China plans to expand its home appliances replacement project from the initial nine pilot cities, aiming to enhance stimulation of domestic demand.

The program covers not only the purchase of new equipment, but also the recycling of old appliances and electronics like computers. Provinces willing and able to recycle old equipment can apply to the program, said Jiang Zengwei, vice minister of Commerce, at a Friday meeting held by the Ministry of Commerce (MOFCOM), the Ministry of Finance and the Ministry of Environmental Protection.

The domestic consumption stimulus package began June 1 of last year and will end May 31. It offers consumers in nine cities and provinces including Beijing, Shanghai, Changsha and Jiangsu Province subsidies for turning in their old appliances.

Under the program, consumers can get maximum subsidies of 400 yuan (US$58.59) for TVs and computers; 350 yuan (US$51.27) for air conditioners; 300 yuan (US$43.94) for refrigerators; and 250 yuan (US$36.62) for washing machines.

The used appliances are then sold to recyclers.

By February 4, the nine pilot provinces had recycled 6.42 million old home appliances, sold 5.87 million new units, and scrapped 3.12 million units.

LCDTV sets, triple or double-door refrigerators and energy-efficient air conditioners are the most popular items, said the MOFCOM.

Sales income generated by the program reached 23.2 billion yuan (US$3.40 billion), accounting for one third of income from color TVs, refrigerators, washing machines, air-conditioners and computers in total, said the MOFCOM.

In the fourth quarter last year, the sales income was 293.28 billion yuan (US$42.96 billion), up 9.4 percent from the previous quarter and 104 percent year-on-year, the ministry said.

"Home appliance replacement has played an active role in confronting the financial crisis and expanding domestic demand," Jiang said, adding 6 million families have received 2.28 billion yuan (US$333.96 million) in subsidies.

Sun Hongshan, general manager of the Beijing branch of Henan Xinfei Electric Co Ltd, Sunday told the Global Times that 40 percent of the company's refrigerators have been sold in the old-for-new project, which he said has been good for market demand, especially during the National Day and the New Year holidays.

"The policy has lifted the consumption pattern, for the consumers would like to upgrade their home appliances to middle or high-end ones," Sun said.

Lan Wei, a teacher at Beihang University, received 400 yuan in October for her old color TV before buying a new Panasonic TV for 7,900 yuan (US$1,157.34).

"It is a good deal, because the old TV had been used for years, and I never thought it could be recycled for money," she said.

However, Sun said the government should raise the subsidies, as they are not enough for some pricey appliances.

(Global Times February 8, 2010)