China To Give Free Digital Yuan To Help the Country’s Economy

China To Give Free Digital Yuan To Help the Country’s Economy

May 30, 2022 Off By Roland G

Some areas in China announced the distribution of free digital yuan “red packets” to encourage local spending in the face of China’s economic recession, which has been exacerbated by mass COVID lockdowns.

Shenzhen said it would distribute 30 million digital yuan worth around $4.5 million using a lottery system in which citizens can win 88, 100, or 128 yuan in red packets.

For instance, “red packets” are monetary gifts in red envelopes given on special occasions in countries like China. However, they are issued as digital coupons for China’s central bank digital currency (CBDC), also known as the e-CNY.

Furthermore, Guangzhou’s Nansha District announced last Wednesday that it will also give 10 million digital yuan red packets to support the catering and retail industries.

According to local media, Xiong’an New Area, a special economic zone southwest of Beijing, began distributing red packets on Monday as part of a 50 million yuan strategy to increase consumption.

Note that the Caixin Purchasing Managers’ Index (Caixin PMI) fell to 36.2 in April because of mass lockdowns in reaction to the COVID outbreak, the lowest reading in more than two years for China’s service sector.

In a nationwide video conference last Thursday, Chinese Premier Li Keqiang urged provincial, municipal, and rural authorities to speed up infrastructure projects, boost jobs, and restore growth.