(Yicai Global) March 20 -- Many Chinese provincial and municipal governments are handing out coupons worth tens of millions of dollars to spur consumption in sectors heavily hit by the Covid-19 outbreak.

The reason for the coupons is to increase consumption to give the economy a short-term boost, Securities Daily cited Wang Qing, chief macro analyst at Beijing-based Golden Credit Rating, as saying. The policy should be effective if demand surpasses supply, he continued.

Short-term demand has shrunk because of Covid-19, added Cao Xiao, director at the Quantitative Finance Research Center under Shanghai University of Finance and Economics. Governments granting coupons can increase purchasing power and therefore demand, which should boost production, investment and other activity to spur the economy, Cao said.

Jiangxi province is giving workers two-and-a-half days off each week and offering discounts on scenic spots to help citizens travel safely while boosting the tourism sector, and Nanjing is giving CNY318 million in credit to spur consumption in catering, sports, literature and tourism, with each coupon worth CNY100 (USD14.1) or CNY50. The first batch of the vouchers in Nanjing, totaling CNY50 million, were handed out from March 15.

Shandong's provincial capital Jinan is handing out CNY100 million (USD14.1 million) to support the tourism and culture sectors and has handed out CNY20 million worth of coupons for tourist attractions, travel agencies, movie theaters, book stores and other venues.

Ningbo in Zhejiang province began giving out CNY100 million 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 worth CNY30 million in the capital, and Gome Retail Holdings has handed out CNY120 million for home appliances. Governments in Hebei, Sichuan and other regions are also encouraging companies to hand out vouchers to spur consumption.

Editor: James Boynton