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Solar Panel Trade War Heats Up
Hugh Pickens writes "Reuters reports that Chinese solar companies could soon find themselves bereft of some of their biggest foreign markets as Western manufacturers intensify a solar trade war and seek stiff anti-dumping duties on low-cost Chinese products. German group SolarWorld says it is working on steps to curb alleged price dumping by Chinese rivals in Europe as a group of seven U.S. solar companies urges the U.S. government to slap anti-dumping duties on Chinese-made solar energy products. Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices. 'American solar operations should be rapidly expanding to keep pace with the skyrocketing demand for these products,' says Senator Ron Wyden of Oregon whose office authored a whitepaper called 'China's Grab for Green Jobs.' (PDF) 'But that is not what has been happening. There seems to be one primary explanation for this; that is, that China is cheating.'"
And China was cheating no doubt with making cheap Reeboks and Nike's and stuff for US multinationals... Oh yeah, sorry, forgot. Those were US owned Multinationals getting all the profit then.
I guess the difference between dumping and competing is whether you're ripping off the consumer and greedy multinational corporations are soaking up all those tax-free dollars or not.
We are all producers and consumers. As producers we want our products to be rare and expensive. As consumers we want our products to be plentiful and cheap. You have to decide what type of world you want to live in. One that has plenty of inexpensive things or a few expensive things. I'll take cheap and plentiful.
Let's say the Chinese decided that the US was too dependent on foreign oil and as a buddy they wanted to supply us with free solar panels. As much as they could make. Would this be a good thing or bad thing? For consumers it would be great but for producers of solar panels it would be terrible. To have progress as a society you have to let consumers rule.
I love Jesus, except for his foreign policy.
I thought "the invisible hand of the market" was supposed to make things work. How does "cheating" occur? Can somebody explain to me what "cheating" means in this context?
Isn't this an element of the free market (if one supplier decides it is worth subsidising their product to build market share, or pay its workers less)? Or does the "free market" assume no government intervention - which I can't see ever being the case, there have been "governments" as long as there have been markets, at least for the last 5000 years anyway, no period in that time where there haven't been governments in existence somewhere in the world (and therefore affecting markets).
If this is "cheating" , could somebody point me to the guidebook that tells me what is considered fair and what is considered cheating in the world of free markets, and crucially, who enforces the guidebook of rules?
I might be naive, and please educate me here, but I would have assumed this behaviour is part of markets and how they work, rather than external to markets (therefore considered not playing the game properly). Hence not cheating, but just part of what happens?
thanks! (really must do an economics course sometime, it's all very confusing to me).
Price dumping is selling stuff below the price it took to manufacture. But that's not the case. The price is that low - though only because the Chinese are not capturing and recycling their toxic waste and dump it into the environment instead.
The higher price in Europe is not down to "excessive" environmental regulation, but a matter of basic environmental protection. Of course, this doesn't stop European greenies from feeling smug for having Chinese solar cells on their roofs - so long as the pollution is not in their backyards. (Never mind that their cells would have been a lot more expensive had they been produced in a more reasonable way.)
No, the primary explanation is that the US is hostile business, with excessive health and safety and environmental regulations and an insanely high minimum wage. Want to compete with China and get American industry back on track? Repeal regulations and bring salaries below $6/hour.
Great idea! Then the workers can be kept in factory dormitories and piss in holes in the floor like they do in Chinese factories!
"Great idea! Then the workers can be kept in factory dormitories and piss in holes in the floor like they do in Chinese factories!"
Which is pretty much what OWS is doing now.
I love Jesus, except for his foreign policy.
The US government gave, what $500 million dollars to Solyndra to produce solar panels.
why is it different when the Chinese government subsidises solar panel companies?
Pretty straightforward. Let's buy all the Chinese PV manufactured in 2012 *and* all tUSA PV manufactured in 2012. Do that, and, we'll:
* support tUSA businesses by buying their PV
* get a whole bunch of additional PV at firesale prices, helping consumers lock in to lower long term energy prices, helping utilities comply with upcoming EPA policies, helping clean our air and water by reducing the amount of coal and natural gas we burn for electricity, and BTW creating bunches of jobs selling, shipping, installing, and maintaining the PV.
As an added bonus, if China really is dumping due to government subsidies, we get a wealth transfer from China to tUSA in the process, and $deity knows we could use some of that.
P.S. This is slashdot, so nuclear has to work its way into the conversation. Based on both 20th and 21st century experience, PV generated electricity is actually cheaper on a long term total cost than nuclear generated electricity. That's not to say that we shouldn't have nuclear, but rather that since we are operating coal and gas plants during sunny portions of the day, there's plenty of room to install PV without taking away room to install more nuclear.
