china farmers to get fridges, tvs to boost consumption - home appliances manufacturers in china

Zhangqiu county, China (Reuters)-
When Yuan Shanchun became the first farmer in China to receive government subsidies to buy refrigerators, he was overwhelmed by inquiries from almost everyone he knew and asked them how they could also buy them.
"Who can believe it?
Why does the government give us money to buy things? Champagne of 51year-
Asked the old man, speak with a strong accent from the eastern province of Shandong.
"It's like free food falling from the sky!
"Yuan is a beneficiary of a pilot program that gives Shandong and two other provinces 13% of government rebates for each rural family to buy up to two televisions, two refrigerators and two mobile phones.
The subsidies are part of a series of Beijing policies aimed at stimulating domestic consumption and improving the living standards of about 0. 74 billion rural residents in China. They account for 56% of the total population, but do not benefit from the rapid growth of the economy as urban residents do.
The concept is very simple: giving farmers the same tax refund for home appliance exporters over the long term, eliminating policy bias towards exports, and helping manufacturers tap into potentially huge consumer groups in rural China.
"It helps absorb excess capacity from producers.
Start rural consumption, "said Du Linjun, director of the Finance and Trade Office of Zhangqiu County.
The local government went out of its way to ensure that local farmers were aware of the opportunity, covered local media with reports and distributed leaflets.
Retailers hang huge red banners in front of their stores, announcing the project called home appliances to the countryside.
While a 13% discount may not sound like it, the hustle and bustle in an electronics store in Zhangqiu shows that saving is really important for farmers.
"Shopping Guide" wearing red clothes"and-
Gold miners explain to a steady stream of customers that if they buy a qualified refrigerator, TV or mobile phone by the end of May, the government will give them a rebate.
They point to a logo that lists the prices and rebates for each model.
In the case of showing how important each penny is to the rural poor, the rebate is calculated as a "point" for each penny ".
This is the seventh in the United States. S. cent.
Sales are hot. By 2 p. m.
On a recent Monday, Google Mart sold 30 refrigerators and TVs.
Since the launch of the plan in January 4, the store has sold an average of 120 rebates-
Qualified items per week.
Xu Guangmei and her husband Xu Chengshe traveled a total of 25 km kilometers (16 miles)
They bought a refrigerator from their Nanhe mountain village to Zhangqiu. The 244. 14 yuan ($34. 15)
The rebates they received, as well as those offered only for a limited period of time, ultimately drove their long term purchasessought-after fridge.
"The money we have saved is enough for us to have a very good Spring Festival," Ms. Xu said in the modest brick living room --
The couple and their 10-year-old son.
It is impossible for Beijing to choose a better time for such an initiative.
With an imminent U. S.
The recession could weaken overseas demand, which has been the fourth largest economy in the world.
The largest economy is growing by more than 10% per year, and more than ever, domestic consumers are stepping up their purchases of more goods produced by factories in the country.
Economists and officials agree almost unanimously to reduce shocks like the United States. S. sub-
In the midst of the economic crisis, China's economy must be more balanced and less dependent on exports and investment.
Household spending accounted for just over 36% of gross domestic product in 2006, down from 45% five years ago.
The comparable share of the US and India is about 72% and 60% respectively.
To reverse this trend, Beijing has introduced some initiatives in the past few years to put more money in the pockets of farmers and reduce their need to save money for emergencies such as illness.
The government canceled the age-
The old agricultural tax, which eliminated the cost of primary education, is establishing a basic medical insurance system for rural areas.
Nevertheless, in order for China to become more consumers, policy makers still face severe challenges.
Arthur Kroeber, managing director of Dragon Economics, a Beijing research firm, said the economy was driven.
"All the government is trying to do is make sure that the family sector keeps up with the pace of economic growth, but it cannot be the driving force for growth," said Ge Yihao . ".
"Investment is the driving force for economic growth.
GE Yihao pointed out that the income in rural areas is very low, which shows that it is difficult for farmers to make a greater contribution to the overall expenditure.
Per capita income in rural areas last year was only 4,140 yuan.
City residents earned more than 13,786 yuan, more than three times the original.
"Basically, the government just wants to make sure that there is a slowdown in the expansion of this gap," he said . ".
This goal has not only economic but also political roots.
With the gap between the rich and the rich in China --
The authorities are concerned about the growing social unrest that has been evident in protests over land rights and local corruption.
Wang Qian, an economist at JPMorgan Chase in Hong Kong, is more optimistic, saying that urban and rural consumers are becoming a force that cannot be ignored.
Wang Jianlin pointed out that the recent sales data of all goods from mobile phone subscriptions to jewelry show that private consumption has increased significantly.
Furniture sales rose by nearly 60% as of November;
Building materials and household appliances increased by about 57% and 28% respectively.
"The media of the authorities --
Wang said in a research report: "long-term strategic policies focus on stimulating domestic demand, especially in the case of growing concerns about the global economy, should provide additional strong support for domestic consumption.
The couple who bought the refrigerator, Xus, personalizes the achievements and limitations of government policy.
While measures such as the elimination of agricultural taxes and recent subsidies have helped, they say inflation in vegetables and meat is increasingly eroding their income from growing wheat and corn and doing odd jobs.
In addition, the poor health insurance and social welfare system means that when Mr.
Xu lost a leg in a car accident a few years ago.
To pay about $5,000 for medical care, the couple had to borrow money from their family and friends.
They are still in debt. But, to Mrs.
Xu, the sparkling new refrigerator represents the idea that her family was not left behind.
"I'm really afraid to get out of the house because I'm afraid people will look down on me," she cried . ".
"I don't want anyone, friends, relatives or neighbors to think we're pathetic.
"Refrigerators are hardly a thing that can be seen everywhere in rural China.
At the end of 2006, there were more than 22 refrigerators per 100 rural households, while nearly 92 refrigerators per 100 households in the city.
But Xu's comments suggest that they increasingly havehave item.
15 well-known Chinese manufacturers including Haier, Hisense and Changhong are participating in the project.
They even designed special models to withstand the rigors of rural life, where frequent power surges and a wide range of rodents.
They also keep them relatively simple within the government --
Price cap specified
Refrigerator 2,000 yuan, TV 1,500 yuan, mobile phone 1,000 yuan.
Yuan, a farmer, said that since he was able to buy an affordable name, he would be more assured to make a big purchase
Brand products of well-known retailers.
"Before, when you buy
You never know what kind of problems will arise.
"Now I even have a warranty," Yuan said . ".
Beijing said if the project was extended to provinces outside Shandong, central Henan and southwest Sichuan, it could offer rebates for other appliances such as washing machines.
If this happens, Yu Minhong already knows what to buy next.
"Air conditioning," he stressed.
"But this is certainly an energy source --efficient one. ” ($1=7. 15 yuan)