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Consumption rides stimulus steps toward recovery from pandemic

By FAN FEIFEI | China Daily | Updated: 2022-06-01 09:17
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Shoppers look at notebook computers at a JD store in Xi'an, Shaanxi province. YUAN JINGZHI/FOR CHINA DAILY

Shopping coupons, cuts to purchase taxes on passenger vehicles and steps to boost sales of big-ticket items like automobiles and home appliances are expected to stimulate consumers' purchasing appetites and promote the recovery of consumption, experts said.

Given that consumption has been hit hard by the resurgence of domestic COVID-19 cases, more supportive policies should boost employment, increase household incomes and enhance their purchasing power in order to further unleash consumption potential and stabilize economic growth, they said.

South China's metropolis of Shenzhen in Guangdong province began to issue digital renminbi red envelopes worth 30 million yuan ($4.5 million) to local residents through on-demand services platform Meituan on Sunday, in a bid to boost consumption and business recovery.

The city has also unveiled a slew of measures to spur consumption through discounts for consumers who purchase products like new energy vehicles, consumer electronics and home appliances.

Other provinces have accelerated steps to distribute consumption vouchers. Southwest China's Guizhou province has been distributing coupons worth 140 million yuan since Monday, which can be used at restaurants, cultural attractions and sports venues.

Taiyuan, capital of Shanxi province, which had issued coupons worth 120 million yuan, will issue more coupons worth 420 million yuan to boost consumption in the fields of catering, retail, home appliances, tourism and cars.

The State Council, China's Cabinet, has rolled out 33 measures to stabilize economic growth. The measures include spurring consumption of automobiles, home appliances and other big-ticket items.

Meanwhile, the Ministry of Finance and the State Taxation Administration announced on Tuesday that purchase taxes on passenger vehicles priced no more than 300,000 yuan and with no bigger than 2-liter engines, and bought between June 1 and Dec 31, will be halved.

The Ministry of Industry and Information Technology and three other central departments issued a notice encouraging local governments to roll out measures to encourage spending on new energy vehicles and home appliances in rural areas.

Wang Yun, a researcher with the Academy of Macroeconomic Research, said vouchers distributed by local governments play a vital role in unleashing consumption demand in the short term and bolstering the recovery of consumption, especially in hard-hit sectors like catering, offline retail, culture, sports and tourism.

More efforts are needed to further cut taxes and fees to help small and medium-sized firms tide over difficulties, increase capital input in public services and step up consumption subsidies, said Zhao Ping, deputy head of the Beijing-based Academy of China Council for the Promotion of International Trade.

Chinese e-commerce giant JD said orders for presale products from the post-1995 generation consumers surged 75 percent year-on-year in the run-up to the June 18 shopping carnival. The festival, which was just a one-day event when it started but now spans several days, kicked off at 8 pm on May 23.

Festival-related sales revenue of domestic consumer electronics brands such as Xiaomi, Lenovo and Huawei has already surpassed 100 million yuan.

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