When it comes to China, which side is Germany on? [Guardian] #RisingChina #Germany

China and Germany teach each other lessons on contemporary influence without brandishing hard power.

On the ground, however – In a 25-country poll by the BBC (44-page PDF) published in May 2013, German opinion on China was 13% positive vs 67% negative in 2013, a marked drop – from 42% positive vs 47% negative in 2012.

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When it comes to China, which side is Germany on?
Berlin’s ‘special relationship’ with Beijing means it is not keen for the EU to start a commercial war with the Asian giant
Source – The Guardian, published September 12, 2013

Angela Merkel is escorted by President Xi Jinping of China after their meeting at the G20 summit this month. Photograph: Kevin Lamarque/Reuters

A long-running dispute between the EU and China over the prosaic, but economically significant, matter of solar panels has thrown up a fundamental question: which side is Germany on? The trade war concerned billions of pounds of Chinese panels that Europe suspected were being heavily subsidised and then “dumped” on the European market. Germany led the opposition to taking punitive action against the Chinese.

“What is certain is that the Germans have taken up almost word for word the rhetoric of the Chinese trade ministry,” said a European diplomat from one of the countries in favour of imposing sanctions on China.

There’s a paradox at play here: it is German manufacturers who wanted the European commission to look into the solar panel issue. But for the German leadership there are bigger matters to consider, not least the country’s burgeoning “special relationship” with the Asian powerhouse.

Please click here to read the entire article at the Guardian.

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China solar panel duties imposed by EU [BBC] #RisingChina #Solar #TradeWar

A free market on whose terms – is this really a fruitful solution or does it simply carve out more finely the edges to the us and them narrative.

This kills off a Chinese pet project in one flex of foreign and economic policy, one the Chinese state has been happy to fund and use as the spear tip in their economic incursions abroad.

They thought wrong about what the world wanted.

In their minds, value and efficiency were probably paramount, thinning margins no barrier to demands from markets in the West. Famously, only one dollar goes out if every Levi’s jeans made goes to the worker, and little more to the factory.

The authors of the free market are not prepared to truly shake its center and make it competitive globally. it seems demarcation by regionalism is the new cool in the semantic range of what free means. Of course it pleases business as it restores margins designed to feed an expected and established standard of living.

The Chinese now know there is divergence in consensus across the notion of global village, despite economic interdependence as a big player in global production networks – – – what free market means to them is little more than subtext to hypocrisy now. Despite bailing out Europe more than once and financing growth by sheer Chinese demand in so many areas, this is their reply.

In one act of posturing, the West gains an upper hand as it nips away at the supply carts of the Chinese green technology vanguard.

One thing is for sure as to what the Chinese will not do. Especially in this day and age.

They will react.

But, it is easy to hide intent behind words. Some taunting outside the walls of the foe’s gates will probably suffice now.

For more, see…

The US and the EU are clearly redefining their economic strategy, trying to defend their energy companies from Chinese competition. But some European partners seem uncertain what to do.

Germany won’t accept losing significant trade with China, and even Washington’s closest European ally, Britain, is worried about the consequences of these possible measures against China.

The EU Commission doesn’t seem to be really interested in the first two aims of renewable sources, environmental protection and energy diversification, but just willing to boycott Chinese production through an alliance with US. All these point to an old question: Is the “free market” really free?

Sino-EU solar trade war is lose-lose choice By Andrea Fais
Global Times OP-ED , June 4, 2013

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China solar panel duties imposed by EU
Andrew Walker
Source – BBC, published 4 June 2013

Analysis

BBC World Service Economics correspondent
How likely is a trade war? China is certainly angry about the tariffs and there is a lot of trade at stake – 21bn euros worth in 2011, according to the European Commission. But anti-dumping actions are an everyday feature of the global trade landscape. There has been an average of more than 200 a year. They are perfectly legal under World Trade Organisation (WTO) rules, provided they follow the WTO’s procedures. Indeed China is a fairly big user of anti-dumping actions itself. The European Commission’s plan to start the anti-dumping duty tariff relatively low, and then increase it later, looks like a negotiating tactic. If the Chinese firms were prepared to undertake to charge a sufficiently higher price, the Commission could accept that. The duties are provisional at this stage and they could be removed if the EU countries decide to do so in December. That is a possibility. So the heat is on now, but there are still opportunities to extinguish the trade fires.

