Stimulating Consumption Value of Vouchers

retail sales shrank 20.5 percent year on year, as the country suspended businesses, factory production and transport to contain the virus.

China’s surveyed unemployment rate in urban areas stood at 6.2 percent in February, up by 1 percentage point from January, according to the National Bureau of Statistics.

Despite business disruptions by the virus, 1.08 million new urban jobs were created in the first two months. Meanwhile, 2.19 million jobless people received 6.1 billion yuan ($860.7 million) in unemployment insurance in the first two months.

As businesses are slowly recovering, analysts stress the need for an orderly resumption of work and production to provide people with a stable income through employment.

Only when employment and income are ensured would people have the ability to spend, said Ming Ming, an analyst with CITIC Securities, noting that measures proposed by the government would help underwrite purchasing power.

A meeting of the Political Bureau of the Communist Party of China Central Committee said on March 27 that impoverished people will be helped to return to their jobs or find employment, opening of malls and markets will be speeded up, and household and public spending will be expanded while maintaining the prevailing trend of new online consumption.

A package of macro policies and measures will also be introduced. The country will appropriately raise the fiscal deficit ratio, issue special treasury bonds, increase the scale of special bonds for local governments, and guide cuts in lending rates.

As the coronavirus pandemic has sparked panic and quarantine elsewhere across the world, business suspension and factory closures might be a new reality Western economies have to face for several months to come.

A separate report from S&P Global Market Intelligence noted that it could be some time before demand recovers and that the improving situation in China gives a hint of the postcoronavirus consumer landscape.

28.3%

23.7%