Dumping China’s Solar Industry?

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  1. Here is a Storify I built to breakdown the ongoing trade dispute between Chinese solar materials producers and solar materials manufacturers in the US and Europe.  
    For at least the last year, solar panel manufacturers in Europe and the United States have been complaining that Chinese companies are “dumping” solar panels on the European and American markets. What is dumping, what does it mean for the global solar panel industry, and what does it say about China’s economy?

  2. What is dumping?

    Simply put, dumping is selling a good or service below cost (i.e. at a loss).  European companies have been complaining that Chinese companies must be selling their products at a price below what it takes to make them, undercutting European producers and violating international trade agreements.

  3. German Solar Firm Blames Dumping

    Investors dumped shares in Solarworld AG Monday as Europe’s biggest solar-panel maker blamed its increasingly precarious financial positi…
    Wsj

  4. Why would a company dump a product and how are these companies managing it?

    The why is unclear, though the effect is clearly that a producer can take over an entire market in a other country by undercutting local producers and running them out of business.
    European companies are alleging that Chinese solar producers are leveraging generous loans and subsidies from Beijing to keep their companies afloat even as they lose money on the panels they are making.

  5. Who are the companies behind the complaints?

    There are coalitions of companies in both the U.S. and the EU, and both coalitions include a German solar panel firm Solarworld AG.  The company spearheaded the probe into Chinese companies accused of dumping in the European Union, and in the United States.  Solarworld’s stock has fallen 83% in the last year, and the company has had to scale back spending and production.  Other European companies are being affected, and many are saying they simply cannot compete.
    Europe is the world’s market for solar panels which may partly explain why the stakes are so high for European manufacturers.  Nevertheless, demand for solar panels is dropping in Germany, and the German government is reducing subsidies meant to support German manufacturers of panels.

  6. How are Chinese companies responding?

    Chinese companies and trade officials are upset at the probes and the resulting tariffs.  They contend that Chinese companies are not violating international trade agreements and that measures taken by Brussels and Washington have led to a glut of Chinese solar panels.

  7. China hits at EU solar panel dumping probe – FT.com

    Beijing has lashed out at the EU’s decision to launch a trade investigation into Chinese solar panels, calling the anti-dumping probe “re…
    Ft

  8. Chinese companies stand to dominate the global solar power industry?

    No, not at all.  Or, maybe, but not any time soon.
    First of all, much of the world’s polysilica–the materials used to make the wafers that make the panels-is itself made the United States.  Secondly, installation of panels is largely a local industry, and many American companies are actually seeing a surge in new orders for solar panel installations.  The availability of cheap Chinese solar panels actually seems to be fueling a boom in consumption, and many American companies that distribute and install panels are benefitting from increased business due to low import costs.

  9. Cheap Chinese Panels Fuel U.S. Solar Surge

    The solar-power business is expanding quickly in the U.S., though not from panel manufacturing. Instead, growth has come from installatio…
    Wsj
  10. Forbes.com Video Network | Fact And Comment: China Dumping Good For America
    Forbes

    Sun, Oct 21 2012 20:55:33

  11. Regardless of these bright spots, both the United States and the European Commission have begun to place tariffs on imports of Chinese solar panels.
  12. U.S. Sets Anti-Dumping Duties on China Solar Imports

    The U.S. Commerce Department set anti-dumping duties ranging from 18.32 percent to 249.96 percent on solar-energy cells imported from Chi…
    Bloomberg
  13. Chinese Solar-Panel Exporters Face Threat of EU Tariffs

    The European Union threatened to impose tariffs on solar panels from China in the biggest EU trade dispute of its kind, saying producers in Europe may be victims of unfair price undercutting. The EU opened a probe into whether Chinese manufacturers of solar panels sell them in the 27-nation bloc below cost, a practice known as dumping.
    Bloomberg
  14. The campaign by U.S. based solar panel manufacturers (and U.S. subsidiaries of foreign companies) has most recently resulted in tariffs on Chinese solar panels in the United States, ad the threat of tariffs loom over China solar panels in Europe.

  15. Free lunch?

    Beijing does not exactly release financial statements to the U.S. Commerce Department, so it is tough to ascertain the financial value of the loans the government has been handing to Chinese solar companies.  If Chinese solar companies are not making any money–due to falling demand, excess supply, or underselling the product, then this could spell trouble not only for solar panels, but for the Chinese financial apparatus.

  16. Debt Cloud Hangs Over Chinese Solar Industry

    BEIJING-Thanks to the steadfast support of local governments and banks, Chinese solar companies-unlike their Western counterparts-have been able to downplay concerns over mounting debt obligations. But raising the capital needed to turn themselves around may be tougher.
    Wsj
  17. I have more I want to add to this page, but in the meantime, I will end with this article from The Economist on the benefits of cheap solar technology in the developing world.
  18. Lighting the way

    WHICH plastic gadget, fitting neatly in one hand, can most quickly improve the lives of the world’s poorest people? For the past decade the answer has been clear: the mobile phone. But over the next decade it will be the solar-powered lamp, made up of a few light-emitting diodes (LEDs), a solar panel and a small rechargeable battery, encased in a durable plastic shell.
    Economist

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