Andrew Walker

The anti-dumping case is the biggest undertaken by the European Commission

The European Commission has announced it is imposing temporary anti-dumping levies on Chinese solar panel imports.

It comes despite opposition from Germany and other European Union members, and amid fears it could spark a trade war.

Please click here to read the full article at the BBC website.

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How Chinese Subsidies Changed the World [Harvard Business Review] #RisingChina #Solar #GovernmentSubsidies

Unfair or unacceptable paradigm? China finances its economic reach to extend its soft power. It is perhaps, simply, a more synergistic strategy between state and its business sector.

Chinese solar products I use have proven ruggen and hardy, down to the little solar toys.

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How Chinese Subsidies Changed the World
by Usha C.V. Haley and George T. Haley |
Harvard Business Review, published April 25, 2013

Last week, LDK Solar, a struggling Chinese manufacturer of solar wafers and panels, announced that it had missed $24 million in bond payments. This news followed the bankruptcy in March of Wuxi Suntech, the main operating subsidiary of the world’s largest maker of solar panels, after it defaulted on a $541 million bond payment.

It is no coincidence that this upheaval in the Chinese solar industry is occurring at a time when the central government’s subsidies that had financed the industry’s explosive expansion have declined even as problems in the global solar-panel market have soared.

Since 2008, through government subsidies, the manufacturing capacity of China’s solar-panel industry grew tenfold, leading to a vast global oversupply. A surge in exports of Chinese panels depressed world prices by 75%. In 2012, China’s top six solar companies had debt ratios of over 80%. Our research showed that without subsidies, these companies would be bankrupt. If the Chinese government sticks to its decision to stop funding unprofitable solar-panel manufacturers and support a revamping of the industry, more bankruptcies and restructurings are sure to follow.

Please click here to read the full article at the Harvard Business Review.

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Suntech’s bankruptcy: Beyond Profit [Economist Blogs] #ChinaSolar

The Economist on the harsh environment overarching China’s plans for solar power eminence.

For a strong Chinese view from Xinhua:

Globally speaking, new energy is closely related to the welfare of mankind. China has already become a leader in new energy development and will contribute even more in the future. To that end, it would be prudent for all the world’s countries to refrain from engaging in trade wars and protectionism targeting new energy products.

See: Suntech bankruptcy hurts new energy drive in Xinhua, March 21, 2013

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Suntech’s bankruptcy
Beyond Profit
by V.V.V.
Source – The Economist, published March 21, 2013

Photo source – AFP

BP, an oil giant formerly known as British Petroleum, ran an ill-fated marketing campaign some years ago proclaiming itself “Beyond Petroleum”. The idea was to trumpet its big investments in renewable energy, especially its brief position as one of the world’s biggest manufacturers of solar panels. That effort came to be seen as greenwash as punters realised that the company’s dabbling in greenery did not take away its zeal to produce—and alas, it turned out, recklessly spill—gargantuan quantities of the mucky black goop that has always been the main source of its profits.

Not long after that, Suntech, a Chinese solar-panel manufacturer, skyrocketed to the top of the world solar industry. So stratospheric was the rise in the firm’s valuation after it went public in 2005 that Shi Zhengrong, its founder, was briefly China’s richest man. At the peak of his wealth and his company’s prospects, he grandly even declared his ambition for Suntech to become as big as BP.

As a clean-energy company, Suntech at least had the chance to fulfil BP’s misleading promise of going beyond petroleum. Alas, Suntech has instead ended up beyond profit.

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