The Chinese government is hoping to jumpstart store spending by giving out billions worth of vouchers.
The Chinese government has given out vouchers worth billions of yuan. It is their hope that people will go back to stores and start spending again after the pandemic has shocked people to stop.
Apart from the vouchers, the government has also added many other “financial sweeteners” to encourage spending.
Reports state that the spread of the pandemic has spread in China. This has led to the reopening of various services and establishments. Despite this, customers are still wary of heading out and spending their money.
Instead, they have both their physical and economic well-beings in mind. People’s lives in China are also set against the background of rising unemployment rates.
When the lockdown was set in place, it was to control the spread of the Coronavirus pandemic. However, another effect was the contraction of the world’s second largest economy within 2020’s first quarter.
One concrete result of this contraction can be seen in China’s retail sales. In this time period, retail sales have dipped by a fifth in the year’s first two months.
Now, with the lockdown looking to be extended the world over, the Chinese government is thinking about their economy. Their goal is to make people’s demand start working again. With conventional methods failing, they have to look for more creative ways.
Certain cities have suggested that weekends last for two and a half days. This should allow for a boost to people’s spending.
In order to show people that it is a worthwhile endeavor, certain government officials are leading by example. These officials are going out and eating at various establishments. They will also be shopping at various malls and shops.
Suning, a major retail outlet for electronics, clothing, and food is also seeking ways to encourage spending. Just last month, they gave out 600 million yuan worth of vouchers. This equates to roughly £70 million.
Tencent has also gotten in on the jumpstarting action. They have recently launched a payment scheme that allows people to buy now and pay later. This is a credit feature on their messaging app WeChat.
A head of equities at Fidelity International indicated the importance of people’s spending in China. This head said that if people were to return to spending, this would indicate how the rest of the world react as well.
He also added that certain segments are showing recovery, however slow it may be. The important thing is the confidence of the consumers to carry forward the rate of recovery.