Prostitution clampdown on Dongguan may knock 50 billion yuan off its economy
The crackdown on Dongguan's vice trade may cost city businesses, including hotels, shops and restaurants, at least 50 billion yuan (HK$63.5 billion) - or one-tenth of the local economy - analysts said.
The crackdown on Dongguan's vice trade may cost city businesses, including hotels, shops and restaurants, at least 50 billion yuan (HK$63.5 billion) - or one-tenth of the local economy - analysts said.
The raids were also seen as a warning from the central government to provincial authorities to put a higher priority on tackling corruption and upholding moral standards after decades of economic development.
Video: Dongguan prostitution exposed by CCTV
Dongguan, a city of 8.2 million that sits between Shenzhen and Guangzhou, has been in the spotlight since China Central Television aired an exposé on its thriving sex industry on Sunday. Afterwards, the city mobilised more than 6,000 police to raid nearly 2,000 entertainment venues.
Guan Qingyou , a senior economist for Minsheng Securities, said in a note to investors that about 50 billion yuan - or at least 10 per cent of the city's gross domestic product - could be wiped out due to the crackdown.
"The sex industry relates directly or indirectly to many industries including hotels, restaurants, cosmetics, daily necessaries, travel and so on," Guan said.
