Apparently they've reached overcapacity. Bradsher reports that China’s economic planners want to cut off loans for all but the strongest solar manufacturers and let the rest go bankrupt. Would that be a good thing? It depends. The price of Chinese solar panels would likely rise as a result. That would provide a boost to U.S. solar manufacturers who have been struggling against cheaper Chinese imports. (In May, the U.S. Commerce Department slapped a 31 percent tariff on imports of silicon photovoltaic cells from certain Chinese manufacturers, alleging that they were unfairly subsidized.)http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/05...
...alleging that they were unfairly subsidized.*blink*...and US government loan guarantees to panel makers are not a subsidy?Steve
Steve,Read the article. The scale of the subsidy is very different. The US provided around $14 billion in loan guarantees since 2009. By contrast, China’s state-owned banks alone have shelled out $18 billion in low-rate, preferential loans to solar companies over the past five years — most of which have gone to basic factories and manufacturers. In addition, China’s local governments have provided a slew of loan guarantees and cheap land to solar producers. Bradsher reports that the total subsidies could come to $50 billion over the next 20 years for every 10 gigawatts of solar power installed.http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/05...
MomThe scale of the subsidy is very different.So if a subsidy is a small one it's ok but if it's a large one it's not ok. Isn't that hyprocrisy ?
So if a subsidy is a small one it's ok but if it's a large one it's not ok. Isn't that hyprocrisy ?No.Targeted subsidies are designed to get a company past a specific hurdle (R&D, setting up mfg, etc) that otherwise would prevent the company from becoming competitive. Once PAST that hurdle, the company makes it on its own (i.e. no further subsidies required). Solyndra was past that hurdle. But the entire market changed--and that is what killed Solyndra.China heavily subsidized that entire industry for years--with the intent of taking over the majority of manufacturing for that industry worldwide. They KNEW they would lose money on some/many of the companies--but being the dominant producer in the end means they will profit in the long run. A willing govt is able to bear losses for years because it can shift resources (costs/revenues) and run a deficit. Companies can not do the same for years unless they have access to other assets to fund the period when losses are incurred. Govt can and does do precisely that--look at the US.
jerryjabTargeted subsidies are designed to get a company past a specific hurdle (R&D, setting up mfg, etc) that otherwise would prevent the company from becoming competitive. Once PAST that hurdle, the company makes it on its own (i.e. no further subsidies required).</IReally ?? Try telling that to countries which have to compete with dumped US subsidized agricultural products on the world markets. Trying to deny that the US is not one of the biggest subsidizers and dumpers is hypocrisy. A willing govt is able to bear losses for years because it can shift resources (costs/revenues) and run a deficit.Exactly. http://triplecrisis.com/who-pays-for-agricultural-dumping-fa...As the table shows, Mexico was indeed flooded with imports, they were exported by the United States at prices below production costs, Mexican prices fell dramatically, and production declined in many cases. The eight products studied all saw significant growth in U.S. exports, from the 159% increase in soybean exports to the 707% increase in pork exports. All eight products showed positive dumping margins – 5-10% for the meats, 17-38% for the crops. For all eight products, real producer prices in Mexico fell dramatically, with real 2005 prices 44%-67% lower than their levels in the early 1990s. Mexican production fell for all the crops except corn, and rose significantly for meats, reflecting the rising demand for meat-based protein in the Mexican diet. Import dependency increased dramatically for all products.It's all about pork jerryjab, pure unadultered pork, that's all.RegardsHarmy
Mexico was indeed flooded with imports, they were exported by the United States at prices below production costsThat was a choice made by Mexico when they agreed to NAFTA. They already knew the US provided agricultural subsidies--and US costs to produce many agricultural products are lower than Mexican costs (on average). Not the same situation as with solar panels.
Not the same situation as with solar panels. Well jerryjab, regardless of whether China is blocked from selling solar panels to the US other countries will be buying China's stuff because it is cheaper that is the problem for the US today. The US cannot compete.RegardsHarmy
other countries will be buying China's stuff because it is cheaperThat is their choice. But the US does not have to play the game China does.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |