China urgently needs to issue ‘most effective’ cash coupons to boost insufficient consumption, economist says
- Prominent economist Teng Tai says cash coupons are the ‘most effective way’ to encourage consumption
- Recovery in consumption was a major source of growth last year, but Beijing has failed to heed calls to issue cash coupons and consumption vouchers
China should refrain from low efficiency infrastructure investment, and instead learn from other economies and issue cash coupons to consolidate consumption growth and drive up the overall economy, a prominent economist said.
Teng Tai, director at the Wanb Institute in Beijing, said that China should learn from the likes of the United States, Japan, South Korea, Australia and Singapore.
“The most effective way to encourage consumption is to issue cash [coupons],” he said in an interview with Chinese media Yicai published earlier this week.
“As long as a person has money, they’ll spend. A one-dollar cash coupon will multiply to three to five dollars of spending.”
China is in more urgent need to issue cash coupons
“Compared with Europe, the US and Australia, China is in more urgent need to issue cash coupons,” Teng added.
He said money saved from eliminating inefficient infrastructure can be turned into disposable income, which stood at 52 trillion yuan (US$7.2 trillion) in China in 2022.