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China’s local authorities are giving free coupons to stimulate consumption crippled by COVID-19

China is the world’s second-largest economy after the US and data provided by the country’s National Development and Reform Commission showed that consumer spending contributed to 57.8 per cent of China’s GDP growth in 2019. The country’s GDP is forecast to drop from 6 per cent to 4.5 per cent as a result of this coronavirus pandemic that swept through China since December 2019.

The projected drop will usher in China’s weakest gross domestic product (GDP) growth since it began keeping records in 1990. In order to curtail the effect of a reduction in consumer spending on the economy, 23 central government departments had issued guidance in March proposing an increase in consumer spending in an attempt to reduce the economic impact of the health crisis.

In this light, several local governments in China have commenced the distribution of free digital coupons usable on mobile payment platforms like Alipay and WeChat Pay, the South China Morning Posts reports. This is in a bid to help stimulate domestic consumption as the country trie to recover from the COVID-19 outbreak. The Chinese central government is also reportedly encouraging officials to lead the effort in local consumption. Several government heads from Nanjing city, Shandong, Hunan, Guangdong and Hainan were sighted in public doing activities includes as shopping and dining at restaurants.

The report reveals that the Jiaxing city in Zhengjiang province had announced on Sunday that it would issue as well 200 million yuan (US$28.2 million)worth of digital consumers coupons to the public, of which 150 million- yuan could be redeemed through Tencent’s WeChat Pay.

Further, the Hunan Federation of Trade Unions is reported to have announced last Thursday that employees and trade union -members in the province would also receive vouchers that can be used at 340,000 merchants in the Hunan, also via WeChat Pay. In addition, Hangzhou, the capital of Zhejiang province, is said to have perfected plans to dole out 1.68 billion yuan worth of consumption coupons which will support more than six million local offline merchants, in the sectors ranging from retail to catering, to stimulate consumption. The city is reported to have commenced the distribution of the first batch of two million coupons valued at 50 yuan each last Friday. The coupons are said to be redeemable when paying for items, either online or offline, using Alipay.

In Nanjing, the capital of Jiangsu province, 318 million yuan worth of consumption coupons that can be used for services such as catering, sports and tourism, as well as welfare for low-income communities, have been distributed. Nanjing citizens were reportedly able to apply for the coupons, that provided discounts of 50 or 100 yuan,op through the local public service app “My Nanjing” between March 15 and March 22. The coupons were then redeemed as discounts on Alipay.

Finally, in Guangxi city, distribution of coupons will run from March 26 – May 26, with a daily quota that is offered to residents and tourists visiting the province. The coupons are redeemable via Alipay for dining, shopping and hotel rent.


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