Source: CCTV.com

12-10-2008 11:07

Rural consumption has always played a key role in boosting domestic consumption, especially amid the global financial crisis. Now more provinces and cities across China are benefiting from a pilot program that offers subsidies to farmers buying home appliances. If everything goes smoothly, the program will further expand in February of next year.

Under the subsidy scheme, the central government gives farmers a 13 percent subsidy on purchases of certain home appliances.

Under the subsidy scheme, the central government gives farmers a 13 percent subsidy on purchases of certain home appliances. These include washing machines, color TVs, refrigerators and even mobile phones.

Authorities have also lowered their requirements for manufacturers who provide appliances for the subsidy program.

In a small town in Shandong Province, the project is increasing farmers' interest in buying home appliances.

Meng Qingdong, one Shandong farmer said "It's much cheaper now to buy this color TV under the subsidy plan. After the purchase, I only need to apply to local financial authorities with a receipt and my ID card, then within a couple of weeks, the government will give me the funds. "

As each home appliance in the program has a sort of ID card, farmers can get useful information through a special system.

Zheng Shuwei, Director of Comprehensive Department of Ministry of Commerce said "By using this system, you can find out information on home appliances' production and sales,and you can also find out if there is a subsidy for a particular item. Farmers can also learn how much the subsidy is and when it be will be offered. This transparent operational method can effectively prevent mistakes and corruption."

Over the past year, the government subsidy has generated 1.6 billion yuan in consumption of home appliances. The scheme has also led to an increase in the sales volume of home appliance makers in Shandong, Henan and Sichuan provinces, the first group of pilot provinces by an average 40 percent. So far, home appliance giants Hisens and Haier have set up over 40-thousand outlets in rural areas, double the number of 2007.

Guo Qingcun, Vice President of Hisens said "We are planning to invest 100 million yuan to establish an after-sales service network in rural areas. And we aim to employ 40-thousand people to join the service from those areas."

Experts say the project is also a big help for the household electronic appliance industry hit by the global financial crisis. And it will help top potentially enormous demand across China's vast rural regions.

Sui Yinghui, Director of Economics Institute of CASS Qingdao said "It's estimated that if the central government invests one yuan, this will directly stimulate farmers to spend eight yuan. It means in the next four years, the project will generate up to 900 billion in rural consumption."

The project will be further expanded in February next year, when it will cover all rural areas. And it will stay in place until January 2013.

Farmers hope that local financial and commerce authorities can further simplify subsidy procedures.

Editor:Xiong Qu