China launches subsidies for energy-efficient products

China will offer subsidies to buyers of certain energy-efficient products, as part of the country's efforts to save energy and stimulate domestic demand, the Ministry of Finance (MOF) said Monday.

The country will provide subsidies worth 14 billion yuan ($2.2 billion) to boost purchases of energy-saving desktop computers, and five types of energy-saving products for commercial use: large air conditioning units, fans, water pumps, compressors and transformers.

The one-year subsidy program is expected to drive up sales of the energy-saving products by 155.6 billion yuan and help save 31.3 billion kilowatt-hours of electricity each year. The market share of these products will be raised to over 40 percent, the MOF said in a statement on its website.

Detailed rules for the subsidy program will be released soon, the statement said.

The new subsidy program has been welcomed by computer manufacturers.

"The program will help boost domestic sales of desktop computers, which have been dragged down by the ending of a subsidy program for rural consumers and an old-for-new home appliance subsidy program," Wang Jiping, a senior analyst at research firm IDC, told the Global Times.

The sales volume of desktop computers only grew by 2 percent year-on-year to 7.46 million units in the first half of 2012, down from 8 percent growth in the same period last year, due to weakening demand and competition from tablet computers, according to market research firm GfK China.

The latest subsidy scheme is part of China's efforts to save energy and boost domestic demand amid the economic slowdown. On June 1, the country began to offer subsidies for consumers of five types of energy-saving home appliances - flat-panel televisions, air conditioners, refrigerators, washing machines and water heaters.

The subsidy program has yielded remarkable results, the MOF said, noting that the total sales volume of these five types of energy-saving home appliances has amounted to 6.68 million units since June.

"The effect of the subsidy program will be more obvious during the week-long National Day holidays (starting from October 1), and we estimate it will boost home appliance sales by 7 to 8 percent over the next year," Han Yu, research director at Beijing-based consultancy All View Consulting, said in an interview with the Global Times Monday.