Dongguan retail sales drop in wake of sex industry clampdown

The total retail sales growth of Dongguan, South China's Guangdong -Province, registered a remarkable slowdown during the first quarter of 2014, Shanghai-based China Business News (CBN) reported on Thursday, citing data from the local statistics bureau.

The city's total retail sales grew by 8 percent from the same period last year, ranking 20th among the 21 prefecture-level cities in Guangdong Province.

The mediocre growth rate reflected the slump in the local hotel business after the province launched a crackdown campaign on prostitution since February, as hotel revenues are counted as part of the total retail sales, the report said, citing an unnamed public servant with a Guangdong statistics department.

Affected by the slow growth in the retail sector, Dongguan's annual GDP growth stood at 7.3 percent during the first quarter, 1.3 percentage points lower than that of 2013, the local bureau of statistics said.

The crackdown campaign, which has included the sacking and arrests of some police officers, nabbing down of hundreds of suspects and the closure of entertainment venues, began after State media China Central Television exposed the city's underground sex industry on February 9.

China's first and second-tier cities typically have around 20 five-star hotels while Dongguan, a third-tier city with a predominant manufacturing industry, boasts 22 five-star hotels and 90 rated hotels, CBN reported.

Experts estimated that the tertiary industry accounted for 53 percent of the local economy while the related economic output could hit billions of US dollars.

Some local officials have uncertain attitude toward the crackdown on the city's sex industry due to its function as an economic driver, the report said, citing Lin Jiang, a professor with Guangzhou-based Sun Yat-Sen University.