Vouchers might crowd out cash

Recently people applauded the consumption vouchers issued by a few local authorities, and more are to follow suit. We must be cautious, however, on the real effects of consumption vouchers, warned an article on the website finance.ifeng.com. The following is an excerpt:

The consumption vouchers issued by Chengdu last December and by Hangzhou before the lunar new year have almost all transformed into real consumption. It is still too early to conclude, however, that the vouchers boosted consumption. The vouchers might have just crowded out the consumption with cash.

Without fully fledged social welfare, Chinese people usually incline to save for a rainy day. This propensity cannot be dramatically changed by consumption vouchers. Thus more specific surveys and research is needed to reveal the real effects of the vouchers.