The last few days have seen an overwhelming flood of new chatter in the war of words between Chinese and Western solar cell makers, with China’s commerce ministry also voicing its views on this case that looks set to become a major battleground in the free trade debate. After US solar firms filed a formal anti-dumping complaint in the US last week against their Chinese rivals, China’s commerce ministry quickly and predictably fired back that the complaint was groundless, and warned that any punitive action could result in a damaging trade war that could hurt the global economy. (English article) At the same time, 3 top Chinese players, Suntech (NYSE: STP), Yingli (NYSE: YGE) and Trina (NYSE: TSL), all chimed in with various guarded statements saying it was too early to worry just yet. Meantime, the group leveling the accusations, led by the US arm of German solar cell maker SolarWorld (Frankfurt: SWV), replied to China’s tough talk with its own scathing statement accusing the Chinese of not only rampant illegal subsidies for its players, but also of allowing them to wreak havoc on the Chinese environment through irresponsible waste disposal practices. (official statement) I said last week that the speed of this conflict’s rapid evolution has surprised me, as China’s generous subsidies have been going on for years. Now I’ll add that the volume of the rhetoric is also surprising me, showing that both sides are taking this case very seriously and could take some equally strong actions if either doesn’t like the final ruling by the US International Trade Commission. The timing of this dispute is clearly very much in favor of the US solar companies, as no US politician, including the Obama administration, will want to look soft on China as the US economy continues to struggle just a year before the 2012 presidential elections. If Beijing is smart, it will quickly tone down its rhetoric and move discussions to back-room channels if it really wants to try to avoid punitive tariffs that now seem almost inevitable. Beijing’s actions in the next few weeks will be critical: a quieter, more conciliatory approach could result in less aggressive action by the US, which in turn would cause China’s solar companies to suffer less. But if China continues its loud rhetoric, this dispute could well turn into a drawn-out war that would seriously harm the long-term prospects of the Chinese players.
Bottom line: The outburst of accusations by China and US solar makers in their dispute over unfair trade could deal a long-term blow to Chinese solar makers unless Beijing moderates its rhetoric.
Related postings 相关文章:
◙ China Solars Brace for Icy 2012 With US Trade Complaint 中国太阳能产业需直面美欧关税壁垒
◙ US Congress Turns Up Heat in China Solar Debate
◙ China Brushes Off Western Protest With New Ming Yang Support 明阳获巨额融资 表明中国不理会西方反对
After a month of tough-talk on Capitol Hill blasting China’s generous subsidies for its solar sector, the inevitable has happened and a group of leading US solar panel makers has filed to have punitive tariffs leveled against their Chinese rivals. The group, led by the US arm of Germany’s SolarWorld (Frankfurt: SWV) has officially petitioned the US International Trade Commission (ITC) to level the punitive tariffs after Chinese solar makers have prospered under years of support from Beijing, which has provided a wide range of incentives like cheap costs for land and low interest loans, to create an industry that now controls more than half the global market. (
After staging a brief rally this week, solar module makers are returning to the defensive posture they have held for most of this year amid new reports that the slump in demand that has led to their worst-ever crisis seems to be accelerating rather than easing. Media are reporting the price of silicon, the main ingredient used to make solar cells, dropped a hefty 5.8 percent on October 10 from just a week earlier, in the latest indication that demand remains weak from an industry that built up massive new capacity during a brief boom under incentives rolled out by Western governments in 2009 during the global financial crisis. (
There aren’t many things that US Republicans and Democrats can agree upon, but one of the few issues that seems to be uniting them in Washington these last few weeks is China bashing. In this particular case, both parties are strongly denouncing Chinese solar energy manufacturers, blaming their strong support from Beijing for an unfair advantage that has bankrupt many US solar panel makers in recent months. (
As if things weren’t bad enough for Chinese solar firms, two new developments are casting clouds over this already struggling sector, one overseas and one at home. Overseas, foreign media are reporting that new solar cells with record efficiency developed by First Solar (Nasdaq: FSLR), one of the last US players still in business following a recent round of bankruptcies, could significantly undermine Chinese rivals. (
According to media reports, US solar panel maker Solyndra could default on a $528 million loan guaranteed by the US government following its recent bankruptcy filing, forcing the government to repay the loan. (
US solar cell makers are showing that their Chinese rivals aren’t the only ones who can count on government support to boost sales, with First Solar (Nasdaq: FSLR) announcing a big new deal with strong backing from Washington. Based in the sun-baked state of Arizona, First Solar said it will provide a hefty 100 megawatts worth of solar modules to India’s Reliance Power, with $85 million in financing for the project’s first phase coming from the policy-driven US Export-Import Bank. (
My headline for this item may be a little misleading, as I’m sitting here having my morning coffee in Shanghai writing it while speculating on what will happen at one of the world’s top solar energy shows that kicks off today in Germany. All the big Chinese names, including Suntech (NYSE: STP), Trina (NYSE: TSL), Yingli (NYSE: YGE) and many others, are attending the show this week in Hamburg, in a rare event that will bring together many of the sector’s top executives in a single place at a single time. (
