't take the fish because it isn't enough for a meal and they don't know what to do with it. With the noodles, they can turn it into a another meal at home. See: 剩鱼打包赠送面条回家可以再吃一顿

The campaign has surged back into the news and government policy though, because it looks like China is worried about food inflation. On the optimistic side, this is a virtue signal by the government because food waste has a small impact on food prices. On the pessimistic side, if the government thinks this policy will have a meaningful effect on prices, it means they expect roaring food inflation or even food shortages.

Nikkei: Xi calls on Chinese not to waste food as crop shortage fears grow

Chinese President Xi Jinping is urging people not to waste food as concerns grow over crop shortages stemming from the coronavirus pandemic and natural disasters. Xi has advocated legislation and supervision to prevent food waste, calling it "shocking and distressing," state media Xinhua reported on Tuesday. Floods in areas along the Yangtze River, the worst since 1998, destroyed 5.6 million hectares of crops in July, according to the Ministry of Emergency Management. Parts of the country remain inundated.

Covid-19 and floods spark China food crisis fear

上饶新闻：文明就餐 拒绝“剩”宴

"Who knows Chinese food is hard work." General Secretary Xi Jinping recently issued important instructions to stop food waste. The phenomenon of food waste is shocking and distressing! A few days ago, the reporter randomly visited some catering companies in the urban area and found that ordering the right amount of food, no leftovers, no leftovers has become the conscious behavior of the citizens, and the concept of civilized dining and "Clean Your Plate" has been deeply rooted in the hearts of the people.

FYI: Google translates the "光盘行动" campaign as "CD action."

Not every restaurant is implementing the policy well. BBC: China restaurant apologises for weighing customers

Going back to the SCMP article linked above:

Restaurants were failing in their responsibilities to remind diners to save food, he said, while some were encouraging bigger orders, leading to more waste. “It is definitely not an issue to be rectified in a short period. Cultivating a good consumption culture needs a long-term effort.”

The effort sparked by Xi’s call for a national belt-tightening has begun, with local governments issuing a range of detailed measures to curb food consumption. Wuhan, the central Chinese city where the coronavirus emerged last year, was among the first to roll out a new ordering mode for its restaurants.

Groups of 10 diners are now expected to order for nine – only adding more food to the table later, if it is actually required. Groups of two or three are to be offered half portions or smaller shares and all restaurants should provide takeaway boxes for leftovers, according to a notice from the Wuhan Catering Association on Tuesday.

Sounds like the reaction to sharply rising prices to me.

I'm skeptical about Chinese headlines in the West because, for instance, people said the Three Gorges dam would bust a couple of weeks ago. Having said that, a major drop in food production would be an extreme event for world markets because China would have to greatly increase imports. That could be the spark that ignites the shimmering seas of monetary gasoline pumped by global cental banks over the past 6 months. A smaller crisis mainly concentrated in Chinese food prices would also have global implications since it might force China into deflationary monetary policies, or it could trigger uncontrolled yuan depreciation inside and outside of China. The stakes are high because of monetary mismanagement in China and around the world.

In conclusion, I haven't seen anything except speculation about major food shortages in China. I'm not saying it doesn't exist, but I haven't seen it from reliable sources yet. The risk of high inflation is an extant threat because of monetary policy. Non-catastrophic food production and supply disruptions could cause an extreme price event because global central bankers have primed the world for extreme price events. One only need look to gold, silver and the FAANG stocks to see examples. There is nothing stopping speculators from doing the same to oil, natural gas or food if they had a mind to, but for bearish supply/demand narratives. Change the narrative and the match of consumer price inflation will be struck.

Update: I forgot to mention that price increases will do all the work of eliminating food waste. If the government were really concerned about food supply, it would be thinking about a restaurant bailout package because eating out would collapse again.

“面子宴席”食物浪费相对突出 如何做到人走桌清？

叶金福：“剩菜打包”也是一种舌尖上的节俭

China’s online eating shows under scrutiny after state media criticism of food waste