Costlier goods qualify for subsidy

PUBLISHED : Thursday, 18 March, 2010, 12:00am
UPDATED : Thursday, 18 March, 2010, 12:00am

The mainland has substantially raised the upper price limit for subsidised home appliances in rural areas in an effort to offer more high-end options to well-off farmers.

The Ministry of Commerce issued a notice yesterday calling for an increase in the price caps and the types of products eligible under the nation's 'home appliances down to rural areas' scheme.

The government launched the consumption-stimulus programme in 2008. It offers subsidies for purchases of home appliances in rural areas.

Jiang Feng, the chairwoman of the Household Electrical Appliances Association, who is involved in the scheme, said the higher price limits had already been put into place in the bidding invitation process this January.

According to the new pricing policy, the upper price limit for a subsidised television set has doubled to 7,000 yuan (HK$7,959) from the previous 3,500 yuan. The limit for refrigerators has been raised to 4,000 yuan from 2,500 yuan, while that for washing machines has risen to 3,500 yuan from 2,000 yuan.

Similar increases also apply to mobile phones, computers, air conditioners, water heaters, microwave ovens and other appliances.

In addition, each province is also allowed to add one more type of home appliance, such as electric cookers or electric bicycles, to the list of eligible products that enjoy subsidies.

'The main purpose of the measures is to give farmers more high-end options in choosing home appliances,' Jiang said.

For example, the previous cap of 3,500 yuan for a TV set was barely enough for a 32-inch LCD model, while the 2,000-yuan price limit for washing machines also prevented a relatively expensive front-end loaded washing machine from attracting subsidies.

'There are some well-off families in rural areas, especially in coastal towns and villages, who can afford more expensive goods,' she said.

Jiang said the subsidies from the government would remain unchanged despite the higher price caps.

Premier Wen Jiabao said this month improvements would be made to the subsidised home appliances scheme this year to further boost consumption in rural areas.

Statistics from the Ministry of Commerce show that more than 37 million home appliances, with a sales value totalling 69.2 billion yuan, had been sold under the scheme by the end of last year.