China expands rural home appliance subsidies

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.