(Yicai Global) March 24 -- Nanjing in China's eastern Jiangsu province, one of the country's first cities to give out consumption coupons to neutralize the economic fallout of the novel coronavirus, has finished issuance of 670,000 of the vouchers to its residents and thereby boosted consumption by nearly CNY10 million (USD1.4 million) in five days.
The city, which is the provincial capital, completed its third round of e-coupon issuance via an online lottery yesterday, and the gift certificates in this round, worth CNY50 million, consist of 60,000 dining coupons, 60,000 sporting event and equipment vouchers, 30,000 book coupons and 30,000 ones for mobile phones and data plans, Xinhua News Agency reported today.
Several other Chinese provinces and cities are also doling out vouchers worth tens of millions of dollars to fuel consumption in sectors on which the Covid-19 outbreak has taken a heavy toll.
The aim of these gift tickets is to give the economy a short-term shot in the arm, Securities Daily cited Wang Qing, chief macro analyst at Beijing-based Golden Credit Rating, as saying. This policy will prove effective if demand outstrips supply, he added.
Nanjing used 34,522 e-coupons from March 18 to March 22 to raise consumption by CNY9.4 million, and the actual increase totaled CNY6.1 million, even deducting the amount offset by the vouchers, per the city's official data management platform.
Nanjing was to issue CNY318 million in consumption coupons, with each worth CNY100 (USD14.11) or CNY50, the city announced on March 13, saying vouchers for eating out, sports, books and data services and handsets were to issue to all residents in three rounds of online lotteries, with other coupons in special categories to be issued according to the city's rules.
Real Economy Reeling
Ningbo, a port city in southeastern Zhejiang province, and eastern Shandong's provincial capital Jinan have also issued the gift certificates to promote the real economy's recovery from the virus. These coupons' value nationwide had totaled CNY1.4 billion (USD197.6 million), as of March 19 per statistics National Business Daily reported.
Short-term demand has shriveled because of Covid-19, noted Cao Xiao, director at the Quantitative Finance Research Center under Shanghai University of Finance and Economics. Government grant of coupons can beef up local purchasing power and therefore swell demand, which should boost production, investment and other activity to spur the economy, Cao explained.
Southeastern Jiangxi province is idling its workers for two and a half days each week and offering discounts on scenic spots to boost the tourism sector, while Nanjing is distributing CNY318 million in credit to spur consumption in dining, sports, literature and tourism, with each coupon worth CNY100 (USD14.10) or CNY50. The first tranche of the vouchers in Nanjing, totaling CNY50 million, was handed out from March 15.
Jinan is doling out CNY100 million (USD14.1 million) to support the tourism and culture sectors and has given CNY20 million worth of coupons for tourist attractions, travel agencies, movie theaters, book stores and other venues.
Ningbo in Zhejiang province began dealing out CNY100 million worth of discount tickets for culture and tourism on March 13, and more than 300 companies in Beijing recently began a one-month promotional event.
Chinese e-tailer Suning.Com is also dishing out vouchers to the tune of CNY30 million in the capital, and Gome Retail Holdings has donated CNY120 million for home appliances.
Governments in eastern Hebei, southwestern Sichuan and other provinces and regions are also urging local companies to dispense vouchers to rekindle consumption in the aftermath of the coronavirus.
Editor: Ben Armour