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An editorial cartoon from a media outlet illustrating the wave of restaurant bankruptcies sweeping across China. Approximately two million establishments are projected to close their doors this year alone. / Courtesy of Economic Daily (Jingji Ribao)

The "gate of hell" has swung wide open for China's restaurant industry as bankruptcies fast become the new normal. Judging by a confluence of indicators, it appears almost certain that this grim reality will not reverse anytime soon. It is a well-worn adage that the Chinese are deeply serious about food. One need look no further than Sima Qian’s immortal historical chronicle, the Records of the Grand Historian (Shiji), which famously notes, "To the people, food is heaven." Consequently, dining establishments in China rarely go under under ordinary circumstances; in fact, anyone operating a food-related business could typically count on making a decent living, and with a bit of luck, striking it rich.

Countless success stories bear this out, most notably Haidilao, the globally renowned hotpot specialist. Founded in 1994 as a modest four-person venture by two young couples in Jianyang, Sichuan Province—the spiritual home of spicy cuisine—it has since grown into a premier dining empire across the Sinosphere, eclipsing conventional corporations. Its triumph lay in piercing straight to the heart of the Chinese passion for food and channeling it entirely.

Lately, however, the tables have turned so dramatically that not even a titan like Haidilao can be guaranteed survival. The gradual stream of restaurant closures that began several years ago has erupted into a veritable deluge, signaling that a true crisis has arrived this year.

The metrics paint a stark picture. According to recent consensus reports from media outlets including the Economic Daily (Jingji Ribao), nearly 500,000 food and beverage businesses shuttered their doors in the first quarter of this year alone. A simple extrapolation suggests that the total number of bankruptcies could hover around two million by the end of the year.

The ground reality is equally bleak, driven primarily by the onset of a severe liquidity crunch colloquially known as qianhuang—a chronic cash drought gripping the market. Consumers simply lack the disposable income to spend on dining, even if they wish to. This has given rise to the popular trend of "beggar consumption," where individuals spend the absolute bare minimum just to scrape by. Under such hostile conditions, establishments cannot survive without immense financial resilience. It is no exaggeration to say that the darkest hour has dawned over China's dining scene.

                                                                                                          Hong Soon-do