The government has announced it will subsidize more white good sales in rural areas in ten more provinces this month in addition to the three polite provinces last year. The project provides discounted white goods to rural residents to stimulate domestic consumption and the industry's development.

Our reporter Zhao Kun takes a closer look.

Reporter:
From Monday this week, rural residents in 14 provinces across the country will be able to buy selected TV sets, refrigerators, washing machines and mobile phones at a 13 percent discount, paid for by the government. A senior official from the Ministry of Finance Wang Bao An specifies the benefits the policy will bring in.

"As we estimate, the sales volume of the white goods in four categories will hit over 600 billion yuan, and some related sectors, such as electricity and telecommunications, will also harvest a 300 billion yuan income. That's more than 900 billion yuan in total."

As the world financial crisis takes a toll on China's economy, the white-goods industry has also suffered a slump in recent few months. Statistics shows that compared with the corresponding period in 2007, the third quarter this year sees a drop of 11% in the export volumes of white goods. Therefore, it is hoped the policy will stimulate the sluggish sales and tap the potential market in China's rural areas.

chairman of China Household Electrical Appliance Association Huo Dufang gives an example:

"Let's take washing-machines as an example. There are only 46 washing-machines for 100 agricultural households. If the ratio goes up to 50, over 10 million will be produced to meet the market needs, taking up 50% of the manufacturing output."

The designated companies of the project, including state-owned and private enterprises as well as joint ventures. An official from the Ministry of Commerce, Liu Zhengquan, says:"The project is also aimed to crack down on counterfeit white goods in country areas. The manufacturers winning the bid can also guarantee the quality of their products and provide after-sale service."

In the pilot program started in last December, three major agricultural provinces - Shandong, Henan and Sichuan were chosen as the experimental zones to enforce the policy. What's more, the subsidy will go nationwide and cover all the rural regions in China from February 1st next year. However, some people are also concerned that the wide spread use of household appliances will overload the unfledged infrastructure, such as electricity, telecommunication and running water, in the remote and less-developed areas.
 
For China Drive, I'm Zhao Kun.