The Civil Affairs Bureau of Chengdu Municipal government decided yesterday to give out free vouchers valued at 38 million yuan to particular groups of people living both in the city and in rural areas. 

Deputy Director of the Bureau Chen Xiangjun announced the decision at yesterday’s press conference held by the municipal government, saying this is the first time a city government is going to subsidize groups of needy people by giving them free vouchers. He said every eligible person could get free 100 yuan vouchers, which can be used in several designated supermarkets and chain stores. Vouchers will be handed out before Dec. 29 and will be valid until Jan. 31 next year.  

Chen said three groups of people would be eligible for the vouchers. These include city residents entitled to basic living allowances, rural residents entitled to ‘Five-Guarantees’ standards (food, clothes, housing, medical and burial services) and other special-needs groups.  

Another Deputy Director of the bureau, Wang Bing said his bureau is the first of many other departments - health, education, culture and tourism - to take a series of steps to provide assistance. Free vouchers is the first of a series of moves to boost market growth.  

Wang said they will not consider handing out cash to avoid the risk of corruption. He said the aims of the move are to make sure the eligible groups have a happy and harmonious New Year, and to boost domestic demand in the city.

Because the decision was announced only yesterday, the bureau said they will start the government procurement procedure as soon as possible. The city government has already called meetings with representatives from different supermarkets and shops. The bureau said they will try to achieve a balance and make sure to select stores which are convenient for both city and rural residents.  

“It’s a win-win result if we are successful in being chosen as a government procurement supermarket,” He Jie, deputy manager of a local supermarket, told Chengdu Commercial News. “We will try our best to make the 100 yuan free voucher worth more,” he added. “For basic living necessities like rice, flour and edible oil, we will try to negotiate further discounts with our own suppliers”. 

Economist and counselor to the Chengdu Municipal Government Wang Jin told the Chengdu Commercial News: “The government will distribute free 100-yuan vouchers instead of giving 50 yuan in cash, as was the previous practice. This is a good measure to combine the ideas of helping poor people and driving consumption. 100 yuan is not a big sum, but it is a good beginning.”

Wang said that this move alone is not sufficient to drive the whole local demand market. To better boost consumption, the government should try to find solutions for employment. Luckily, the municipal government is working hard to help medium and small businesses, which are major job providers, to get through the financial crisis. 

(China.org.cn by Zhang Yunxing December 12, 2008)