To help their people survive the hardship due to the widespread coronavirus pandemic, major countries have developed economic stimulus packages and provided money to their people. However, China did not do that this time. Beijing is betting that the consumption vouchers that it pushed the local governments to hand out will build up consumption in China.
These vouchers, normally will expire within a certain period, e.g. 30 days, and are limited to consumption in the local area.
Stock Times reported that Li Xunlei, Chief Economist at Zhongtai Securities, a large security holding company under the Shandong Provincial government, said that, in 2009, when handling the secondary mortgage crisis in China, Hanzhou City, Zhejiang Province offered its residents 1 billion yuan (US $140 million) in consumption vouchers, and the city’s total annual consumption increased by 15.5 billion yuan. This showed a 15 times leverage from the consumption voucher.
Li is against the government spending so much money on infrastructure development, which does not directly stimulate consumption, and also creates excess housing supply and future problems.
Related postings on Chinascope:
- Economy: 460,000 Companies Stopped Operations and Tens of Millions of People Will Lose Their Jobs
- Economy: 150 to 200 Million People in China May Lose Their Jobs
- Economy: China’s Exports in January and February Dropped 17 Percent
- Economy: Near 8,000 Performances Cancelled in China, Causing 1 Billion Yuan Loss
Excerpt in Chinese:
地方政府发放的消费券，都不能网上使用，只能在本区域使用，拉动本地消费的目的很明显。
中泰证券首席经济学家李迅雷接受证券时报记者采访时表示，政府应该多发放消费券，消费券具有强大的拉动作用，而且占用财政资源较少，政府可以承担得起。
本次消费券推出金额较大的杭州市，其实早有经验。2009年1月开始，为了应对次贷危机，杭州先后发放了两期消费券。李迅雷团队估算，由于发放10亿元的消费券，杭州市2009年全年社零总额名义值增加约155亿元，也就是实际杠杆系数达到了15倍。如果考虑到在消费过程中缴纳一部分税收，实际杠杆率或许要高于15倍。
尽管各地政府在陆续发放消费券，但是从金额上看还比较小，而且覆盖范围还不够广，另一方面，政府在基建方面动辄都是数万亿投入，很不匹配。而且基建不少是增加产能供给，为未来增加了过剩隐患。
Source: Stock Times, April 1, 2020
http://stock.stcn.com/2020/0401/15791842.shtml