China's US$5.8b subsidy scheme to boost consumption
By Cathy Ding |
May 17, 2012, Thursday
|
Print Edition
Print Edition
CHINA yesterday said it will subsidize energy-saving home appliances, automobiles and other electric items to the tune of 36.3 billion yuan (US$5.8 billion) to boost domestic consumption after a similar scheme ended last year.
The State Council, China's Cabinet, said in a statement that the subsidy for energy-efficient consumer products may stimulate domestic consumption as well as push forward economic restructuring.
Air conditioners, television sets and other electric appliances will get a subsidy of 26.5 billion yuan, while 2.2 billion yuan will be for energy saving lamps and LED lamps. Another 6 billion yuan will be used to subsidize purchases of automobiles with engines of 1.6 liters and under.
But market watchers warned that the incentives may not be a major driver of earnings for home appliance makers in the near future.
"Sales of home appliances will still largely depend on the macroeconomic environment and property sales," Essence Securities wrote in a note yesterday. "Leading manufacturers are expected to benefit more from the new subsidy program."
The sales of home appliances fell in the first quarter this year after the previous subsidy program expired at the end of last year.
In the first quarter, the sales of home appliances dipped 0.53 percent annually and that of air conditioners and electrical heaters sank 3.2 percent and 24.8 percent, the Ministry of Commerce said last week.
The State Council, China's Cabinet, said in a statement that the subsidy for energy-efficient consumer products may stimulate domestic consumption as well as push forward economic restructuring.
Air conditioners, television sets and other electric appliances will get a subsidy of 26.5 billion yuan, while 2.2 billion yuan will be for energy saving lamps and LED lamps. Another 6 billion yuan will be used to subsidize purchases of automobiles with engines of 1.6 liters and under.
But market watchers warned that the incentives may not be a major driver of earnings for home appliance makers in the near future.
"Sales of home appliances will still largely depend on the macroeconomic environment and property sales," Essence Securities wrote in a note yesterday. "Leading manufacturers are expected to benefit more from the new subsidy program."
The sales of home appliances fell in the first quarter this year after the previous subsidy program expired at the end of last year.
In the first quarter, the sales of home appliances dipped 0.53 percent annually and that of air conditioners and electrical heaters sank 3.2 percent and 24.8 percent, the Ministry of Commerce said last week.
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