George Scott
According to the People’s Daily, over the next three
years, the Chinese government is aiming to sell 600 million home and kitchen
appliances to their rural inhabitants and is aimed at helping to modernize and
improve the life’s of many rural residents whilst at the same time stimulating
domestic demand to compensate for waning foreign demand for Chinese
manufactured goods.
家电下乡Jia dian xia xiang, “Home appliances to the countryside”
is a rebate scheme designed to encourage the purchase of home and electrical
appliances by rural residents, which went nationwide after the Spring Festival
this year.
Originally piloted in three provinces in 2007: Shandong, Sichuan
and Henan, the scheme will allow rural purchasers to receive a 13 percent
rebate on the price of televisions up to the value of 2,000 yuan, fridges up to
2,500 yuan, washing machines up to 2,000 yuan, and mobile phones up to 1,000
yuan. In theory this will have two important effects: the first as a means to
counter balance waning foreign demand for manufactured goods by tapping into a
potential market of 700 million consumers in rural china, helping prevent
further job losses in the manufacturing sector; the second is to help modernize
rural China, raising their standard of living and making their lives more
comfortable.
However
the scheme hasn’t gone as smoothly as expected. An article published by British
publication, the Daily
Telegraph, highlights a series of problems that have been encountered
implementing the scheme. The list sighted a complicated rebate process making
it difficult for customers to actually obtain the rebate, as well as
unscrupulous shop owners increasing the prices of the goods prior to applying
the discount as factors, both as factors detracting from the schemes
effectiveness.
In
spite of these potential pit falls preliminary results convinced authorities it
was worth extending nationwide. During the first 20 days of January,
"Chinese farmers had bought more than 160,000 subsidized goods. This is
already 90 percent of the total sold in December 2008." (Chinaview.cn,
30 January 2009)
Sources:
China
View, ChinaBizGov
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