Is Chinese Food Doomed To Be Cheap?

Is Chinese Food Doomed To Be Cheap? - Menuism Dining Blog, October 29, 2013

A long playing theme that has puzzled restaurant observers and bedeviled Chinese restaurant owners is the shortage of high-end Chinese restaurants in the United States and the apparent inability of Chinese restaurants to charge premium prices. Nobody blinks about paying upscale prices for a broad range of other cuisines, but very few Chinese restaurants have been able to successfully rise above the point of being complimented on their outstanding value. So what’s the answer to this puzzle?

There is no mystery to the origins of cheap Chinese food in the United States, which once again stemmed from the history of Chinese immigration to the United States. As described in the previous article on Americanized Chinese restaurants, the character of the first century of Chinese food in the United States was molded by the fact that most all Chinese residents in the United States were rooted in a handful of rural counties outside of the city formerly known as Canton. Furthermore, Chinese Americans were reviled in the early years, and even decades later were subject to severe racial discrimination. Against this backdrop it is truly amazing that locals even began dining in Chinese restaurants in the late 19th century and became regulars in Chinese restaurants in the early 20th century. To enter America’s consciousness in the face of such enmity, one attraction of Chinese food was its low cost.

But these origins don’t explain why Chinese food retains its cheap connotation a century later. Many causes have been suggested for the continuing perception of Chinese food as being cheap. The most commonly cited culprit is price competition among Chinese restaurant owners. As indicated in my prior article on the lack of Chinese restaurant chains, there are some 41,000 Chinese restaurants in the United States, which exceeds the combined number of several of the country’s largest fast food chains. And this competition is rampant among both Americanized Chinese restaurants as well as within Chinese communities themselves. As noted in this article, Springfield, Missouri has nearly 100 Americanized Chinese restaurants in a city of 170,000. Meanwhile, in the San Gabriel Valley outside of Los Angeles, there are somewhere over 600 authentic Chinese restaurants, most of which offer economical lunch specials. In the Little Fuzhou section of Manhattan Chinatown there are restaurants which will sell you a full order of noodles in peanut sauce plus a cup of soup for $2, and where nothing on the menu exceeds $5. With this kind of competition, what Chinese restaurant can raise its prices and not lose much of its business?

Another major factor is the history my prior articles discuss. Having burrowed into the minds and stomachs of American diners based on good and cheap food, the roots of the success of the Chinese food industry in the United States may also be responsible for the limitation on upscale branding. Like other minorities, Chinese are well aware of how lasting racial stereotypes are, and cheap Chinese food may be another edge to that sword. Stereotypes aside, the reputation of Chinese food as being inexpensive is multigenerational and difficult to overcome, particularly with many Americans associating Chinese restaurants with takeout or delivery options, neither of which is synonymous with gourmet food. Like the actor typecast because of a recurring role in a TV series, the perception of Chinese food being economical and value-oriented may be next to impossible to overcome.

Another factor is the cost structure of Chinese restaurant food. The best known Chinese dishes are not loaded with expensive ingredients, particularly with Chinese cuisine not partial to serving whole slabs of meat, but rather cutting the meat up to mix with other ingredients, along with rice or noodles. It would be hard to charge premium prices for such fare. On the labor side, the usage of owner management, family labor, undocumented workers, and limited English speaking workers all serve to produce lower labor costs. As students of economics know, lower costs adjust the supply curve and results in a lower price point. And as demonstrated by the success of the Southwest Airlines business model, if you can undercut your competitor’s price by a wide amount, you go ahead and do it.

Closely allied is the level of service, or perhaps as many might say, the lack of service in Chinese restaurants. Fine dining goes hand-in-hand with a high level of service. But for customers of Chinese restaurants who are used to a value proposition for their food, a higher level of service may not be appreciated or something that they are willing to pay for. Along the same lines, fine dining is also accompanied by upscale décor, again something which raises the cost curve and which many Chinese restaurant patrons often have no interest in. Indeed, high service and fine décor are minor considerations for Chinese Americans who eat out, and the same mindset likely influences Chinese restauranteurs when they set up shop.

There are, however, a small number of successful upscale Chinese restaurants in existence. In restaurants like Mr. Chow on both coasts, Tommy Toy’s in San Francisco, WP24 in Los Angeles and Ruby Foo’s and a few others in Manhattan, you can blow a bundle on Chinese food in refined décor. But why can the total number of such restaurants be counted on your fingers, and perhaps a few toes? The answer is that these restaurants target a very small audience. The diners at these restaurants are generally well heeled, but also are relatively unsophisticated about Chinese food, as these restaurants serve Americanized Chinese food to a largely non-Asian clientele. While it may sound harsh to describe the target audience as being unsophisticated when it comes to Chinese food, the fact is that these restaurants generally are not taken seriously by knowledgeable restaurant critics or by the dedicated foodies who populate restaurant discussion boards on the internet, such as Chowhound. Indeed, similar comments about clientele can be made about the one Chinese restaurant chain that has successfully pushed a higher price point, P. F. Chang’s.

But there is also a model for high-end Chinese food which brings the promise of pricier Chinese restaurants in the future with a broader appeal. In San Francisco, Yank Sing has operated for many years in the fine dining category, offering authentic and haute Chinese food to a mixed audience of Chinese and non-Chinese diners for decades, taking the unique mantle from the legendary and now closed Imperial Mandarin restaurant in Hanford, California. The good news is that there appears to be the emergence of new group of Chinese restaurants offering upscale, but still authentic Chinese food appealing both to Chinese and non-Chinese diners. These include Martin Yan’s M Y China in San Francisco, as well as the Hakkasan chain which continues its rollout across the United States, which have garnered praise from critics and diners who know their Chinese food. Plus, there is now the prospect of more overseas Chinese restaurant operations headquartered in Asia setting up shop in the United States, such as the upscale Hai Di Lao hotpot chain in Arcadia, California. So while Chinese food is still synonymous with value, we may be in for a new era of good, authentic, and upscale Chinese food.