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Home Appliances a Tough Sell in the Countryside.doc
Home Appliances a Tough Sell in the Countryside
Abrand-new color TV set stands in Shi Yunguo’s house. “The set cost me RMB 1,350, and the government gave me an RMB 175 subsidy,” said Shi Yunguo, a farmer in Linyi, Shandong Province. Beginning in February 2009, Chinese farmers qualify for a 13 percent government subsidy on TV, mobile phone, refrigerator and washing machine purchases.
The “Home Electrical Appliances to Rural Areas” policy runs for four years, during which 480 million household electrical appliances are expected to sell in the countryside, generating consumption worth RMB 920 billion. “The government wants to stimulate consumption in rural areas and simultaneously clear surplus home electrical appliances,” said Zeng Xiao’an, vice director of the Ministry of Finance’s Department of Economic Development.
Home Electrical
Appliances Affordable
to Farmers
The “Home Electrical Appliances to Rural Areas” scheme has been operating on an experimental basis for one year. Subsidies have been allocated to farmers in the provinces of Shandong, Henan and Sichuan since December 2007, and 3.5 million home appliance sales have been made in these provinces since the end of October 2008, according to Ministry of Finance statistics.
Shi Yunguo was just one of the farmers who bought their TV sets under the scheme.
The Chinese government has invited tenders for the contract to produce the appliances in accordance with related regulations. No single item is to exceed RMB 2,500 in price.
China is now the world’s largest home electrical appliance producer. The export volume of color TVs, refrigerators, washing machines and mobile phones in 2007 reached US $57.9 billion, and constitutes a main source of China’s large trade surplus.
Export growth has made great contributions to China’s economic development in the past decades, but is dwindling under the current economic crisis. Popularizing home electrical appliances in rural areas, howe
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