China’s flagging consumer spending prompts cities to hand out tens of millions of yuan in shopping vouchers

China’s retail sales growth slowed in November, as coronavirus outbreaks continued to disrupt production and the labour market

Consumption’s contribution to China’s gross domestic product growth has declined since the start of the year

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China’s retail sales growth slowed in November, as coronavirus outbreaks continued to disrupt production and the labour market, with consumption’s contribution to China’s gross domestic product growth having declined since the start of the year. Photo: Getty Images

Published: 8:00pm, 23 Dec 2021

Chinese cities are giving out tens of millions of yuan worth of vouchers to boost consumer spending dampened by weak economic growth and stringent coronavirus containment measures.

Starting early in December, a number of cities including Nanjing, Zhengzhou, Hefei and Chongqing are promoting local consumption with vouchers for restaurants, entertainment, tourism and other consumer activities.

Hefei in the eastern province of Anhui is set to distribute 40 million yuan (US$6.3 million), one of the largest handouts across the country, as it seeks to promote spending in restaurants, shopping malls and supermarkets, and boost car sales.

China’s northeastern Jilin province will roll out vouchers for entertainment and tourism-related activities worth 10 million yuan, focused on promoting local ice and snow activities.

In Yining, in the Xinjiang Uygur autonomous region, hundreds of thousands of vouchers have been sent out by more than 400 businesses since early December, boosting direct or indirect spending by tens of millions of yuan, according to a Securities Daily report.

Chengdu and Guizhou are also distributing coupons to boost local tourism and recreational services, while Hengshui in the northern province of Hebei is set to give out 3 million yuan (US$475,000) worth of vouchers for residents to spend at designated supermarkets.

The new round of stimulus follows a warning at China’s tone-setting annual central economic work conference earlier this month about a contraction in consumption, supply shocks and weaker growth expectations.

China’s retail sales growth slowed in November, as coronavirus outbreaks continued to disrupt production and the labour market, with the contribution of consumption to gross domestic product expansion declining since the start of the year.

The poor don’t have the cash to use the coupons while the wealthy don’t care for them

Peng Peng