Sun, Jun 16, 2013 - Page 13 News List

China to aid solar firms by boosting local demand

Bloomberg

China, the world’s biggest maker of solar panels, is to boost domestic demand for solar-generated electricity and provide easier financing to manufacturers as rising trade tensions slow exports.

Grid companies should build networks that will be operational in sync with solar-generation projects and give priority access to their produced power, while lenders need to help panel makers raise capital, according to a statement on the central government’s Web site on Friday after a State Council meeting.

Authorities are also to implement 10 steps to cut air pollution, including curbing dirty projects and making local governments more accountable for environmental management.

China’s solar panel industry, which supplies more than half the world market, is unprofitable amid a global glut and slower economic growth that has cut demand. The EU this month imposed provisional tariffs of 11.8 percent on imports of solar panels from Chinese companies after an investigation found they were being sold in the 27-nation bloc at less than their production cost.

“We must support the solar-panel industry overcoming difficulties and pursuing healthy development,” according to the statement from the State Council, Chinese Premier Li Keqiang’s (李克強) Cabinet.

“While solidifying competitiveness in the global market, we need to stimulate effective domestic demand for solar power, and spur innovation and advancement,” it said.

The government will encourage mergers and acquisitions among solar companies and curb blind expansion, the State Council said.

LDK Solar Co (江西賽維), the world’s second-biggest wafer maker, said in April that it was seeking a new loan facility of about 2 billion yuan (US$326 million) from local banks. With debt of US$2.9 billion and eight straight quarterly losses, it failed to fully repay US$23.8 million in bonds due on April 15. The biggest unit of Suntech Power Holdings Co (尚德電力) went into bankruptcy in March after it defaulted on US$541 million of bonds.

Suntech’s default sparked concern that other Chinese solar companies may have trouble repaying debt and will make financing “more difficult” for other producers, Xie Jian (謝健), chief operating officer of JA Solar Holdings Co (晶澳太陽能), China’s largest solar-cell maker, said in an interview on March 21.

The EU anti-dumping levy is scheduled to rise to 47.6 percent for about 130 producers and as high as 67.9 percent in August, should Chinese and EU officials fail to resolve the dispute.

Li said on Friday that trade protectionism is a “blind alley” and called for cooperation and free trade to help bolster a global economic recovery, the Xinhua news agency said, citing comments he made at a meeting with World Economic Forum chairman Klaus Schwab.

In its statement, the State Council said it would take “tough measures for tough tasks” as it steps up efforts to curb air pollution.

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