Anti-corruption activity threatens premium spend

Increased anti-corruption activity in China over 17Q2 may pose a risk to premium spend, says Bernstein analysts.

The brokerage, in its latest note titled “China Premium Consumer Tracker: The good times continue - but could anti-corruption rear its head again?” said there has been an increase in anti-corruption activity over the last quarter.

“The number of announced violations of the Eight Rules saw a 25 percent year-on-year increase in 17Q2, following three consecutive quarters of declines.”

The brokerage also noted a rising number of high-profile investigations announced by the Chinese Communist Party's Central Commission for Discipline Inspection (CCDI) since March, as well as an increase of the public's focus on anti-corruption activity, identified by the tracking of anti-corruption references on Baidu.