Support a few technologists in Washington.
And solor panels based on Polysilicon that last 50+ years not ones based on thin-film that last only 7 years.
I'll take cheap and plentiful.
So long as by cheap you mean poor quality. Because if that is what you mean, then china sounds to have met your expectation.
Personally, I'll take decent quality and plentiful.
And are only just starting after 40 years to wake up to the fact that the enemy is over here not there, and usually has the title "leader".
Example:
http://www.opensecrets.org/pres08/contrib.php?cid=N00009638
Guess that 1 million has been paid back several hundred thousand times.
Deleted
1. Outsource 90% of manufacturing to China
2. Start a trade war with China
3. ???
4. Profit?
Seven puppies were harmed during the making of this post.
If they are excessive... How come Germany and the rest of Norther Europe is doing so damn well?
One of the secrets is the universal health care and other social programs, which in fact reduce the overall cost of employment in society by making employees more efficient and cutting out parasites like health insurance companies. (Healthcare cost is 6-8% versus 17% in the US, and there's no 'insurance' companies taking 30% cut in pure profits out of healthcare spending)
Not really - I mean what does America produce that China needs? This is not a trade war as much as trade suicide.
Seven puppies were harmed during the making of this post.
Environmental regulation is a favorite whipping boy of the "pro-business" crowd; but how can slashing restrictions on my ability to impose externalities by chemical means(some irksome, some lethal) on you in the pursuit of profit possibly be justified either ethically or from a 'sanctity of private property' stance?
Other than being done by respectable guys in suits, rather than unlikeable scum, polluting for profit is the approximate ethical and economic equivalent of picking pockets for profit: somebody ends up with a tidy black balance sheet to show for it; but they leave a whole lot of people in the red, without even the pretense of their consent.
It's their bafflingly unwavering support for such policies that makes me suspect most "libertarians" of being nothing more than corporatist shills. Step one to defending "Life, Liberty, and Property" is not, in fact, giving others the right to emit whatever exotic nasties they find profitable to dispose of into your body and/or property...
Unlike the maze of bullshit that is the US financial system, the Chinese appear to be engaging in actual beneficial capitalism. Instead of subsidizing banks and petro-warfare, their government subsidizes the manufacture of distributed, individual-scale, liberating technologies that are mostly produced for export, benefiting consumers in the US and around the world. Look at what the Chinese produce: affordable solar energy, small-scale agricultural equipment, bicycles. Compare that to what the US produces: large-scale strip-mining equipment, large-scale industrial-farming equipment, gas-guzzling trucks and SUVs. When US consumers inevitably use imported individual-scale technologies to escape our own system of corporate-dominated, crony-capitalist citizenship-slavery, the banks and corporations at the center of the US control grid lose their grip and send an army of lobbyists to DC in order to draft favorable legislation and bail-outs in an attempt to maintain their coercive, dominant position.
And I'm not just being hyperbolic. The American consumer needs to wake up and realize that it is literally a control grid, maintained through government-sanctioned force and fraud. Banks and the FED, through derivative contracts and control of the mortgage and municipal bond markets, use a maze of 600 trillion dollars worth of fraudulent debt to herd Americans into city/slums where they can be fleeced of all capital and resources by coercive corporate monopolies maintained through regulatory arbitrage. From there, it's into permanent wage-slavery, prisons or the military where economic dependence is used as the excuse to liquidate human and civil rights. Corporations, banks and bureaucrats profit every step of the way.
This is the reason we see, for example in the Senate's proposed currency tariff bill, instead of flat-rate, across-the-board tariffs that address actual currency manipulation while respecting free trade, targeted tariffs designed to protect individual companies proportional to their ability to fleece American consumers. The current design of tariffs according to the US ruling elite, instead of protecting Americans from unfair trade as intended, is to protect US corporations by leading American consumers to slaughter either in the figurative economic sense or, when that fails, in the literal "perpetrating false-flag terror and sending them to die in some fraudulent war" sense.
Frankly the Chinese should complain that our trillion-dollar subsidies of petro-warfare is hurting sales of their solar panels.
"I assumed blithely that there were no elves out there in the darkness"
The companies start whining for daddy gubment to fix the game for them.
The biggest problem is that a LOT of china solar panels are the thin film crap that will not last more than 5 years and loses 1/2 it's output within 2 years. But there are killer prices for monocrystaline panels that will last you 50 years that makes the greedy US companies whine.
