Evidence that Chinese solar companies are selling below cost

Surprise!  The Chinese have a hinky economic system.

The reason for the sarcasm is that a US government investigation into the Chinese solar panel industry has found evidence that Chinese manufacturers are selling solar panels for less than the cost to make them, which really hurts their competitors (and them, but they’re getting free money from the Chinese government, so they’re doing well at the moment).  This shouldn’t be much of a surprise to anyone.

For over a decade now, the Chinese government has been making money easily accessible to Chinese manufacturers in the form of low-interest loans.  This has provided many jobs and sparked the Chinese economy into a huge boom, but it’s also allowed the companies to become bloated and inefficient (after all, why bother with efficiency when you can just take out another loan?).  The loans have become essentially free since the Great Recession started, which has made the bloat grow even faster.  This is, if you’re curious, the same situation that Japan was in in the late 80s, just before it fell into its current multi-decade stagnation.

So, yeah.  Not at all surprised that the same thing’s been going on in the solar industry over there.  The only question is what the US (and others) are going to do about it.  This situation leaves China’s competitors with three bad choices: either take advantage of the artificially cheap goods for sale (driving their own solar industries out of business), subsidize their solar industries (which would cost a lot of money), or slap import tariffs on Chinese solar panels, which would very likely start a trade war.  There aren’t really any good responses to this, the way I see it.

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One response to “Evidence that Chinese solar companies are selling below cost

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