China Tries to Fix Solar Panel Problems with Mergers, Reduced Gov. Support
December 24, 2012 8:11 AM
comment(s) - last by
Beijing's solar problems stem from rapid expansion over the past decade and issues with the U.S. and Europe
In response to troubles with its
solar panel manufacturing
, China is trying to get producers to merge.
Beijing, in particular, is facing problems with its solar panel industry and plans to fix it by reducing government support for the industry, encouraging mergers and blocking local leaders from supporting domestic producers.
Beijing's solar problems stem from rapid expansion over the past decade. It offered grants and low-cost loans, which led to many producers crowding the market. The end result was too many producers that flooded the market with supplies and were forced to lower prices in order to compete. The industry is now about $17.5 billion in debt.
Further complicating Beijing's solar issues is conflict with both the U.S. and Europe. Last month, a U.S. trade panel supported tariffs as high as 250 percent on imports of sola panels from China. This occurred after it was discovered that Beijing was subsidizing imports in an inappropriate way and affecting jobs abroad.
The European Union also started investigating complaints that China was subsidizing solar panel exports improperly and hurting both European producers and jobs.
Of course, China denied doing any of the above.
China has involved itself in many solar projects over the years, such as
to achieve 10 percent of its energy production from renewable resources by 2010, reaching 15 percent by 2020 through the use of wind, hydro, biomass and
China Energy Conservation and Environmental Group's (CECEP)
6.68 megawatt solar station
for cheap and efficient growing.
Solar panel companies haven't had an easy time in the U.S., either. Back in September 2011,
Silicon Valley-based solar panel company
Solyndra filed for bankruptcy
after receiving a $535 million government loan in 2009.
Reports stated that the White House pushed the loan ahead despite warnings about the viability of Solyndra in order to meet political deadlines
In October of this year,
, which is a Boston-based company that develops solar inverters, filed for Chapter 11 bankruptcy protection as a result of the poor state of the solar power industry as well as financial earnings
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RE: makes no sense
12/24/2012 1:44:46 PM
You can't really devalue your currency for a long term. The market catches up within months. You could buy US securities but China's US securities holding is only marginally larger than Japan's US securities holdings. Without China, there would have been double digit inflation in the US for the last decade, making us noncompetitive. Our major trade agreements benefits us way more than it does China.
RE: makes no sense
12/27/2012 2:56:01 AM
1) There wouldn't of been double-digit inflation, the Fed, and politicians of the era, wouldn't of allowed it. Interest rates would've been higher, and real income levels would've been lower, but double digit inflation we put to bed in the 80s. (I don't think todays Fed or politicians would put up the fight though, high inflation or bankruptcy is the only way the US will "pay" back its bonds and I think more people are realizing this)
2) A country definitely can hold down their currency till hell freezes over.. if they're content to pay the price. Probably why as many developing countries have the inflation they do, they're too busy trying to boost their exporters (and the wealthy probably are allowed to hold their wealth in dollars or euro's, thus screwing only the common man).
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