In recent years, China has been making significant efforts to boost its economy by increasing its support for the catering sector. The catering industry is an important part of the Chinese economy, with a significant contribution to the country’s GDP. In 2020, the sector was hit hard by the COVID-19 pandemic, leading to a decline in consumption and a reduction in employment. To help revitalize the industry, the Chinese government has pledged support for consumption in the catering sector. This article will provide a detailed overview of the recent measures taken by the Chinese government to support the catering industry.

Background on the Catering Industry in China

The catering industry in China is a significant sector of the economy, contributing to the country’s GDP and providing employment to millions of people. In 2019, the sector had a market value of around 4.5 trillion yuan ($692 billion) and employed over 30 million people. The industry is expected to continue growing in the coming years, with an estimated market value of 6.9 trillion yuan ($1.06 trillion) by 2025. Read more about the Catering Industry in China

The industry is diverse, ranging from small street vendors to high-end restaurants. According to a report by the China Cuisine Association, the industry can be divided into three categories: high-end, mid-range, and low-end. The high-end catering sector includes restaurants with a per capita consumption of over 300 yuan ($46), the mid-range sector includes restaurants with a per capita consumption of between 100 and 300 yuan ($15-$46), and the low-end sector includes restaurants with a per capita consumption of less than 100 yuan ($15).

COVID-19 Impact on the Catering Industry in China

The COVID-19 pandemic has had a significant impact on the catering industry in China. As the virus spread across the country in early 2020, the government imposed strict lockdown measures, leading to a decline in consumption in the catering sector. Many restaurants and food stalls were forced to close, leading to a reduction in employment and a decline in revenue for the sector.

According to a report by the China Cuisine Association, the catering industry suffered a loss of around 500 billion yuan ($77 billion) in the first half of 2020. In addition, the report stated that over 1.4 million catering enterprises were affected by the pandemic, with more than 10 million employees losing their jobs.

Chinese Government Measures to Support the Catering Industry

To help revitalize the catering industry, the Chinese government has introduced several measures to support consumption in the sector. The measures aim to boost consumer confidence, encourage spending, and help businesses recover from the impact of the pandemic.

Vouchers for Consumption

One of the measures introduced by the Chinese government is the issuance of consumption vouchers. The vouchers can be used at participating restaurants and food stalls, providing a discount on meals for consumers. The aim of the vouchers is to encourage consumers to spend money in the catering sector, helping to boost revenue for businesses.

In 2020, the Chinese government issued consumption vouchers in several provinces and cities, including Beijing, Shanghai, and Guangzhou. The vouchers were also issued in the Hainan Free Trade Port, a special economic zone in southern China. The vouchers were well received by consumers, with many restaurants reporting an increase in customers.

Subsidies for Catering Enterprises

The Chinese government has also introduced subsidies for catering enterprises. The subsidies aim to support businesses that have been affected by the pandemic, providing financial assistance to help cover costs such as rent and salaries.

In 2020, the Chinese government announced a subsidy program for the catering industry, providing financial assistance to small and medium-sized enterprises. The program offered a maximum subsidy of 500,000 yuan ($77,000) for eligible businesses. In addition, the government also provided subsidies for businesses that have been forced to close due to the pandemic, helping them to cover their fixed costs such as rent and utilities.

Tax Reductions and Exemptions

To further support the catering industry, the Chinese government has introduced tax reductions and exemptions. The measures aim to reduce the financial burden on businesses, helping them to recover from the impact of the pandemic.

In 2020, the Chinese government announced a series of tax reductions and exemptions for the catering industry. The measures included a reduction in value-added tax (VAT) for catering services, from 13% to 9%. In addition, the government also waived social security contributions for small and medium-sized catering enterprises.

Investment in Digital Infrastructure

The COVID-19 pandemic has accelerated the shift towards digitalization in many industries, including the catering sector. To support this trend, the Chinese government has pledged to invest in digital infrastructure for the catering industry.

In 2020, the Ministry of Commerce announced plans to invest in the development of a digital platform for the catering industry. The platform aims to provide a one-stop-shop for catering services, including online ordering, delivery, and payment services. The government hopes that the platform will help to boost the efficiency and competitiveness of the catering industry, as well as providing a convenient service for consumers.

Expansion of Domestic Consumption

The Chinese government has also introduced measures to promote domestic consumption, including in the catering sector. The measures aim to boost consumer confidence and encourage spending, helping to drive economic growth.

In 2020, the Chinese government announced a series of measures to promote domestic consumption, including the expansion of the China International Consumer Products Expo @CGTNOfficial. The Expo aims to promote domestic consumption of consumer products, including food and beverage products. The government also encouraged local authorities to promote the development of night-time economy, including the catering industry.

Conclusion

The catering industry in China is an important part of the country’s economy, contributing to GDP and providing employment to millions of people. The COVID-19 pandemic has had a significant impact on the sector, leading to a decline in consumption and a reduction in employment. To help revitalize the industry, the Chinese government has introduced several measures to support consumption in the catering sector. The measures aim to boost consumer confidence, encourage spending, and help businesses recover from the impact of the pandemic. These measures include vouchers for consumption, subsidies for catering enterprises, tax reductions and exemptions, investment in digital infrastructure, and the expansion of domestic consumption. These measures are expected to help the catering industry to recover from the impact of the pandemic and drive economic growth in the coming years.