Ministry of Industry and Information Technology (MIIT) in 2010 will initiate the rural subsidy program for building materials, network and textile & apparel.
Huge foreign investment and fast-growing exports have long been major contributors to China's economic development. With the effects of the global financial crisis spreading throughout the world, the government was looking to tap domestic consumption, especially in unexploited rural markets.
China has a huge geographic diversity and some rural consumers actually have a very strong purchasing power. In response to these developments, the Chinese government has initiated a rural home appliance subsidy program over the past years, in order to shift the emphasis of economic growth from exports to domestic demand, and to encourage manufacturers to design products which are suitable for rural use.
Under the plan, the government provided a 13-percent subsidy to farmers who buy designated brands of color TV sets, refrigerators and mobile phones in the three agricultural provinces of Shandong, Henan and Sichuan, as well as Qingdao City. Chinese rural residents bought 27.8 million sets of home appliances under the program in the first 10 months of 2009.
The Chinese government hopes to improve the quality of farmers' lives and balance the country's urban and rural development. The subsidies give rural residents great incentives to buy. They also provide appliance makers excellent opportunities to make breakthroughs in rural areas.
