Nov. 10 (Bloomberg) -- China's slowest growth in five years is finally making carpet salesman Edwin Hong pay attention to his doctor's advice: Stay off the hairy crabs.

An autumn delicacy in Shanghainese cuisine, the cholesterol-rich crustaceans can wholesale for as much as $80 a kilogram during their October-November season, or a quarter of the average monthly salary of a new university graduate in China's largest city.

``In times like these, your definition of what is a necessity changes,'' said Hong, 34, who supplies carpets for hotels and condominiums. ``Hairy crabs were a necessity for me in the past, but now they're looking more and more like an extravagance. My doctor will be very happy.''

Hong's customers are postponing projects and delaying payments as expansion in the world's fourth-largest economy fell to 9 percent in the third quarter, the slowest in five years. The 69 percent slump in the CSI 300 stocks index this year has wiped out $2.8 trillion in market value from the Shanghai and Shenzhen bourses.

Sales of hairy crabs are down by as much as 40 percent midway through the October-November peak season compared with previous years, said Li Bing, who runs a 12-hectare crab farm at Yangcheng Lake, a 90-minute drive from Shanghai. Day trippers come to dine at restaurants that line the lake -- famed for supplying the delicacy to Mao Zedong in 1958.

``Customers who used to come two or three times a week now come once a fortnight,'' said Li, 40, who has put on hold his plans to recruit distributors in other cities. ``I never expected the economy to deteriorate so quickly.''

Li used to send an average of 200 kilograms a day of hairy crabs to hotels and restaurants in Shanghai in past years. This year, he has averaged about half that.

Caterpillar Fungus

The crabs are not the only culinary casualty. From the city's Whampoa Club to makers of exotic Chinese herbal tonics, suppliers are feeling the effects of the slump.

Jin Tongyun, chairman of Yizhi Agricultural Co. Ltd. in Shanghai, said prices of the company's caterpillar fungus have fallen to between 40,000 yuan ($5,861) and 100,000 yuan a kilogram, from as much as 160,000 yuan a year ago.

The fungus, a parasite that kills caterpillars before growing out of their desiccated shells, is found predominantly in Qinghai province and Tibet and has been used to make tonics and traditional medicines for wealthy Chinese for centuries.

``People tend to spend less on luxury food because of fears of an economic recession,'' said Jin, 42. ``Sales have slumped 50 percent from the same time two years ago.''

Benny Shi, a sales manager at Sunrise Logistics (Shanghai) Ltd., a distributor of electronic parts, said his monthly allowance for meals with clients has been cut by 60 percent to 2,000 yuan.

Economic Winter

``The chilly winter of China's economy has just started,'' said Shi, 33. ``We are no longer able to take clients to high- end restaurants and order luxury food. The company's U.S. headquarters is firing people. We don't know when the lay-off wave will hit China.''

The Whampoa Club, in a restored historic building overlooking Shanghai's Bund, has had fewer patrons since the financial crisis escalated this year, said Chef and Chief Proprietor Jereme Leung. He expects companies to further reduce entertainment and meal expenses to cut costs.

``Everybody is impacted by the economic crisis,'' said Leung, 37, whose menu at the 200-seat Shanghainese restaurant includes hot sour lobster broth and Chinese ginseng seared cod, and where the average bill is about 600 yuan per person. ``It's going to take a while before people regain their confidence.''

Empty Lot

At Yangcheng Lake, Wu Yidan, 32, was part of a group of 14 diners who ran a gauntlet of restaurant touts in the half-empty parking lot in front of the stretch of waterfront eateries. A year ago he would have had trouble finding a parking space here, he said.

Wu, a broker with Shanghai-based Fortune Securities Co., and his friends went to Xieyoufang Restaurant to dine on hairy crabs at 85 yuan apiece. Asked how much the delicacies cost a year ago, he replied: ``I honestly don't remember; nobody cared about prices last year.''

To contact the reporters on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Judy Chen in Shanghai at xchen45@bloomberg.net

Last Updated: November 9, 2008 20:23 EST