If China was trying to convince the world and the US that it doesn’t unfairly subsidize its solar panel makers, it has a strange way of doing that, as reflected by a recent series of high-profile moves that seem to say just the opposite. In the latest of those moves, Chinese investors — most likely local governments or financial institutions — have purchased a hefty 3 billion yuan, or nearly $500 million, worth of LDK Solar (NYSE: LDK) short-term notes at a meager interest rate of just 6.8 percent. (company announcement) That rate looks like a huge bargain for LDK, which reported a massive $115 million loss in the third quarter and whose other debt issued earlier this year to global investors now trades at about 50 cents on the dollar. Of course all this shows that LDK is able to borrow money at highly favorable rates from the Chinese government or government-backed entities, even as Beijing vehemently denies it unfairly supports to its solar companies amid a US anti-dumping probe that is likely to result in punitive tariffs against Chinese solar cell makers. (previous post) This latest contradiction comes on the heels of other similar gaffs, including wind power equipment maker Ming Yang’s (NYSE: MY) October announcement that Beijing will provide it with up to $5 billion to help finance its sales (previous post); and a top government official’s announcement in November of a new campaign to help developing countries build new solar plants. (previous post) I suspect that these moves from Beijing and local governments are less a deliberate attempt to anger Washington, and more a reflection of the longer term reality that China does strongly support its solar sector and is having a difficult time changing its ways. Regardless of the reasons, Beijing needs to stop this kind of action and even take one or 2 steps in the other direction — for example by letting a weak player like LDK fail — if it wants to ever resolve its solar trade dispute with Washington.
Bottom line: The latest government rescue for LDK underscores China’s ongoing support for its solar sector, undermining Beijing’s claims that it doesn’t provide unfair subsidies to the industry.
Related postings 相关文章:
◙ China Retaliates With Own US Solar Probe 中国启动对美可再生能源补贴调查
The latest buzz surrounding an overseas China energy deal, in this case involving Sinopec’s (HKEx: 386; NYSE: SNP) bid for a South American asset, casts a spotlight on a range of market factors that could come together to make 2012 a big year for overseas resource M&A by Chinese firms. According to foreign media reports, Sinopec, China’s largest refiner which would also like to become a major crude oil producer, is the leading candidate to buy some of Brazil’s most promising offshore oil assets from Britain’s BG Group (London: BG) (
The telecoms world was buzzing over the weekend with a number of interesting news bits, including Huawei’s latest bid to win Western approval, a new wrinkle in an ongoing anti-monopoly probe in the broadband space, and the latest rumors of the imminent arrival of Apple’s (Nasdaq: AAPL) iPhone 4S to China. Let’s start with Huawei, China’s telecoms superstar whose efforts to enter the US have been repeatedly thwarted by politicians worried that the company is just a spying arm of Beijing despite its steady stream of efforts to prove otherwise. In the latest of those efforts, Huawei has said it will voluntarily restrict its business in Iran, a regular nemesis of the US and other Western nations that suspect it is trying to develop atomic weapons. (
While most of the China Internet world has been fixated on the meteoric rise of Sina’s (Nasdaq: SINA) Weibo microblogging service, a rival offering from Tencent (HKEx: 700) called Weixin, which literally means “tiny letter”, has quietly gained momentum and could pose a serious challenge in the near term. The looming Weibo vs Weixin rivalry also casts an interesting spotlight on the broader issue of PC vs mobile Internet, as Weibo is the clear leader in desktop web surfing while Weixin has a number of features that make it more suitable for mobile Internet use. Domestic media are reporting that Weixin had 50 million registered users, 20 million of those active, at the end of November. (
E-commerce leader Alibaba, scrambling to find financing to buy back a 40 percent stake in itself held by Yahoo (Nasdaq: YHOO), is in a sudden scramble to tell the world why it’s worth $32 billion — a number it helped to float into the market back in September and one which, in my view, seems ridiculously high. In separate news bits from the last day or so, media are reporting the company’s Etao e-commerce search engine has launched a historical pricing search feature (
Starbucks (Nasdaq: SBUX), whose name in China conjures up images of a new generation of young urban professionals happily sipping overpriced lattes, is taking a measured risk with that very image, announcing a major new expansion into 5 very unyuppie-like cities in the nation’s heartland. (
Two chip designers, Taiwan’s MediaTek (Taipei: 2454) and China’s own Spreadtrum (Nasdaq: SPRD) are looking like interesting bets these days, as they seek to profit from burgeoning demand for cheap smartphones in emerging markets like China and India where carriers are trying to boost recently built 3G networks. In fact, MediaTek has always been a specialist at cheap cellphone chips, allowing it to play at the low end of a market otherwise dominated by the likes of Qualcomm (Nasdaq: QCOM) and Texas Instruments (NYSE: TXN). It entered the smartphone market with an Android-based chip earlier this year, and, after landing supply deals with names like Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) is reportedly in talks for another big deal that could see it supply Huawei, another leading cheap smartphone maker. (
Apple (Nasdaq: AAPL) may be able to bully big names like Samsung (Seoul: 005930) by suing them in Western courtrooms over intellectual property (IP) infringement claims, but it may find the tactic more difficult to pursue in China, where it has just lost a major trademark lawsuit to a much smaller Taiwanese player. According to domestic media reports, a court in the southern boomtown of Shenzhen has ruled against Apple, the world’s biggest tech company, in a lawsuit it brought against Proview (HKEx: 334) claiming infringement of its iPad trademark. (
