“It will be hard for enterprises that focus on pricing rather than technological upgrades to survive in market,” said Lu Renbo of the Market Economy Research Institute. The institute is part of the State Council’s Development Research Center.

Chinese consumers are no longer looking simply for low prices. They are focusing now on quality and performance, said Lu at a forum on building competitiveness in the home appliance industry.

In a survey Lu’s institute conducted on the home appliance market in 2000, 83.4 percent of respondents said low prices were key when deciding which product to purchase. In a similar survey this year, 85.1 percent said good quality and performance are more important than price.

“Changing consumption trends mean home appliance makers must invest more in technology research and new product development to improve their competitiveness,” Lu said. Some domestic manufacturers, like Changhong, Hisense and Kelon, have already recognized the trend and have been focusing more on R&D.

“In the long term, technology will become one of the key factors driving the industry’s development.”

Lu emphasized that home appliance makers should concentrate on energy conservation technologies.

Short supplies of power of have been a serious problem since last year, and home electrical appliances like refrigerators and air conditioners are heavy power consumers.

The nation’s 130 million refrigerators consume nearly half of all residential power supply, and air conditioners gobble more than 40 billion kilowatt-hours every year. That figure is expected to continue rising.

Lu’s consumer survey indicated that most consumers have become aware of the need to conserve and now prefer to buy energy-efficient models.

(China Daily May 11, 2004)