The city of Hangzhou has handed out free vouchers to boost domestic consumer spending rates. Still, however, officials concede that the $100 million voucher plan is only a small effort in increasing consumer confidence more broadly. Indeed, many analysts believe that such an increase first requires the existence of a strong social safety net in China. From Sharon LaFraniere of the New York Times:
Chen Jue, 87, could hardly believe her good luck. “Can these vouchers really buy things?” she asked, amazed, at a community center decorated with a six-foot-high photograph of Mao. “The government is very good to us! I will buy flowers, and I will also buy goldfish.”
Since January, more than a fifth of the five million residents of the Hangzhou area have received the same vouchers. Hundreds of thousands more vouchers will be issued soon. Hangzhou officials hope the coupons will stimulate buying and avert the worst of an economic downturn that has eviscerated factory after factory here.
But even Mr. Shou, who helps oversee the $100 million program, acknowledges that vouchers will not cure Hangzhou’s slump — or China’s. The problem is more basic: China’s economy thrives on making things that overseas customers want to buy. Chinese consumers tend to be less eager shoppers. Conditioned to save for medical expenses and old age, they sock away more than one-fourth of their incomes — far more than Westerners, especially Americans.
According to Caijing, other cities also have similar voucher plans in place. Hangzhou in particular uses 6 different types of vouchers:
*Local resident vouchers can be used for discounts on daily purchases;
*Vouchers for students for school fees;
*Vouchers for the unemployed that can be used for vocational training;
*Enterprise vouchers that companies can give in lieu of wages to employees, who can use them for their own purchases;
*Government vouchers that government agencies can give to welfare group;
*Vouchers for domestic tourists that can be used at 180 designated outlets, including restaurants, hotels, tourist attractions even licensed massage parlors.
