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Slowdown in growth for home appliances

By Fang Yunyu (Global Times)

08:10, June 11, 2012

Figures released yesterday show that China's home appliance sales growth nearly came to a halt in May, stoking concerns about an economic downturn, although some experts said that the government's new incentive policies will boost sales significantly.

The country's home appliance sales totaled 49.9 billion yuan ($7.83 billion) last month, an increase of 0.5 percent from a year earlier, and a sharp drop from April's 7.7 percent annual growth rate, according to statistics released by the National Bureau of Statistics Saturday (NBS) yesterday.

"The two main reasons for the dismal sales growth are weak overseas sales owing to economic uncertainty, and the domestic off-season in the home appliance industry," Luo Qingqi, director of Pa Le Consulting Corp, told the Global Times yesterday.

Some analysts said the ongoing curbs on the real estate market and the economic slowdown are also factors behind the weak sales.

Sales of residential housing units reached a total of 1.24 trillion yuan for the first four months, down by 11.8 percent year-on-year, according to the NBS.

On May 23, the World Bank cut its 2012 economic growth forecast for the country to 8.2 percent from the previous prediction of 8.4 percent it made in January, suggesting measures may need to be taken to stabilize growth for the world's second largest economy.

Total sales of home appliances stood at 263.1 billion yuan in the first quarter, a drop of 10.1 percent year-on-year, according to figures released by the Beijing-based consulting firm China Market Monitor Co.

Liu Buchen, a home appliance expert at Zhengzhou-based Jiachunqiu Media, said that the government's massive subsidy programs and the upcoming busy season in summer for the industry will help boost growth in the sector.

The Ministry of Finance released a series of detailed new programs on one-year subsidies for energy-saving home appliances, ranging from highly energy-efficient washing machines to flat-screen television sets, effective from June 1. They were aimed at increasing domestic consumption and bolstering the slowing economy.

Insiders predicted that the subsidies would encourage sales in the sector.

Gome Electrical Appliances Holding last week estimated that 20 to 25 percent of its annual sales in 2012 would be a result of the subsidy programs.

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