The government of China has announced a major overhaul of its solar panel industry. It will be actively encouraging mergers among producers of solar panels, reducing government support, and “blocking” local leaders from “supporting domestic producers.” And there has even been some talk that some producers will be allowed to go bankrupt.
The overhaul is designed to simultaneously strengthen the industry, which has suffered some setbacks recently, and also to address the concerns that the US and Europe have raised about the Chinese government violating trade rules. The Chinese solar panel industry has recently experienced large losses as a result of price-cutting wars between the producers and excessive production capacity.
The statement that the government released didn’t specify any details, but it did clarify that it views solar power as one of many “strategic emerging industries” that it considers important to develop.
“Chinese solar manufacturers have reported hundreds of millions of dollars in losses this year due to lower prices and slower sales following the 2008 global financial crisis,” the AP noted.
So far, the industry there has racked up debts of around $17.5 billion dollars, based on a report released in 2012 by a New York financial firm, Maxim Group.
The US, Europe, and India have initiated or completed investigations into unfair Chinese subsidies for Chinese solar firms. While China has denied this, the country and its solar companies have not convinced US investigators, and probably won’t convince European and Indian investigators. Thus, it is not surprising to see the country cutting its support for its solar firms.
For the fate of the sons of men and the fate of beasts is the same; as one dies, so dies the other. They all have the same breath, and man has no advantage over the beasts; for all is vanity. - Ecclesiastes 3:19