The repubs who CLAIM they are for Capitolisim and small government will back a bill to stop affordable solar from flowing in from china.
Do not look at laser with remaining good eye.
Thanks for your measured response. So my naive response would be: are there ever any examples of large scale free markets? Surely at any level of international trade, there are government rules to be followed, and national political agendas to be negotiated with, so there is no such thing as a free market, nor has there ever been? All the way through recorded history local and national authorities have influenced trade either informally or formally, whether through tax breaks and surcharges for different parties, or informally through just making it difficult for some people to trade and easier for others to move and sell their goods?
I can imagine there are examples at a very local level of truly free markets, e.g. something like ebay in one country, where I can pick and choose which second hand iphone I want to buy, and sellers have to compete fairly equally, or farmers at a vegetable market all selling similar goods, but as soon as you hit national boundaries surely government interventions will always be a factor? Even if it's indirectly, such as when a country's government might insist producers in their country pay their workers a minimum wage, and so make the prices of goods produced there more expensive than thoe same goods produced in another country where there is no minimum wage (or a lower one)?
cheers.
what does America produce that China needs?
Raw materials, agricultural commodities, geopolitical stability.
"I assumed blithely that there were no elves out there in the darkness"
Dollars. Someone has to pay for all the stuff China manufactures. If the US will not buy the stuff there will be massive unemployment in China.
On May 2nd, 1933, the day after Labor day, Nazi groups occupied union halls and labor leaders were arrested. Trade Unions were outlawed by Adolf Hitler, while collective bargaining and the right to strike was abolished.
Lenin, at the behest of Stalin and Trotsky, banned trade unions in favor of "total government union." Stalin followed this up by increasingly draconian laws that docked a worker 25% of a day's pay for being a mere 20 minutes late to work, and imposed prison sentences for anyone who attempted to quit their assigned job.
Chairman Mao eliminated trade unions, in a move very reminiscent of Stalin. More recently, China created the "All China Federation of Trade Unions", a front organization whose primary purpose is to serve as an enforcement arm of the Chinese Communist Party. No actual trade unions or labor bargaining are allowed to exist.
In 2011, in multiple states in the US, the Republican Party... abolished unions.
American companies that are used to charging ridiculous prices for solar equipment are upset that someone else is starting to produce the items cheaper and thus out-compete them, so they want the government to step in and protect them.
Liberty in your lifetime
Well stated. Wish I had the modpoints, I'd give you one.
Hey, keep your damn logic out of this, universal health care and social programs will turn any country into the USSR and you know it!
"When information is power, privacy is freedom" - Jah-Wren Ryel
> what does America produce that China needs?
Needs or wants?
For example, America produces wheat at a much lower cost than China. But China has explicit policies in place to raise the domestic price of wheat to the point where consumers don't buy more of it than they can produce domestically. This sort of sucks for Chinese consumers, obviously, but who cares if people are getting enough food....
More to the point of your question, what America has that China needs right this second is consumers. A trade war does mean higher prices on manufactures goods for US consumers; it also means higher unemployment in China. And higher unemployment and the ensuing political instability is something the Chinese government desperately doesn't want. This is why they've been doing everything they can to export their unemployment to the rest of the world (which is what their currency operations and general economic policy is all about). This does involve repressing domestic demand, unfortunately, which leaves them even more dependent on exports and foreign demand to keep people employed...
So far the US has been allowing higher unemployment here in exchange for cheaper products. This works so long as the unemployment rate doesn't get too high so people vote more for cheap stuff than for more jobs. Whether we've gotten to "too high" yet is unclear.
agricultural commodities
According to the USDA, China only imports around 20% of its agricultural needs from the US. Certainly not a deal-breaker if they do without or buy it elsewhere for a bit more money.
As for raw materials the main ones - oil (middle east, indonesia, canada), copper (indonesia/australia), nickel (canada/australia), iron ore (brazil) are not produced in the US. You know that when the trade deficit is negative like in the US, this means that the US does not even produce enough for its own consumption, let alone for foreign demand.
geopolitical stability
Are you serious? America produces geopolitical stability? ROFL. Ok just ignore me, you simply won't ever understand.
Seven puppies were harmed during the making of this post.
Agreed. Now when you print more dollars and devalue the currency, how does this affect the perception of the dollar and the demand for the dollar? What will the US do when China simply decides it doesn't want dollars anymore? I mean, you can't force them to accept dollars. What happens when they want to be paid in gold? Or Japanese Yen? Or Swiss Francs?
Seven puppies were harmed during the making of this post.
I don't know about photovoltaic, but with evacuated-tube solar collectors, the cheap ones from china are basic the lowest-quality most inefficient ones in the world, by a wide margin. (China also makes some of the best, but those are priced accordingly.)
It's ok for the U.S. to cheat on corn, but not for China to cheat on Solar Panels. When did our country become such a fuckin pansy? Let's grow back our balls and compete with whatever the world throws at us. I'm fuckin up for it, are you?
subsidies for alternative energy in China = cash to the manufacturers
subsidies for alternative energy in US = loan guarantees to the manufacturers, tax or cash rebates to the consumers
Agriculture = subsidies for not overproducing, and government guaranteed minimum prices.
Textiles = who makes textiles in the US anymore?
In 2011, in multiple states in the US, the Republican Party... abolished unions.
Wrong.
Unions for government workers had many of their bargaining rights restricted or eliminated. Not private sector Unions.
Public sector (government employee) Unions are an abomination. Their purpose is not to share in profits, as government makes no profits. It's to grab all the tax money they can and influence lawmakers to pass laws to increase their power.
The government employee Unions "negotiate" for higher wages & benefits, paid for by taxpayers, not the profits of a private business, with one political Party (who don't themselves feel the pain of a bad deal for the taxpayers), and then the Union takes money from Union members as Union dues and contributes a large portion right back to the election campaigns and PACs of that same Party.
It's an incestuous and corrupt system that robs taxpayers blind and funnels money into one political Party's coffers, while ensuring lawmakers pass laws favorable to increasing the Union's power and wealth.
Even FDR said public sector unions were bad. The founders of the labor movement viewed unions as a vehicle to get workers more of the profits they help create. Government workers, however, don't generate profits. They merely negotiate for more tax money. When government unions strike, they strike against taxpayers. F.D.R. considered this "unthinkable and intolerable."
Government collective bargaining means voters do not have the final say on public policy. Instead, their elected representatives must negotiate spending and policy decisions with unions. That is not exactly democratic...a fact that unions once recognized.
Strat
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
To correct you, Germany healcare is 10.7%, UK is 8%, Switzerland is 11.6% and those numbers are from the various governments for what they spent in 2008.
Health care and insurance costs add around 21%. Of that around 85% is given to managing the complex private health insurance by private companies. So private insurance companies get 85% of 21% not 30% as you made up.
China has a massive advantage, cheap labor. Even though more of China's population has jobs, wages have not changed and there is still a very large number of people it can add to the work force. As long as China can keep wages low they will not become sufficient enough consumers to benefit trade partners. The WTO needs to agree on minimum wages. Without developing consumers, China will continue to absorb the wold economy without any benefit to world trade.
Having to work for a living is the root of all evil.
What, did some teacher run over your dog on the way to a union meeting when you were five?
People like you are the reason we have unions in the first place. Unneeded in the public sector? Because postal workers should roll over and accept 100,000+ in job cuts to cover a fiscal hole created by Congress, when they mandated that the Post Office fully fund pensions for the next 75 years - meaning people who haven't even been born yet? PATCO - one of their main goals of the strike was to get a shorter work week to maintain the intense levels of concentration needed to keep planes from flying into eachother.
Instead, Reagan fired all the traffic controllers, and now you have them dozing off on their shifts because they might only have a couple hours off between shifts.
As opposed to your citation-free numbers?
$6/hour? They should work for free and be lucky they get food! Now get to work, slave!
Or, bring the cost of living down. I know, it's rhetorical. But consider that the primary reason our salaries are high is because of our cost of living. Whether it is possible to reduce the cost of living, that is an open question. But if it were to happen, hypothetical as it might be, we would be more competitive. Furthermore, lower cost of living does not necessarily imply lowered quality of living.
"Government collective bargaining means voters do not have the final say on public policy. Instead, their elected representatives must negotiate spending and policy decisions with unions. That is not exactly democratic...a fact that unions once recognized."
Wrong.
Union members are also citizens and voters, just because you don't like that these voters banded together to protect their interests does not make them an "abomination". Union members vote for leaders who bargain on their behalf. So you meant to say some (non-union affiliated) voters do not have say on some parts of public policy (related to Union members benefits or other business). I, as a citizen and a voter, don't have any say whatsoever in how the military pays its members or how their retirement is handled. In either case the only way to have a say is to vote for politicians who will change legislation. How are unions any different?
If you don't allow official Public Sector Unions, who in WI do NOT have the right to strike, then you cannot stop unofficial unions or strikes.
