Ministry of Industry and Information Technology Denies Pushing on Energy Saving Subsidy Policy

The energy-saving subsidy policy expired on June 1 this year. Affected by this policy, sales of many home appliance enterprises in China rose sharply last year. Some media reports pointed out that the government is in the process of formulating a new round of home appliances energy-saving subsidies and is expected to start in October. In response, Gao Dongsheng, deputy director of the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology of China, told reporters that "the Ministry of Industry and Information Technology has not received any notification that it will launch an energy-saving subsidy policy again."

In May this year, the Ministry of Finance, the National Development and Reform Commission, and the Ministry of Industry and Information Technology jointly issued the “Notice on Stopping the Promotion of Energy-Saving Appliance Subsidy Policy,” notifying that the implementation of the subsidy promotion policy for energy-saving home appliances has ceased after the expiration date, that is, from 2013 onwards. On the 1st of the month, consumers purchasing air-conditioners, flat-panel TVs, refrigerators, washing machines, and water heaters will no longer enjoy the central government subsidy policy.

According to the reporter's understanding, due to the impact of the end of the energy-saving subsidy policy, the Chinese home appliance market ushered in an unprecedented “crazy” at the end of May. According to the person in charge of Gome Appliances, the sales of Gome Terminals in May showed that the sales of home appliances more than doubled year-on-year. At the same time, he did not hesitate to point out that the reason for the sudden increase in sales was the withdrawal of the energy-saving subsidy policy on June 1. Many home appliance companies earned more than enough money in May. Take TCL as an example. According to data provided by the company, its May smart and 3D TV sales reached 176,000 units and 166,000 units, respectively, year-on-year growth. 172.5% and 72.1%. According to the relevant person in charge of TCL, the imminent expiration of the energy saving subsidy policy is the main reason for the surge in sales of TCL TV in May.

According to statistics, as of the beginning of June this year, the central government has allocated 12.2 billion yuan for energy-saving subsidies, and has promoted more than 65 million sets of five types of energy-saving appliances, stimulating consumer demand to exceed 250 billion yuan.

Some analysts pointed out that the subsidy policy has helped the home appliance industry survive the economic crisis and created beautiful sales data, but also laid down hidden dangers for the long-term development of the home appliance industry. Liu Buchen, an expert in the home appliance industry, told reporters that in recent years, many home appliance companies have seen “subsidized and thriving, and no subsidy is bad” phenomenon. The “subsidy dependency syndrome” in the home appliance industry has obvious symptoms. "Especially the second and third tier brands basically rely on policies and subsidies to survive." Liu Buchen predicts that if there is no continuation of promotional policies in the future, Chinese household electrical appliance companies or home appliance companies will usher in a new round of reshuffle, “The second and third tier brands will experience sharp declines in profits, and a large number of weaker companies will close down. The entire Chinese home appliance industry will usher in a new round of integration."

Fang Hongbo, chairman of Midea Group, proposed to Premier Li Keqiang in April this year that he hopes to reduce the introduction of some subsidy policies in the future. He must rely on market forces to push forward and force the transformation of the company. Li Keqiang said at the time that the government could not bring greater negative impact on future market-oriented competition because of short-term measures.

Recently, media reports pointed out that some media reports pointed out that the government is bringing forth a new round of home appliance energy-saving subsidies and is expected to start in October. With the help of the “informed person”, the new energy conservation subsidy policy will favor “energy efficiency leaders” in various industries, such as air energy water heaters, color TVs, air conditioners, refrigerators, washing machines, solar energy, and air conditioners. The industry is expected to continue to receive Financial subsidies.

In response, Gao Dongsheng, deputy director of the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology of China, responded to a reporter’s question on “Energy Efficiency Improvement Plan 2013-2015 for Motors” held on August 6, 2013, and told reporters that household appliances can be energy-efficient. The establishment and implementation of the subsidy policy is coordinated by the Ministry of Industry and Information Technology. However, in May this year, the Ministry of Finance, the National Development and Reform Commission, and the Ministry of Industry and Information Technology jointly issued the “Notice on Stopping the Promotion of Energy-Saving Appliance Subsidy Policy”, stating that after the implementation of the energy-saving appliance subsidies promotion policy expires, it will cease to be implemented. "The Ministry of Industry and Information Technology has not received any notification that it will launch energy-saving subsidies again."