China's Ministry of Finance and Ministry of Industry and Information Technology (MIIT) recently announced that the "Appliances to the Countryside" subsidy program will end in Shandong, Henan, and Sichuan on November 30. Beginning December 1, 2011, all eligible beneficiaries of the program whose official residence is located in one of the above three provinces will no longer enjoy subsidized prices on household appliances.
According to one source involved with the subsidy program, household appliance manufacturers have benefited from the scheme, which allowed several larger companies to increase production capacity and bringing a number of smaller firms into the industry. With the subsidy plan ending, however, the rural market will see a decline sales and potentially a supply glut leading to price wars.
Based on the original 4-year duration of the project, 14 provinces, cities and autonomous regions in China will continue to offer home appliance subsidies to rural consumers through to the end of November next year. The remaining areas are set to conclude the program in late January 2013.