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US$2.9b subsidies for home appliance buyers

CHINA will grant 20 billion yuan (US$2.9 billion) in subsidies this year to encourage spending on home appliances in rural areas, the Ministry of Commerce said yesterday.

The subsidies are estimated to boost spending by 150 billion yuan, Liu Haiquan, director at the comprehensive department under the ministry, said in Beijing yesterday.

"The Ministry of Commerce and the Ministry of Finance are mapping out measures to facilitate rural residents to get the subsidies as the current procedure is complicated," Liu added.

The "Home Appliances to the Countryside" policy was launched earlier this month to boost rural consumption and promote coordinated development in domestic consumption and exports.

Rural residents can enjoy a 13-percent refund on the price of listed home appliances, including computers, air conditioners, water heaters, televisions, refrigerators, washing machines, motorcycles and mobile phones.

Almost two-thirds of China's 1.3 billion people live in rural areas, and household-appliance ownership is 20 years behind that in the cities.

"The personal annual income in rural areas reached 4,761 yuan last year, equivalent to the income of urban residents in the 1990s when home appliances became popular," Liu said.

The Ministry of Finance estimated that the stimulus plan can increase spending by 1.6 trillion yuan over four years.

Output and export growth in China's home appliances industry has plunged since the second half of last year due to a drop in overseas demand because of the financial crisis, according to the Ministry of Industry and Information Technology.


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