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18 July 2024

China says no to voucher plan

By Reuters

China has no plan to issue national vouchers as part of its economic stimulus plan, but Vice-Finance Minister Liao Xiaojun encouraged local governments to use them to help spur consumption, the Beijing News said yesterday.

With China's export markets withering and economic growth slowing rapidly from 13 per cent in 2007 to last year's seven-year low of nine per cent, Beijing has launched a four trillion yuan (Dh2.1trn) stimulus package to reverse the slowdown.

But the latest comments, on the sidelines of the national legislative meeting in Beijing, highlight the limits to the role of the central government, which aims to spend only 30 per cent of the package by itself, expecting to catalyse the rest from local governments, and state-owned banks and firms.

"China will not issue a national consumption voucher," Liao told the paper, but he added that Beijing had no objections to local governments issuing vouchers to spur spending on tourism or shopping.

"Local governments may do so according to suitable local conditions."

So far, regional governments in Hangzhou, Hunan, Sichuan and Shandong are among those that have issued vouchers to encourage spending.

In separate remarks, Liao dismissed recent talk of any further cuts in the stamp tax the government levies on share trading, saying "there is no room for further cutting". On Thursday, the head of the securities watchdog, Shang Fulin, left open the possibility of a cut from the low rate of 0.1 per cent.

"I have not heard of any further stamp duty cut, but I do believe there is room for a further stamp duty cut," Shang had told reporters.

Responding to calls for a rise in the threshold at which income taxes are levied, Liao said it would be difficult to do so now, saying conditions were not ripe.