Local governments in China issue free digital coupons to stimulate consumption amid coronavirus pandemic

Local governments in China issue free digital coupons to stimulate consumption amid coronavirus pandemic

  • Nanjing, the capital of Jiangsu, has distributed 318 million yuan worth of coupons, for use in services such as catering, sports and tourism
  • Consumer spending contributed to 57.8 per cent of China’s GDP growth in 2019, according to the National Development and Reform Commission

Local governments in China are distributing free digital coupons on mobile payment platforms like Alipay and WeChat Pay to help stimulate domestic consumption as the coronavirus pandemic hammers the world’s second-largest economy.

On Sunday, Jiaxing city in Zhengjiang province, announced that it would issue 200 million yuan (US$28.2 million) worth of digital consumer coupons to the public, of which 150 million yuan could be redeemed through WeChat Pay, operated by internet giant Tencent Holdings.

Last Thursday, the Hunan Federation of Trade Unions announced that employees and trade union members in the province would receive vouchers that can be used at 340,000 merchants in Hunan, also via WeChat Pay.

Hangzhou, the capital of Zhejiang province, plans to distribute 1.68 billion yuan worth of consumption coupons to support more than six million local offline merchants, in sectors ranging from retail to catering, to stimulate consumption. On Friday the city began distributing the first batch – two million coupons valued at 50 yuan each – that can be redeemed when paying for items, either online or offline, using Alipay.

Alipay is operated by Ant Financial, an affiliate of Alibaba Group which owns the South China Morning Post.

Nanjing, the capital of Jiangsu province, has distributed 318 million yuan worth of consumption coupons, for use in services such as catering, sports and tourism, as well as welfare for low-income communities. From March 15 to March 22, citizens in Nanjing were able to apply for the coupons, which provided discounts of 50 or 100 yuan, through the local public service app “My Nanjing” and redeem discounts via Alipay.

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In Guangxi, coupons will be distributed from March 26 to May 26, with a daily quota offered to residents and tourists visiting the province, redeemable via Alipay for dining, shopping and hotel stays.

These measures follow guidance issued by 23 central government departments in March on increasing consumer spending in an attempt to limit the economic impact of the health crisis. China’s gross domestic product (GDP) growth in the first quarter is forecast to drop from 6 per cent to 4.5 per cent, its weakest since records began in 1990, according to a Reuters poll.

Consumer spending contributed to 57.8 per cent of China’s GDP growth in 2019, according to the National Development and Reform Commission.

Meanwhile, Beijing has called on officials to lead the effort in local consumption. In recent weeks, government heads from Nanjing city, Shandong, Hunan, Guangdong and Hainan have been seen in public doing activities such as shopping and dining at restaurants.

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