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Rural Consumers Need More Power, Water, TV Antennas
According to a survey conducted by the National Bureau of Statistics, by slashing electricity prices and installing satellite dishes and tap water facilities in rural areas, China will be able to make every 100 farmer households buy 10.5 more color TV sets and 22.6 more washing machines than at present.
Outdated power grids, higher electricity prices, poor TV signals and a lack of tap water are preventing the increase of demand for durable consumption goods in rural areas.
In 1999, every 100 farmer households had less than 40 color TV sets and 24 washing machines, comparing with 105 color TV sets and 77 washing machines for every 100 households in cities.
The low income of farmers is not the only factor restricting consumption demand in the rural market.
For example, in 1999, rural households in Guangdong province in south China earned 71 percent more than households in cities did in 1991. However, rural households owned far less color TV sets and washing machines than urban households eight years ago.
The availability of tap water, stable power supplies and TV antennas have a very positive influence on farmers buying washing machines, color TV and refrigerators.
Installing tap water facilities and satellite dishes in villages will increase farmers' purchase of TV sets and washing machines by 22.6 million and 10.3 million respectively, according to the National Bureau of Statistics (NBC).
By starting a tap water project in rural areas, China may not only fully utilize the idle production capacity of washing machines, but also start another round of investment in new factories.
At present, electricity prices in rural areas are 45 percent higher than in cities.
NBS predicts that if electricity prices are slashed by ten percent, farmers will buy 3.42 million more TV sets, accounting for ten percent of the total sold in 1999.
At the same time, farmers will buy 5.65 million more washing machines, accounting for 50 percent of the total sold last year.
The on-going upgrading of rural power grids may hopefully lower electricity prices by 20 percent. This price drop will generate enough demand to greatly reduce stock piles of TV and washing machines in China.
In addition, the Chinese government's effort to install satellite dishes in villages and sort out charges and taxes in rural areas will help create favorable conditions for invigorating the consumer market in rural areas.
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