Inside China Today

China Trying to Promote Rural Electronics Sales to Stimulate Economy

Epoch Times: In order to expand domestic demand and stimulate the economy, Beijing has been trying to push household electronic appliances to the rural market. However, experts believe such efforts cannot succeed unless farmers’ income is significantly increased.
Chinese Ministry of Commerce spokesman Yao Jian said on April 15 that the volume and margin of the household electrics, which has historically represented 50 percent of all Chinese exports, are decreasing due to the lowering exportation level. Beijing has launched stimulus plans by diverting electronics manufacturers focus to domestic market, betting mostly on rural market due to the  saturation in urban markets.

But experts are not optimistic towards the plan. Peking University professor Xia Yeliang, for example, said that marketing efforts alone cannot change the situation. He attributes the stagnation of rural markets to the low income level of the population, and believes that the key to expanding rural market is to increase farmers’ income and improve infrastructure construction.

According to an official report on China’s rural economy, the average income and household expenditure of rural populations in 2008 was lower than one third of urban residents, which represents at least 10 years’ gap in living standards.

It is estimated that Chinese rural residents amount to 70 percent of the total population but contributes to only 30 percent of the market. Farmers cannot afford to purchase or use household electrical appliances even if the prices are lowered.

In recent years, rural area are facing more severe challenges from the increasing unemployment rate. According to a survey of China’s National Bureau of Statistics, by February 2009, 11 million migrant workers were unemployed.

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