Drive to cut spending bites into gift biz

The fireworks industry is pursuing several strategies to cope. Some companies are turning to villages and smaller towns, said Zhong. Manufacturers also need to invest heavily in environmentally friendly, safer products to reverse the current decline, he added.

The sector is just one of those industries that's been affected by the government's anti-corruption and austerity campaigns. Expensive restaurants, luxury retailers, conference venues and five-star hotels have also been hit.

Now, with China's biggest holiday just around the corner, companies that print cards and calendars, distill liquor and offer gift items are feeling the pinch.

The Commission for Discipline Inspection of the Central Committee of the Communist Party of China, the top anti-corruption body, issued a statement on Nov 21, forbidding the use of public funds for greeting cards, gifts and fireworks.

Business is at a near-standstill for greeting card and calendar producers, which should be experiencing boom times. As the government's policies have taken effect, many printers that depend on large orders from public organizations or government departments have seen their business dry up.

"I did not get any greeting card or calendar orders from State-owned companies this season," said a manager surnamed Liu at a printing house based in Hebei province.

Liu's company has two offices in Beijing. Most of his clients are enterprises in the capital city. To offset the losses from the greeting card business, the printer has turned to making photo albums and brochures, he said.

"We're trying our best to change our business model since the government released regulations to restrict spending on this sector with public funds," he added.

Recession

The recession is also visible in Yiwu, Zhejiang province, which is the largest distribution center for calendars and cards in the province.

The city has about 200 enterprises making calendars, which have already lost a total of 1 million yuan ($164,000) as a result of the new regulations, according to the city's cultural gifts association, Xinhua News Agency reported.

Jin Jingxi, head of the association, told the news agency that the market for calendars and greeting cards has been shrinking for some time. Government departments and State-owned enterprises were formerly the main clients, Jin added.