Local govts in push to boost spending on services

BEIJING — In a fresh move to spur consumer spending, multiple cities across China have recently rolled out new voucher programs, targeting service sectors like catering, tourism, sporting events and performances.

Such efforts by local governments to effectively boost services consumption are aligned with the trend of upgrading consumer demand, said Wang Wei, an expert at the Development Research Center of the State Council.

Guangzhou, capital of South China's Guangdong province, is distributing dining vouchers worth 100 million yuan ($14 million), covering a wide range of options from quick snacks to full-course dinners. This marks the fifth wave of such vouchers in Guangzhou since last December.

Central China's Hubei province, meanwhile, is scheduled to launch a 100 million yuan consumption voucher program in late August. This initiative will increase the share of dining vouchers in this program to encourage customers to dine out — thereby creating a lively, communal atmosphere which fuels local businesses.

While some programs spice up daily life with dining vouchers, others encourage the pursuit of a different kind of feast, namely cultural experiences.

Shanghai in East China will allocate 500 million yuan from its municipal budget to the issuing of vouchers for the service sector in the second half of the year — with an initial round of 30 million yuan focused on cultural performances, including theater, concerts, comedy shows, immersive experiences, and esports events.

Notably, during a provincial basketball league campaign in East China's Zhejiang province, fans were able to use their game tickets to receive discounts at tourist attractions, local markets, restaurants and homestays in many cities. The province issued 96.66 million yuan in vouchers for culture, tourism, sports, and shopping throughout the preliminary phase.

Service sector vouchers have infused unexpected joy into everyday life, giving recipients a good reason to treat themselves.

Li Yingxuan, a resident of Zhengzhou, capital of Central China's Henan province, once received a 50 yuan voucher. With no particular plan, the voucher eventually led his family to a hotpot meal.

"I like snagging vouchers, as they can bring little delightful twists to our daily routine," he said.

"Consumption vouchers, often distributed with 'time-limited discounts', provide an immediate and measurable boost to spending — resulting in a significant multiplier effect," said Wang Qing, chief macro analyst at Golden Credit Rating.

Data from Guangzhou's municipal commerce bureau show that the city's dining vouchers have been collected by over 6 million residents since their launch late last year. As of Aug 11 this year, this initiative had stimulated 409 million yuan in actual spending.

In the first half, Shanghai's sports voucher program drove direct spending of 91.04 million yuan at participating venues, achieving a 3.1-fold leverage ratio and a notable increase compared with the same period last year.

During the 14th Five-Year Plan period (2021-25), China's service consumption has entered a phase of rapid growth. The average annual growth rate of household service consumption expenditure stood at 9.6 percent for the period from 2020 to 2024.

International experience indicates that when per capita GDP reaches around $15,000 — consumption patterns shift more rapidly from goods to services, said Dong Chao, an expert with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

Dong noted that China's per capita GDP has already exceeded $13,000, and this means that service consumption is now the primary driver of household spending growth.

Currently, the intensified distribution of service-sector vouchers in some regions is serving as an effective policy tool to spur spending, complementing the ongoing consumer goods "trade-in" program, said Wang with Golden Credit Rating.

At a high-level government meeting held in August, Chinese authorities emphasized the need to further unleash consumption potential — with a key focus on accelerating the development of services consumption and new forms of consumption.

Looking ahead, efforts will be made to further implement targeted initiatives to boost consumption, cultivate new growth drivers in services, improve the consumption environment and promote the stable development of the consumer market, said Fu Linghui, spokesperson of the National Bureau of Statistics, at a news conference earlier this month.

Xinhua