China Will Give Free Digital Yuan To Help The Country’s Stifled Economy

China will give free digital yuan to help the country’s stifled economy

Shenzhen, Guangzhou, and Xiong’an New Area have declared that they will distribute free digital yuan “red packets” to encourage local spending in the face of China’s economic slowdown, which has been exacerbated by mass Covid lockdowns.

Starting Thursday, Shenzhen will distribute 30 million digital yuan (US$4.5 million) using a lottery system in which citizens may win 88, 100, or 128 yuan red packets.

Red packets are monetary presents in red envelopes given at important occasions in many Asian countries, including China, however they are issued in the form of digital coupons for China’s central bank digital currency (CBDC), also known as the e-CNY.

Last Wednesday, the Nansha District in Guangzhou said that it will distribute 10 million yuan in digital yuan red packets to help the catering and retail businesses, but no date has been set.

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.

The Caixin Purchasing Managers’ Index (Caixin PMI) fell to 36.2 in April as a result of mass lockdowns in reaction to the Covid outbreak, the lowest reading in more than two years for China’s service and industrial sectors.

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

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