Hefei to expand consumption subsidies

Hefei, Anhui province, plans to distribute more coupons starting on Tuesday to boost consumption, adding to previous subsidies.

The city will budged for coupons worth 100 million yuan ($14 million) and require each of its four urban districts, four rural counties and one county-level city to sweeten the pot with at least 10 million yuan more, according to a new release from the municipal government on Monday.

The coupons, which will be distributed through China's leading digital payment platform, Alipay, will go to the restaurant, retail, home appliance and automobile sectors.

Every consumer is eligible for one coupon in the four sectors and six of nominal value, which will depend on luck.

Here's how it works:

Spending of 40, 100 and 300 yuan on restaurants will be subsidized by coupons 10, 20 and 50 yuan, respectively.

A person who spends 100 yuan or more on retail and 1,000 yuan or more on home appliances can get coupons worth 50 yuan and 100 yuan, respectively.

The purchase of a passenger car with an engine displacement of 1.6 liters or less will be subsidized 1,000 yuan.

Hefei's new subsidies follow a successful trial in the city's downtown Luyang district, which spent 3 million yuan on coupons.

Luyang authorities said the district is ready to provide another 10 million yuan to patrons of local businesses. It has also given 8,888 yuan worth of coupons to each of 10 local residents via a lottery.

All the subsidies have been paid back by motivated consumers' generous spending, according to an evaluation document from the district.