Post-pandemic recovery: How Can Asian Economies Boost consumption?
The COVID-19 pandemic, which began in early 2020, has hit Asian economies hard. Consumption is an important source of growth and, for some Asian economies, a major source of income. Moving into the "post-pandemic era", governments in Asia, such as Thailand, Taiwan, China and Hong Kong, have introduced various policies to stimulate consumption, hoping to kick-start their battered economies. But the food and energy crisis caused by the Russia-Ukraine war, interest rate hikes in the United States, inflation and other factors have led to more problems. The road back to spending remains challenging for both big companies and the private sector.
Wong Chung-keung, associate professor of marketing at the University of Hong Kong, told BBC Chinese that stagnant consumption during the pandemic prevented business expansion and even caused them to scale back their operations, leading to layoffs and fewer job openings: "Therefore, the impact on the Labour market reduces the willingness of the public to consume, creating a vicious circle." Professor Wong agrees that this vicious circle has been suffering all over the world in the past few years, and he has more first-hand experience in Hong Kong and Mainland China. How to get out of this vicious circle will test every government.
BBC Chinese collates and analyses how Asia's biggest economies are reinvigorating their economies in the post-pandemic era by boosting consumption and the challenges they face.
Taiwan: From vouchers to cash, workers look forward to a fresh start
According to the cabinet's latest economic forecast, released in January, Taiwan's economy grew by -0.86 percent in the fourth quarter of 2022, ending 26 consecutive quarters of positive growth. The economic growth rate for the whole of 2022 will be 2.43 percent, the lowest since 2017.
In terms of consumption, however, the consumer economy returned in the fourth quarter of last year as quarantine controls were relaxed in Taiwan, according to the analysis. Private consumption continued to expand, with private consumption growing 2.89 percent in the fourth quarter of last year, contributing 1.29 percentage points to economic growth.
Faced with the impact of the epidemic, the Taiwan government began to distribute various consumption rolls as a means to boost consumption, and the amount of "candy pie" increased year by year.
In 2020, the Su Cabinet introduced a NT $3,000 (about US $100) "revitalization voucher" per person and a "National Travel voucher" to stimulate domestic spending and tourism in Taiwan. Many Taiwanese, who cannot travel abroad, have jokingly diverted money from their trips abroad to spend inside Taiwan as a form of "revenge spending". After the implementation of this move, the relevant practitioners in Taiwan responded well.
In 2021, Taiwan Pie Candy will be given free NT $5,000 (about 165 US dollars) worth of "Five times revitalizing rolls" as a strategy to stimulate domestic consumption. In 2023, Taiwan's government set aside some money to distribute T $6,000 (US $198) of pure cash to every Taiwanese citizen in the name of "sharing the fruits of the economy". The budget bill passed the legislature this week.
Small businesspeople in Taiwan are feeling a lot about the ups and downs of the consumer economy in response to the pandemic.
During the Lunar New Year in southern Taiwan in recent years, this reporter heard such a conversation: "I have been here for more than 20 years and never left...... I survived three years of the epidemic!" This is what a seller of creative T-shirts tells a customer at the Liuhe Night Market, a popular tourist area in Kaohsiung, Taiwan. The boss's voice was full of "come back" self-assurance.
She told her customers to be grateful she survived the pandemic. Her small business of hand-designing clothes featuring Taiwan's tourist attractions, national flags or humorous phrases has relied on overseas visitors. But in the impact of the epidemic, Taiwan banned foreign tourists for a long time, her small business faced a serious crisis.