China expands rural home appliance subsidies

BEIJING, Dec. 31 (Chinese media) -- China will expand

subsidies for farmers' purchase of home appliances nationwide from Feb. 1 to

boost consumption, said the General Office of the State Council on Wednesday.

At present, subsidies only apply to rural residents

in 12 provinces, or less than half of the total.

Also, farmers who buy motorcycles, computers, water

heaters and air conditioners will get the subsidies, said the Office in a

statement on improving the circulation network to boost consumption.

China will grant a 13 percent subsidy to farmers who

buy color TVs, refrigerators, mobile phones, washing machines and freezers. A

pilot program began in December 2007.

Local governments must clamp down on sales of

substandard appliances to farmers and ensure good quality and after-sales

service to stimulate rural consumption, said the Office. The Office also

proposed expanding the sales network.

It also urged stronger encouragement of vehicle

purchases and financial support for small and medium-sized merchandising

businesses.

China is pinning hopes on domestic demand as the

global economic crisis has hit exports.

Retail sales in November grew at an annual rate of

20.8 percent,1.2 percentage points slower than in October but 2 percentage

points higher than last November's increase.