Wealth gap-narrowing programs power up China's rural market

13:43, April 14, 2011      

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Li Minjia, a 52-year-old farmer in south China's Guangxi Zhuang Autonomous Region, bought his first air-conditioner last week after buying his first washing machine six months ago.

As recently as five years ago, either of the appliances was a symbol of status and wealth in Li's village in Tiandong County, listed by the central government as one of China's 592 poorest counties in 1994.

Li is one of China's 700-million rural dwellers who, benefiting from government efforts to narrow the wealth gap between the rural and urban people, are showing more willingness to spend.

All listed major home appliance makers in China which have filed their 2010 annual reports to the Shanghai Stock Exchange, posted strong profit and revenue growth last year.

Haier, China's largest home appliance maker, and another two leading home appliance makers Midea and Gree, all posted at least 42 percent increases in net profit and business revenue for 2010, all attributing the strong performance mainly to the quickly expanding rural market.

In March, sales of home appliances in the countryside surged 178 percent year on year with sales of air-conditioners soaring 398 percent to 3.68 billion yuan (5.63 million U.S. dollars), the Ministry of Commerce said last week.

"The booming sales were in part boosted by government subsidies for rural buyers of home appliances, but the fundamental reason is that the farmers have more to spend," said Wang Peng, a researcher with the China Center for International Economic Exchanges, a government think tank.


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Source: Xinhua
 
 
     
 
 
 
     
 
 
 
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