While a 13 percent discount might not sound like much, the bustle inside one of Zhangqiu’s electronics shops suggests that the savings really matter to farmers. Retailers hang huge red banners in front of their stores proclaiming the program, dubbed “Home appliances go rural”. The local government has pulled out all the stops to make sure local farmers learn about the opportunity, blanketing local media with reports and handing out leaflets. “This can help soak up producers’ excess capacity and kick-start rural consumption,” said Du Linjun, director of the Finance and Trade Office of Zhangqiu County. The concept is enticingly simple: give farmers the same tax rebates long given to exporters of home appliances, removing a policy bias towards exports and helping manufacturers tap a potentially huge pool of consumers in rural China. The subsidies are part of a battery of policies by Beijing aimed at spurring domestic consumption and improving the lot of the country’s roughly 740 million rural residents, who make up 56 percent of the population but have not benefited nearly as much from the economy’s roaring growth as people in cities. Yuan was the beneficiary of a pilot scheme entitling each rural family in Shandong and two other provinces to a 13 percent government rebate on the purchase of up to two television sets, two refrigerators and two mobile handsets. “This is like free food falling from the sky!” “Who can believe it? How come the government is giving us money to buy things?” the bubbly 51-year-old asked, speaking in the thick accent of the eastern province of Shandong. A local farmer checks refrigerators at a home appliance market in Zhangqiu county, Shandong province January 28, 2008.
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