China's rural PC program

The latest report from CNNIC on Internet development in China claims close to 300 million netizens, a 22.6% Internet penetration rate. But behind the impressive figure, one should not forget that there are officially only 84.6 millions rural Internet users (still up from 52.7 million in 2007 and with some of the poorest provinces having doubled their penetration rate, e.g. in Guizhou or Yunnan). In other words, the bulk of users resides predominantly in urban areas.

But the Chinese government is not giving up on its aim to reduce the digital divide between rural and urban areas. Earlier this month, the Ministry of Commerce announced the winning bidders for the rural computer subsidy. Companies including Lenovo, Dell, HP, Acer, Founder, Haier, Great Wall, TCL, Tongfang, Inspur, Hasee, Beijing Manjiang, Malata and Southwest will be supplying PC priced from USD 290 to USD 510.

Close to 60% of the population with registered permanent rural residences (about 200 million households) will be eligible to obtain a 13% subsidy if they purchase one of the listed PC. Unfortunately, the timing may not be right as the current economic downturn is not prone to spending money on “luxury items”.