(Yicai Global) April 27 -- Several local governments in China are handing out millions of US dollars’ worth of tourism, fuel and other spending vouchers to get residents out and about during the upcoming week-long Labor Day public holiday and putting their hands in their pockets again as consumption stalls due to the impact of the Covid-19 outbreaks. But analysts say vouchers alone are not enough.
The Hubei Culture & Tourism Group issued CNY100 million (USD15.3 million) worth of coupons to tourists on April 26, covering more than 30 scenic spots and 50 hotels in the northern province. The vouchers can be used when purchasing tickets and booking hotels on the “Travel in Hubei” platform.
Meanwhile, the Changsha government in central Hunan province has distributed more than CNY30 million (USD4.6 million) in spending vouchers to residents that they can use in department stores, restaurants and beauty salons and on services such as medical care and babysitting.
And the department of culture and tourism in southwestern Yunnan province has released CNY12 million (USD1.8 million) worth of fuel vouchers and CNY8 million worth of tourism spending coupons. This is the first part of CNY100 million (USD15 million) in fuel coupons and CNY200 million in tourism vouchers that the province intends to issue between this month and December to get the province’s tourism industry back to previous levels.
Issuing vouchers is a good way to stimulate spending and will help market recovery, however the effect could be limited as the central government is still not encouraging the mass movement of people and tourists will also have concerns, Chen Qiankang, deputy dean of the School of History and Culture at Sichuan Normal University, told Yicai Global.
In order to boost consumption, policies need to focus on strengthening spending ability and restoring consumer confidence so that people are more willing to spend, said Yi Xiaoguang, president of the Chongqing Institute of Comprehensive Economics.
Once the outbreaks come under control, policies that target subsidies to residents may be more effective in increase spending, said Yang Chang, chief analyst of Zhongtai Securities.
Editor: Kim Taylor