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Subsidy plan to boost sale of appliances and vehicles
By Joyce Pan and Vivian Jin |
May 20, 2009, Wednesday
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Print Edition
Print Edition
CHINA will expand its ongoing subsidy program to encourage consumers and businesses to turn in their old vehicles and home appliances for newer, more energy-efficient models, the State Council said yesterday.
The government will raise subsidies for vehicle replacements to 5 billion yuan (US$735 million) from 1 billion yuan, and set aside 2 billion yuan to encourage home appliance upgrades, according to a statement issued after a Cabinet meeting. Details of the program, including when it would begin, were not immediately available.
The move follows earlier government subsidies that targeted the replacement of small commercial vehicles and provided aid for rural residents to upgrade their lifestyles - and help boost China's flagging economy.
"The effort is needed to further stimulate domestic consumption after the subsidies given to rural residents to buy home appliances and vehicles played a key role in economic development by boosting domestic spending," the Cabinet said.
"It will also help reduce pollution and increase energy efficiency."
The plan builds on 1 billion yuan in subsidies that are being distributed this year to boost purchases of medium-sized buses in rural areas and large buses throughout the country.
The list of replacements qualifying for financial aid will be expanded to medium-sized coaches in all parts of the country, small to mid-sized trucks and gasoline-powered and diesel vehicles that fail to meet specified emissions standards. Owners who replace these outdated vehicles can receive compensation equal to the purchase tax on the new vehicle.
Home appliance subsidies for rural residents began under a trial program last year and expanded across the nation on February 1. China expects to hand out 20 billion yuan in these subsidies this year, generating 1.6 trillion yuan in sales over the next four years.
As a result of the subsidies and other factors, retail sales rose 14.8 percent in April from the same period a year ago to 934.32 billion yuan, according to the National Bureau of Statistics. The growth rate was 0.1 percentage point higher than in March.
Under the new plan, consumers across the country will receive a 10 percent refund on the purchase price of a new home appliance when they recycle an old one - subject to maximum amounts that were not revealed yesterday.
The subsidies will be handed out at first under a trial phase in nine areas including Shanghai, Beijing, Tianjin and several coastal provinces.
Televisions, refrigerators, washing machines, air conditioners and computers will be among the qualifying items.
"It will help a lot in boosting consumption and promoting production," said Li Fuchun, secretary general of a Shanghai home appliance association. "There's a large number of home appliances that are 10 years and even 20 years old, and it's time for their owners to upgrade."
Li also said the decision is in line with the government's plan to increase energy efficiency, cut emissions and control pollution.
The government will raise subsidies for vehicle replacements to 5 billion yuan (US$735 million) from 1 billion yuan, and set aside 2 billion yuan to encourage home appliance upgrades, according to a statement issued after a Cabinet meeting. Details of the program, including when it would begin, were not immediately available.
The move follows earlier government subsidies that targeted the replacement of small commercial vehicles and provided aid for rural residents to upgrade their lifestyles - and help boost China's flagging economy.
"The effort is needed to further stimulate domestic consumption after the subsidies given to rural residents to buy home appliances and vehicles played a key role in economic development by boosting domestic spending," the Cabinet said.
"It will also help reduce pollution and increase energy efficiency."
The plan builds on 1 billion yuan in subsidies that are being distributed this year to boost purchases of medium-sized buses in rural areas and large buses throughout the country.
The list of replacements qualifying for financial aid will be expanded to medium-sized coaches in all parts of the country, small to mid-sized trucks and gasoline-powered and diesel vehicles that fail to meet specified emissions standards. Owners who replace these outdated vehicles can receive compensation equal to the purchase tax on the new vehicle.
Home appliance subsidies for rural residents began under a trial program last year and expanded across the nation on February 1. China expects to hand out 20 billion yuan in these subsidies this year, generating 1.6 trillion yuan in sales over the next four years.
As a result of the subsidies and other factors, retail sales rose 14.8 percent in April from the same period a year ago to 934.32 billion yuan, according to the National Bureau of Statistics. The growth rate was 0.1 percentage point higher than in March.
Under the new plan, consumers across the country will receive a 10 percent refund on the purchase price of a new home appliance when they recycle an old one - subject to maximum amounts that were not revealed yesterday.
The subsidies will be handed out at first under a trial phase in nine areas including Shanghai, Beijing, Tianjin and several coastal provinces.
Televisions, refrigerators, washing machines, air conditioners and computers will be among the qualifying items.
"It will help a lot in boosting consumption and promoting production," said Li Fuchun, secretary general of a Shanghai home appliance association. "There's a large number of home appliances that are 10 years and even 20 years old, and it's time for their owners to upgrade."
Li also said the decision is in line with the government's plan to increase energy efficiency, cut emissions and control pollution.
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