(Yicai Global) Sept. 19 -- China’s Guangdong province, which is home to many white goods manufacturers, is considering offering subsidies of up to CNY100 million (USD14.2 million) to people who ‘trade in’ their old household appliances to bolster flagging sales.

Subsidies will be set at no more than 10 percent of the product’s selling price and the maximum allowance for each item is CNY500 (USD71), according to the local government’s draft plan that is now soliciting public opinion.

Although the proposal states that the new scheme will run from September to November, the details are still being thrashed out and it has not been implemented yet, a market insider in the white goods sector told Yicai Global.

The government of the southern province is keen to encourage people to upgrade their home appliances amid flagging sales. Shipments tumbled 11.2 percent in the first half from the same period last year to CNY360.9 billion (USD51.7 billion), according to data released by the National Household Appliances Industry Information Center last month. Sales of TV sets and air conditioners plunged by over 15 percent while that of other large-sized white goods, such as refrigerators and washing machines, sank 12.5 percent.

Other parts of the province are also finding ways to drum up sales. The municipality of Foshan, home to big household appliance manufacturers such as Chigo and Galanz, is mulling offering its own trade-in subsidy scheme, said an insider at the Guangdong branch of bank card payment service provider China UnionPay Merchant Services, which would support the event. Should it go ahead, it will run from Sept. 23 to Nov. 30, with CNY7.9 million (USD1.1 million) worth of discounts.

Midea Group, which is based in Foshan, is in active communication with the local government about the details of the sponsorship plan, said Wang Mingzhi, general manager of the home appliance giant’s Guangzhou base. Midea already launched its own 'new-for-old' swap promotions on Sept. 9.

Gome Electrical Appliances is planning to introduce more discounts that will overlap with the government’s scheme, a company insider at the Hong Kong-based consumer electronics firm’s Foshan branch said. It would offer CNY800 (USD114) per item at most.

Editors: Tang Shihua, Kim Taylor