The CEO of payments giant Alipay says that the consumption vouchers issued by Chinese authorities to help deal with the short-term economic impacts of COVID-19 should be used as a long-term policy tool.
At a discussion session held by the People’s Political Consultative Conference on 13 May Ant Financial CEO Hu Xiaoming (胡晓明) called for “converting consumption vouchers from short-term emergency tools into long-term policy levers.”
“Let consumption vouchers become a core measure for the next step in work and production resumption and the driving of consumption,” said Hu.
Zheng Bingwen (郑秉文), chair of the World Social Welfare Research Centre of the Chinese Academy of Social Sciences (CASS), called for Alipay and other online platforms to “comprehensively open up” consumption voucher products and technologies.
After the normalisation of the pandemic Zheng believes that industries and vendors will be able to actively use consumption vouchers as an innovative means for attracting customers and drawing business.
Over 19 billion yuan (approx. USD$2.68 billion) in consumption vouchers have already been issued across 170 Chinese cities, with some estimates putting the total value of the vouchers scheduled for issuance at over USD$7 billion.
Chinese authorities around the country have enlisted the assistance of key financial institutions and companies to help with the mammoth distribution process, including Agricultural Bank of China, China UnionPay and Ant Financial.
Since March Ant Financial’s Alipay has helped to issue digital consumption vouchers in over 100 Chinese cities.
A report from the state-owned Economic Daily the estimates that these vouchers have a “multiplier effect” of over 8-fold, or even as high as 15-fold, meaning that every one yuan in Alipay consumption vouchers issued directly drives at least 8 yuan in consumption.