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Helping hand must be for those in need

CHINA DAILY No Comments Share:
(Xinhua/Shen Bohan)

As well as a health crisis, the novel coronavirus epidemic has become an existential economic challenge for poorer households and millions of companies, particularly those in tourism, travel, food and beverage, offline retail and entertainment.

The constrained consumption because of the novel coronavirus outbreak means that many small and medium-sized businesses are teetering on the brink of bankruptcy. In a bid to stimulate consumption, and thus provide a lifeline to the many shops and restaurants, many cities across the country are offering vouchers and coupons to local residents.

For example, the local government in Hangzhou, capital of Zhejiang province, has provided 500 million yuan ($70.6 million), of which 15 million yuan has been subsidies for the most needy, while the remaining 485 million yuan has been offered to residents in the form of electronic coupons.

A special form of action taken under special circumstances, such measures are intended to help to cushion the blow on retail and service businesses and ease the burden on affected families.

Previous practice has shown that such coupons are an effective means to stimulate consumer spending. When consumer confidence was hit by the global financial crisis in 2007/2008, many local governments issued consumption coupons to be used by residents as instruments of payment, and these effectively spurred consumption by increasing people’s purchasing power and promoting their desire to spend.

The Chinese authorities released a guideline on March 13 aimed at boosting consumption and unleashing the potential of the domestic market to cushion the blow of the ongoing epidemic on economic activities. An outcome of this, the coupons, by bolstering people’s willingness to buy, in addition to other measures such as tax rebates, fee cuts and preferential loans, provide a buoyancy aid so small and medium enterprisess and hard-hit families can weather the storm.Yet local officials must make sure that the consumption coupons or vouchers they offer are distributed in a fair manner. In Hangzhou, coupons are provided through the online payment platform Alipay, which many elderly people don’t know how to access, which may exclude them from benefiting from the programme. In Nanjing, they are distributed by a lottery. This has sparked criticism of what is a well-intended policy because they do not necessarily help those most in need of assistance.

Likewise, local governments should not issue such coupons simply because they are the easiest way for them to be seen to be doing something. Local officials must see these complaints as a means to improve their governance. Artificial intelligence and big data make it possible to target government policies to those who are most in need of a helping hand.

The public health crisis has been a test of people-oriented governance. But just because the epidemic is being brought under control in China, does not mean that the test has ended. There is still much to be done to safeguard people’s well-being.

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