Insufficient Enthusiasm for the Home Appliances to the Countryside “Unfinished”

On October 10, it was reported that in order to stimulate consumption and expand domestic demand, a new round of “cars to the countryside” policy is expected to be introduced in the near future. In addition, the "home appliances to the countryside" policy is expected to continue to implement and improve supporting measures. In response, an informed source said that the Ministry of Commerce did study a series of measures to promote consumption, but these policies have not been finalized.

The above-mentioned sources further stated that as a routine work of the Ministry of Commerce, the Ministry of Commerce did initiate a series of initiatives to promote consumption of the New Deal. However, these measures are still only a working initiative. The final decision is not really made by the Ministry of Commerce, if other departments object to the opinions. Larger, it is very likely that it will not be introduced.

I. "Cars go to the countryside" or expansion It is understood that this "car to the countryside" policy is expected to "expand" compared with before. Prior to this, the state provided a one-time financial subsidy for farmers to purchase mini-buses with a displacement of 1.3 liters or less, and the new round of policies may expand the subsidy to 1.3 liters or less for small-displacement cars and heavy trucks.

The above news also stated that regarding the “Home Appliances Going to the Countryside” policy that is about to expire in January 2013, relevant ministries and commissions are brewing a new round of pro-consumption policies. The new pro-consumption policy may be introduced before the end of this year, but subsidies for home appliances to the countryside will focus on energy-saving and environmentally-friendly, small and medium-sized products. Previous air conditioners, refrigerators, televisions and other large items will not be included.

The implementation of the “Car to the Countryside” policy last time was from March 1, 2009 to December 31, 2010. It stimulated China to surpass the United States and became the world’s largest auto market. Since the implementation of the "Home Appliances to the Countryside" policy, since 2007, it has also played a significant role in the promotion of the 3rd and 4th markets.

Zhao Ping, deputy director of the Research Institute of Consumer Economics of the Ministry of Commerce, said on October 10 that some of its previous studies showed that over the past decade, due to the implementation of a series of consumer spending policies, China’s consumption growth has gradually increased and remained at a high level. The total retail sales of consumer goods increased from 4.3 trillion yuan in 2001 to 18.3 trillion yuan in 2011, an increase of 3.3 times, with an average annual increase of 15.5%. She believes that the expansion of consumption policies has promoted the rapid growth of social consumption, and the policies for automobiles and home appliances to the countryside have drastically narrowed the gap between durable consumer goods in urban and rural areas and accelerated the pace of upgrading urban consumption structures.

Second, the lack of enthusiasm for home appliances companies on October 10th, said the "home appliances to the countryside" New Deal may cancel the subsidies of large appliances, some large home appliances companies have performed more calm.

Li Congxiang, a spokesperson for Skyworth, a color TV company, said that even if the New Deal cancels subsidies for color TVs, it will have no impact on the company’s operations. “The policies for home appliances to the countryside have been implemented for several years. Many farmers have already enjoyed this policy and purchased new televisions. There is no new demand for purchases. If there are rigid users, they will not care about these hundreds of subsidies."

According to reports, in mid-September, the Ministry of Industry and Information Technology had organized a meeting of enterprises to discuss whether the policy of home appliances going to the countryside continued. Haier, Hisense, Midea, Gree and other mainstream home appliance manufacturers all expressed opposition. The reason for the opposition of the company is that the policy has reached the expectations in the past few years, and the market has been overdrawn under the policy. It is more difficult to sell products now. In addition, some miscellaneous brands revitalized with “home appliances to the countryside”, resulting in excess capacity.

Galanz is a manufacturer of both home appliances and small household appliances. The company’s spokesperson Lu Yonglie also believes that there should be a scientific assessment of the exit of old policies and the introduction of new policies.

He pointed out that the original policy has an obvious role in driving the industry, but the pull on domestic demand is not obvious. “In terms of industrial preparation and technological innovation, the timing of integrating small household appliances into new policies is ripe, and the overall scale of small household appliances is Large household appliances are not bad. Bringing the urban lifestyle brought by small household appliances to rural areas is also the direction of China's rural urbanization.”

Lu Yonglie also suggested that if the new policy is implemented, it needs to simplify the subsidy process and it is easy to operate to bring about good results. “For example, consumer purchases can reduce personal income tax, just as if you were buying a house and you can reduce income tax, the effect would be very good. For the energy-efficient products developed by enterprises, the corporate income tax should also be reduced, one to stimulate consumption and one to promote industrial upgrading."

As the new policy is still in the brewing period, home appliance manufacturers are still waiting for more clear policy content will be implemented to arrange product R & D, the company still has a three-month preparation period.

Third, "earlier exposure or increase the difficulty of launching"

Zhao Ping said that she has not yet heard about the news that a new round of home appliances and rural areas will be introduced.

The aforementioned informed sources believe that before the relevant departments reached an agreement on these (new consumption-promoting) initiatives, the media’s early exposure of the business sector’s motion was not conducive to the final introduction of the policy. “The media reported only one statement, but once reported, it will The resulting misunderstanding of these measures has caused the outside world to increase the difficulty of the adoption of these measures and it is more likely that they will not be released."

Some analysts said that under the background of the central government’s efforts to “stabilize growth” and promote domestic demand, the launch of a new round of “cars to the countryside” policy and the continued implementation of the “home appliances to the countryside” policy is one of the current best choices for economic stimulus policies. .

According to reports, the number of cars per 1,000 people in China in 2011 was 70, which is about half of the world average. Second- and third-tier cities and rural areas have lower vehicle ownership and more rigid demand. In 2011, following the cancellation of related automobile consumption stimulus policies such as “cars going to the countryside”, the sales growth of China’s auto market declined, which only increased by 2.5% year-on-year, the lowest growth rate in 13 years.

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