In recent years, the emergence of “community canteens” in mainland China, targeting primarily the elderly, saw a surge in popularity. However, after official subsidies were cut off, many of these canteens struggled to sustain their operation and eventually had to shut down on a large scale, leaving many elderly who had purchased canteen meal cards with nowhere to seek refunds. Experts point out that four major “problems” have led to the difficulty of survival for these “community canteens”.
The rise of community canteens began with an official document issued after the 20th National Congress of the Communist Party of China. On October 31, 2022, the Ministry of Housing and Urban-Rural Development and the Ministry of Civil Affairs of the CPC issued a notice regarding the implementation of pilot projects for comprehensive community building. It required pilot projects in various locations to plan and construct projects such as kindergartens, elderly service centers, medical service stations, and to provide convenient commercial service facilities such as canteens, pharmacies, and domestic service outlets for residents, offering a so-called “one-stop” service.
The purpose of this notice was to promote the pilot project of large community canteens nationwide – requiring counties and districts to select 3 to 5 communities for pilot projects and to promote them nationwide after 2 years, constructing projects that provide “comprehensive” services for people’s livelihoods, including community canteens. Subsequently, community canteens sprang up across China. It is estimated that approximately 1,700 community canteens were established throughout China within a year of the issuance of the notice.
Unexpectedly, the first batch of community canteens, such as one in Shenyang City, Liaoning Province, closed their doors just over a month after opening. This news became a hot topic at the time.
Over the following months, the wave of community canteen closures expanded. In early 2023, a field investigation by the official CCP media “Ban Yue Tan” revealed that the first batch of community canteens (large canteens) were operating at a loss and had to cease business.
In the past two years, the trend of community canteens closing down has swept through major cities including Beijing, Xi’an, Hangzhou, and Suzhou.
An article by Zhang Ping, a special economic expert, observer, and senior economist for Xinjing Net, recently stated that data shows 1,700 community canteens have ceased operations. Industry insiders have summarized several key reasons for this:
Firstly, the community canteens are too far away, making it difficult for many elderly people to reach them.
Secondly, the recharge cards for the community canteens are unreliable: many community canteens lure the elderly to purchase recharge cards by offering promotions such as receiving an extra $100 for every $500 recharged. The elderly, thinking it’s a good deal, buy these cards. However, within three months, due to poor management, the canteen owners disappear, leaving the elderly with worthless cards and no recourse.
Thirdly, the community canteens introduce new tactics: When the community canteens first open, they heavily promote discount activities like offering a 30% discount for the first three days of operation or a 40% discount on charity meals every Tuesday. Once the nearby elderly residents start frequenting the canteens, the prices secretly increase.
Lastly, without government subsidies, the community canteens can no longer survive.
In the past years, the community canteens flourished mainly due to economic subsidies provided by local governments. However, in recent times, various local governments have faced financial constraints and have halted subsidies to community canteens, leading to their eventual collapse.
An article by Assistant Professor Lai Rongwei from Longhua University of Technology in Taiwan, reported by the Voice of America, suggests that the community canteen model not only goes against market laws but also has a negative impact on the entire industry chain. He argues that projects like these, under the guise of “benefiting the common people”, essentially organize unemployed individuals and housewives to engage in unprofitable business, distorting the superiority of market economy.