OPINION / VIEWPOINT
Should China copy US stimulus plan to hand out cash to everybody?
Published: Jan 30, 2021 08:51 PM

People play on the ice-covered Shichahai lake which has been turned to an ice rink in Beijing, capital of China, Jan. 17, 2021. (Xinhua/Ju Huanzong)


 
A few days ago, I said on social networks that if our country hands out money to everybody, it means it doesn't send out money at all. I oppose such a national stimulus plan during the epidemic. I encountered some objections online. 

But I stick to my opinion. I oppose our country learning from the US and handing out cash to all people. I believe our government won't do that.

The US stimulus plan had something to do with the political climate during the election. Meanwhile, by doing so, the US was asking the world to pay for it, because the dollar is a world currency actually. A few financially rich countries would send out cash to their citizens. They are mainly small economies including northern European countries and those with plenty of petrocurrency. Most countries wouldn't do that.

China's finances are not as enough as to the extent of handing out cash to all its people. Imagine, if the government gives each one 1,000 yuan ($155.6), it is 1.4 trillion yuan which the government cannot bear. If that happens, it will increase the deficit, and it is the people that will have to foot the bill. 

During an epidemic, handing out money serves two purposes - helping the impoverished and stimulating consumption. China has a strong network of social organizations. It should make best use of it and put in the limited money precisely to areas that could serve the two objectives and increase efficiency. Giving each person the same amount of money is a waste of China's social organization network and is simply a lazy policy. 

For instance, if the country wants to alleviate poverty, it shouldn't hand out money to everybody. It is not difficult to figure out where and what places people need help more. If so, the money should be precisely given to them. If the rich and the poor both get 1,000 yuan, I don't think it is fair. 

There are other efficient ways to stimulate consumption, for example, Beijing issued various vouchers last year, which are available to everyone in Beijing. It actually means the government offers you a discount when you make a purchase. These vouchers can be used when dining in restaurants, or buying electronics, which can help save as much as 800 yuan when buying electronics. They can produce immediate and accurate effects on boosting consumption so that the money invested will have a corresponding effect. 

I think it is a much smarter method than handing out cash equally among all residents. This year, different places in China have rolled out different schemes. For example, Yiwu, in East China's Zhejiang Province, gives people who stay locally for Spring Festival consumption vouchers and cancels parking fees for all parking lots during Spring Festival holidays. Hangzhou gives migrant workers who stay in the city for the holidays a cash bonus. These two cities are among China's richest cities, but they don't hand out cash to everybody. This says a lot. 

It's good to have a debate on this issue as long as we have a serious attitude. However, some people probably just want to use the US' plan handing out cash to everybody to prove how the US does a better job than China, who doesn't have a similar plan. But is it fair or not to give homeless people and Bill Gates equally $2,000? Supporters of this like to dodge such a question.

The author is editor-in-chief of the Global Times. opinion@globaltimes.com.cn


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