China's stimulus program for home appliance purchases in rural areas expires Thursday, with experts saying the program should not continue as it does not mesh with the country's plans to encourage industry upgrading and technological innovation.
The program, which was initiated in December 2007, offers rural consumers subsidies equal to 13 percent of the purchase price of home appliances. It has been part of the government's efforts to stimulate domestic consumption amid the global economic downturn.
Under the subsidy program, home appliance sales in the country's rural areas amounted to 298 million units and 720.4 billion yuan ($115.7 billion) from 2007 to the end of 2012, according to the latest data from the Ministry of Commerce.
"The program has not only helped domestic home appliance manufacturers survive amid the weakening export market, but also boosted rural consumption of home appliances," said Zuo Yanque, brand director of market research firm China Market Monitor Co.
Before the program, in 2007, every 100 rural households owned 26 refrigerators, but the number rose to 61 units by 2011, he said, citing data from the National Bureau of Statistics.
But experts said the effect of the rural subsidy program has weakened over the past year due to saturation in rural markets, and some companies said the expiration of the program will not affect their business.
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