Abstract:

Faced with COVID-19 pandemic outburst across the entire country, causing tremendous disruption in both citizens’ everyday lives as well as business’s daily economic activities, a large number of regional governments in China decided to employ Consumption Voucher as the fiscal policy tool to contain recession and boost domestic demand. In a virtuous cycle where increased consumption lead to expanded production, stabilized employment, raised citizen income and further enhanced domestic consumption, regional governments expected the Voucher to ultimately bring about healthy rebound from both the supply and demand side.

This paper summarizes multiple aspects of the Voucher design and researches into potential influence factors behind the Voucher release, including (1) The special macroeconomic background before Voucher release, the definition of Voucher and its economic importance. (2) Different regional governments’ Voucher release date, release amount, consumption categories, face value, citizen coverage and term of validity. (3) A new concept “Minimum Leverage” to quantify the Multiplier Effects regional governments expect to achieve through their Voucher programs. (4) Empirical study in how region specific effect could affect Voucher release amount and their Minimum Leverages.

Full Text (PDF):  Brief Analysis of Consumption Voucher Issuing and Influence Factors in China (2020)