White goods sales pass 77m in subsidised scheme for farmers
Mainland farmers bought more than 77 million television sets, washing machines, refrigerators and air conditioners last year through the country's 'home appliances to the countryside' scheme.
Despite the stimulus policy, the home appliance industry expects a slowdown in sales growth this year because of higher costs, a stronger yuan and policy adjustments.
According to the Ministry of Commerce, sales proceeds from the subsidised scheme in rural areas reached 173.2 billion yuan (HK$203.2 billion) last year, about 1.7 times that of 2009. Refrigerators and television sets were the most popular products, reaping 56.7 billion yuan and 48.8 billion yuan, respectively.
Beijing launched the 'home appliances to the countryside' programme in December 2007 to fight the global economic crisis and boost domestic demand in rural areas. Farmers buying certain types of electrical appliances receive a subsidy of 13 per cent of the full price.
The programme was expanded nationwide in 2009 with more products, including motorcycles, computers and water heaters.
'The programme was a turning point for the rural market,' said Jiang Feng, the president of the China Household Electrical Appliances Association.
Prior to the launch of the programme, almost 80 per cent of the appliances made in the country were sold to urban areas or exported.
But by the end of October last year, sales of fridges and washing machines in the countryside amounted to one-third and one-fourth of the total market respectively, according to the statistics of the Ministry of Commerce.
Henan, the most populous province in the country, led sales under the programme, followed by Shandong, Anhui, Hebei and Jiangsu.
Jiang estimated that the home appliance industry would have had double-digit growth last year.
However, she warned that the strong momentum of the industry might weaken this year.
Jiang said the government had said it would suspend subsidies for purchases of energy-saving appliances at the end of May.
In addition, another spending-stimulus policy - exchanging old appliances for new - is expected to end next year.
Challenges are also expected from a rising yuan and higher metal prices. Also, the central government's tightening measures on the property market have increased uncertainties for the industry.
'We think the whole market will continue the upward trend in 2011,' Jiang said.
'Yet it's not very likely to have the fast growth rate you saw last year.'
Rural revolution
The subsidies have made the countryside's market share grow rapidly
Previously, the amount of appliances made in the country that were sold to urban areas or exported was nearly: 80%
But that percentage has dropped. By the end of October last year, the sales of refrigerators in the countryside accounted for a market share of: 33%
