China Faces Controversy Over Paying Some Local Officials' Salaries and Bonuses with Consumption Coupons

[Asia Economy Beijing=Special Correspondent Park Sun-mi] Some local governments in China are causing controversy by paying teachers' and public officials' salaries and bonuses in consumption coupons to revive regional economies hit by the novel coronavirus infection (COVID-19).

According to China Xin Jing Bao on the 10th, Huaihua City in Hunan Province deducted part of the salaries and bonuses of teachers and public officials and paid them in consumption coupons. For a bonus of 2,600 yuan, 2,000 yuan was deducted, and for 2,350 yuan, 1,500 yuan was deducted, and for 2,140 yuan, 1,000 yuan was deducted, among other methods.

A financial bureau official in Huaihua City said, "Teachers and public officials are the targets," and "Consumption coupons can be used by individuals, but must be used only for consumption purposes."

The coupon usage period is until the 5th of next month, and they can be used at restaurants, supermarkets, gas stations, etc., but cannot be used to pay water, electricity, or gas bills, limiting their use to consumption only.

During the 2009 global financial crisis, China also promoted consumption coupons, but explicitly prohibits replacing salaries or bonuses with consumption coupons. There is also a principle that coupon issuance should not violate the voluntary consumption principle of residents. However, as the regional economy was severely hit by COVID-19, some local governments are disregarding these principles and pushing consumption even forcibly.

As the controversy grew, the Huaihua City government in Hunan Province changed the deduction from mandatory to voluntary. However, it is reported that although it appears voluntary, most people are following the government's measures almost compulsorily due to the atmosphere.

Other cities in Hunan Province, such as Changsha and Xiangtan, are also known to have introduced similar policies. A teacher in Xiangtan said that 1,000 yuan of their bonus was deducted and replaced with consumption coupons.

The Chinese government is actively encouraging the issuance of consumption coupons to revitalize consumption hit by COVID-19. According to the Ministry of Commerce, currently, governments of about 7 provinces and 20 cities are issuing and applying various forms of consumption coupons. For example, the consumption coupons issued by Hangzhou City have generated a consumption effect of 220 million yuan.

Chinese media praise the consumption coupon systems introduced by local governments, saying they activate consumption hit by COVID-19 and lead to stimulating corporate production and promoting employment.

This content was produced with the assistance of AI translation services.