HANGZHOU, CHINA — With layoffs spreading and the traditional annual bonus cut or eliminated this year, many Chinese were in no mood to splurge during this week's Lunar New Year holiday -- even in a well-off city like this one.
So just before the Chinese calendar turned to the Year of the Ox, the local government issued millions of dollars' worth of store coupons to encourage its penny-pinching residents to go out and spend.
Si Gendi, 55, wasted no time in redeeming some of her vouchers. She and hundreds of thousands of other elderly, jobless workers and students got a booklet of $30 each, for use at some 240 local supermarkets and general merchandise stores.
"The last time I got something like this was when I was young," she said.
That was back in the 1970s, and those coupons were issued to ration products that included soap and sewing machines.
"Before it was to restrict consumption so you don't waste," Si said, coming out of a Carrefour supermarket with a bag of dumplings. "This time the government wants us to spend more."
Hangzhou, about 120 miles southwest of Shanghai, isn't alone in doling out so-called consumption coupons to its lower-income citizens.
Other cities, including Nanjing and Chengdu, are distributing "tourism coupons" to spur spending at restaurants and shops. And throughout rural China, local governments are using money from Beijing to give rebates on purchases of televisions, refrigerators, washing machines and cellphones.
Such programs are all part of a broader effort to help the needy and boost domestic demand in the face of a global financial crisis that has sapped China's exports and investments and triggered waves of layoffs throughout the economy, from the factories in the south to the high-rise office buildings in the north.
Chinese consumers were already feeling the pinch from the nation's languishing stock and real estate markets.
Car sales in China, which in recent years had surged 20% or more annually, sank 10% in December from a year earlier, according to J.D. Power & Associates. Major chain stores in China have seen a sharp slowdown in sales, analysts say, and expectations for the near future are grim, from both retailers and consumers.
"People have this psychology of crisis," said Victor Yuan, chairman of Beijing-based consultant Horizon Research Consultancy Group, which does polling for the private sector and the government.
