Subsidies for home appliance purchases by Chinese rural residents will be extended from 14 pilot provinces and cities to the whole nation starting from February 1, 2009, the Ministry of Commerce said on January 15. Subsidized products will also be increased from four to six categories.
The project, called "home appliances to the countryside", began in December 2007 and is scheduled to last for four years. Rural residents will get a subsidy of 13% of the product's sale price --- approximating the export tax rebate rate of home appliances --- for their consumption of color TV sets, refrigerators (including deep freezers), cell phones and washing machines which are priced no more than 2,000 yuan, 2,500 yuan, 1,000 yuan and 2,000 yuan respectively.
Yao Jian, spokesman for the Ministry of Commerce, said at a press conference on Jan. 15 that bids for those products have already been initiated. The four newly-added product categories are motorcycles, computers, water heaters and air conditioners. Each region is allowed to choose two out of the four. About 20 provinces and cities have chosen motorbikes.
Products and suppliers will be chosen through a strict procedure, he said. For example, the design of washing machines must address the problem of mice in rural areas. As farmers are very cost conscientious, the energy consumption of many products in the program are 20% to 30% lower than those of regular models.
Yao said that the program will not only stimulate consumption but also improve the living conditions of rural residents. In three provinces and one city, the first places implementing the program, sales of these products are much higher than the national average by around 30 percentage points.
This program will also help to ease the pressure of the rapid increase in China's trade surplus and trade frictions. China is the world's largest producer and exporter of household appliances. In recent years, Made in China appliances have faced restrictions in European and US markets, leading to frequent trade frictions.
By People's Daily Online