(Yicai Global) Dec. 21 -- Several regions in China, including Jiangsu province, Shanghai, and Wuhan, are issuing vouchers to incentivize consumption amid the Covid-19 pandemic this year but experts say the main problem is the slowing income growth.

Following a slew of similar announcements, eastern China's Jiangsu province said on Dec. 19 that it will launch a winter shopping carnival with over 1,800 events and issue e-yuan vouchers worth more than CNY250 million (USD35.9 million).

The issuance of coupons and subsidies can stimulate the market in the short term but it is necessary to increase residents' incomes and maintain room for innovative development to make the short-term boost last, Zeng Gang, research institute head at East China Normal University, said to Yicai Global.

Because of the multi-year pandemic, people's income growth has slowed and they have become more inclined to save money, according to an official at the Central Committee for Financial and Economic Affairs. China should boost both urban and rural residents' incomes via multiple channels and encourage them to consume more, the official added.

Last month, China’s total retail sales of consumer goods dropped by 6 percent to CNY3.9 trillion (USD554 billion) from a year ago, based on official data. Such sales may remain low for one or two months but could rebound around late March 2023, according to Wang Qinghe, chief macro analyst at Golden Credit Rating International.

Regions across China have joined the anti-belt-tightening effort. Zhejiang's Shaoxing has offered coupons to residents to promote consumption, particularly among migrant workers.

Shanghai has invested CNY1 billion (USD143.5 million) and granted three batches of vouchers to spur consumption. The eastern megacity aims to support residents' purchases of automobiles and property while supporting innovative business concepts and creative events.

On Dec. 9, Shenzhen released subsidies targeting purchases of electronics and home appliances, covering up to 15 percent of the cost. Guangdong’s capital city of Guangzhou has granted three batches of coupons, covering the fields of catering and hospitality, as well as offline and online retail.

Moreover, Hubei's Wuhan, Sichuan's Chengdu, Hainan's Haikou, and the provinces of Fujian and Hebei have given vouchers to boost consumption related to tourism, dining, and home appliances.

Editors: Zhang Yushuo, Emmi Laine, Xiao Yi