Regional governments around China are stepping up their issuance of consumer vouchers in the wake of the COVID-19 outbreak in order to prop up economic activity.
As of 15 April over 30 cities around China have already issued more than 5.6 billion yuan in consumption vouchers, with the city of Wuhan making 20 million yuan in electronic consumption vouchers available on that day alone.
Hu Yifan (胡一帆), chief China economist for UBS, said to 21st Century Business Herald that compared to cash allocations consumption vouchers are a more direct way of driving consumption and stimulating the economy given that cash can be squirrelled away.
“We expect that more cities will join the ranks, and that eventually the scale of consumption vouchers issued nationwide could reach around 50 billion yuan (approx. USD$7.07 billion) said Hu.
Compared to the last time that consumption vouchers were issued en masse in China in 2009, Hu highlights the adoption of electronic vouchers which have a usage rate in Chinese cities of over 90%, particularly given the increased use of online purchasing and electronic payments by older residents.
“This round of electronic consumption vouchers has significantly upgraded consumption and provide more general benefits,” said Hu.
“For example, the first round of consumption vouchers in Hangzhou has driven over 13-fold consumption leverage.
“Certain consumption stimulus policies in the past have focused on key industries such as home electronics and automobiles.
“The beneficiaries of this round of consumption vouchers are broader, and micro, small and medium enterprises in all industries and sectors are benefiting.”
Data from Alipay, which has been responsible for issuing a large number of electronic vouchers, indicates that over 10 million offline vendors are set to benefit from consumption vouchers, of which over 90% are micro, small and medium-sized businesses.
Timeline of consumption voucher issuance since COVID-19 outbreak
- 2 March: Jinan province issues 20 million yuan in vouchers for cultural and tourism sector.
- 5 March: Jiande in Zhejiang province issues 10 million yuan in tourism consumption vouchers to tourists from outside the region.
- 11 March: Jining in Shandong province announces issuance of 100,000 yuan in vouchers.
- 12 March: Nanjing issues 318 million yuan in consumption vouchers to municipal residents and disadvantage groups.
- 12 March: Zhejiang announces provision of 1 billion yuan in cultural and tourism consumption vouchers and 100 million yuan cultural and tourism consumption “big red packet.”
- 13 March: Ningbo announces that it will provide 100 million yuan in cultural and tourism consumption vouchers.
- 16 March: Anhui announces that it will work with enterprises to jointly provide 100 million in consumption subsidies.
- 17 March: The Hunan province union issues consumption vouchers to all members.
- 18 March: Hebei province issues 15 million yuan in physical education consumption vouchers.
- 18 March: Yinchuan announces plan to issue consumption vouchers.
- 18 March: Chengyang district in Qingdao provides 10 billion yuan in electronic consumption vouchers to all of it residents.
- 19 March: Hangzhou issues 50,000 tourism consumption vouchers Wirth up to 10 million yuan.
- 19 March: Beijing teams up with over 300 enterprises to issue 150 million consumption vouchers to municipal residents.
- 20 March: Qingdao announces plans to issue 340 million yuan in physical health consumption vouchers.
- 21 March: Shenyang’s Heping district issues 1 million yuan in electronic consumption vouchers.
- 22 March: Nanjing provides physical education vouchers via lottery.
- 23 March: Changzhou in Jiangsu province issues 300 million travel consumption vouchers.
- 23 March: Deyang in Sichuan province issues 40,000 meal vouchers.
- 23 March: Luyang district in Hefei issues 10 million consumption vouchers.
- 23 March: Jiangxi provinces announces issuance of electronic consumption vouchers throughout the province in the month of April.
- 24-26 March: Guangxi provinces issues 200 milling yuan in consumption vouchers via Alipay.
- 27 March: Hangzhou issues a total of 1.68 billion yuan in consumption vouchers to all municipal residents.
- 27 March: Chongqing’s Yuzhong district issues 7 types of consumption vouchers worth nearly 10 million yuan.
- 1 April: Hangzhou issues 50 million yuan in consumption vouchers.
- 1 April: Foshan in Guangdong provinces issues 100 million yuan in consumption vouchers that can be accessed via Alipay.
- 3 April: Hefei in Anhui province issues 10 million yuan in consumption vouchers.
- 8 April: Zhangjiagang in Jiangsu province issues 30 million yuan in consumption vouchers.
- 10 April: Chongqing, Foshan, Neijiang in Sichuan province, Xuancheng in Anhui province, Liyang in Jiangsu province and other cities issue over 200 million yuan in consumption vouchers.
- 5 – 11 April: Inner Mongolia issues 40 million yuan in consumption vouchers.
- 11 April: Jiangxi province issues over 40 million yuan in consumption vouchers that can be accessed via Alipay.
- 15 April: Wuhan issues 20 million yuan in consumption vouchers.