China's commerce ministry has recognized the significance of consumption coupons issued by local governments over the Spring Festival holiday, saying they are playing a positive role in stimulating domestic demand. The ministry said on Monday a comprehensive social security system also weighs in boosting consumption.
BeforetheSpringFestival,municipalgovernmentsofsouthern
HangzhouandsouthwesternChengduissuedcouponsvaluedat
100millionyuanand38millionyuanrespectivelyforlocal
registeredlow-incomefamilies.
Before the Spring Festival, municipal governments of southern Hangzhou and southwestern Chengdu issued coupons valued at 100 million yuan and 38 million yuan respectively for local registered low-income families.
An estimated total of 380-thousand residents in Chengdu were to receive coupons. While Hangzhou reported a higher figure of about 580-thousand. Nearly half of them were primary and middle school students.
The coupons, ranging from 100 to 200 yuan for each person, can be used in places such as local supermarkets, cinemas and book stores.
Both cities reported a surge of customers in local markets during the holiday. Now more cities are expected to follow the suit.
Vice commerce minister Jiang Zengwei said the coupon issuance is practical and effective under the current situation.
Jiang Zengwei, Vice Minister of Ministry of Commerce, says, "the issuance is a special action taken under special situation. It's proper and feasible. As far as I'm concerned, cities like Chengdu and Hangzhou have seen a pull-up effect by the coupons on stimulating local consumption."
But Jiang still stressed the importance of increasing earnings for the country's low-income families, saying coupon issuance is just a temporary measure tospur domestic consumption.
He noted that long-term solutions to stimulate consumer confidence are tied to the establishment of a sound social security system.
Jiang Zengwei says, "the Chinese government is working on two major reforms to drive up domestic consumption. One is in the healthcare system, for which we have been preparing and is about to launch soon. The other is in education scheme. It's soliciting opinions. Once implemented, both will help enhance consumption, in particular in rural areas."
While demands in global markets have shrunk, the Chinese government has continuously stressed the importance of exploring domestic consumption, especially in rural areas. The government has also issued series of support plans for the nation's key industries. And more stimulus programs are expected to be launched soon. The commerce ministry said these measures will also speed up a recovery in spending.
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