China's Cash For Clunkers Appliances Scheme Jacked Sales 500%... And They Just Expanded It Further

China iPhone Consumer Chinese

China created a special subsidy program for home appliance-purchases in rural areas in February 2009. The effect on sales has been enormous.

China Daily:

Sales of subsidized home appliances in China’s rural area surged 510 per cent year-on-year to 41.7 billion yuan ($6.13 billion) during the period, a statement on the ministry’s website said.

Rural residents bought 20.84 million sets of subsidized household appliances in the January-April period, up 370 per cent from a year earlier.

In April alone, 4.8 million sets of subsidized home appliances were sold, up 170 per cent from a year earlier, with sales totaling 10 billion yuan, up 260 per cent.

Sales of subsidized televisions, refrigerators and computers in the four months totaled 3.2 billion yuan, 3.2 billion yuan and one billion yuan, respectively, the statement said.

What’s funny is that the subsidy only amounted to 13% of the purchase price for appliances within the program. (TV’s, refrigerators, mobile phones, computers, washing machines, air conditioners, water heaters, micro-wave ovens and regular ovens). They probably didn’t expect such a small subsidy to send sales sky-rocketing as they did.

Next stop, keep an eye out for electric bikes, gas stoves, cookers, DVD players, gas stoves, and smoke exhaust ventilators. In March of this year China just added these to the subsidy scheme. At least they’re truly stimulating domestic demand here, even if they may be getting far more than what they bargained for.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.