Why?
Because in the US you have a constitutional right to freedom of association.
Also slavery is illegal.
Hence, if a group of people refuse to work until their demands are met there is nothing you can do to stop them.
You can fire them, or do whatever is allowed under any individual employment contract you have with them.
But if there is no Union and no Union agreement you can't stop a strike, you can't FORCE THEM TO WORK.
We do not have slaves in the country.
If some group of people want to band together you can't stop them. It is the basis of freedom itself.
The founders of the labor movement viewed unions as a vehicle to get workers more of the profits they help create.
I not sure which "founders" you are referring to, but I don't think their views (or FDR for that matter) are relevant here. Would you argue against collective bargaining in the old USSR because everybody worked for the government and there were no profits?
Even in private sector strikes, profits and wages aren't always the most important thing. Workplace safety, work rules (bathroom breaks, etc..) and the ability of workers to do the job right with the proper resources are often the major source of conflict. So it's both inaccurate and offensive to throw things out like:
"It's to grab all the tax money they can and influence lawmakers to pass laws to increase their power."
Sure, virtually everybody wants more money and influencing lawmakers is a problem. However it is a general problem, and something business and other interest groups do all the time.
Government collective bargaining means voters do not have the final say on public policy.
Voters don't have the final say anywhere, hell, they hardly have any input at all. Besides even in a dictatorship there are limits to what people can take. If voters decided that all public sector workers should work for free, a refusal to accept this by public sector unions is a bad thing?
"Public sector (government employee) Unions are an abomination."
And in the words of Steve Jobs:
"what is wrong with our schools in this nation is that they have become unionized in the worst possible way. This unionization and lifetime employment of K-12 teachers is off-the-charts crazy."
"What kind of person could you get to run a small business if you told them that when they came in, they couldn't get rid of people that they thought weren't any good? Not really great ones, because if you're really smart, you go, 'I can't win.' "
The real scandal is that every government in the world is NOT hugely subsidising the production of cheap solar panels. If we all produced our own power though, who would have the power?
Korma: Good
The argument is bogus because rare earths aren't all that rare and could be and were mined in the US and elsewhere when there was an incentive to do so. US corporate CEO's were more than happy to see the Chinese take over production and US production cease as long as it permitted the cost savings to be siphoned off in large part into their own pockets. The fact that the Chinese were smart enough to be happy to comply makes them the problem?
Our problem is that that whatever you think of the Chinese system, they at least have the sense to have a government and industries that actually set out long term plans, usually 5 years or more, to steer their economies toward improvement, whereas we have evolved a system that spends roughly 10% of its entire output trying to rig the political and governmental system to reward a few at the expense of the many. Perhaps, with so many Chinese their politicians can't afford such luxury.
Likewise the entire Solyndra controversy is bogus. We need a long term, 25 year plan to subsidize solar power. Even if there are a hundred Solyndra's along the way, in the end we may actually be able to keep pace with the Chinese and others who are determined to attain leadership in the economies of solar power production one way or the other. During the race to the moon, did the US stop trying when its first rockets proved costly disasters? Why should we be so eager to do so now?
When you consider that future of humanity almost certainly depends on someone succeeding in this effort to get the global economies off fossil fuels as fast as possible, perhaps we should be thanking the Chinese for their contribution rather than complaining about them. Regardless of what country you are from, the gold medal should be given to the one who runs the best and fastest race. It should not be granted because of corporate political corruption and cronyism, which is what is really killing the solar industry in the West. If the Chinese are wise enough to provide their runners with better running shoes, why can we not learn to do likewise?
Thin film crap or not, what the Chinese are doing is moving the world off fossil fuels sooner than it other wise would do so, if left to the wishes of the fossil fuels industry.
I would think paying for a few hundred Solyndra's would still be a bargain if we win the race in solar energy production. Loosing many costly rockets that were more expensive than what we lost in the Solyndra fiasco (remember the lost dollars still did stay and circulate in our economy) and a small price to pay that didn't prevent the US from ultimately winning the first leg of the space race. Why should we let a small setback like Solyndra stop us from getting out of the leadership game?
As a taxpayer and one who suffers daily from the pollution of fossil fuels, I say subsidize solar power heavily until the entire economy runs on solar power. Maybe in the process we can preserve what little of a manufacturing base we have left rather than handing China yet one more industry upon which the future will depend.
>>In 2011, in multiple states in the US, the Republican Party... abolished unions.
No. They attempted to curtail the power of government unions, not unions in private industries.
You can read FDR's excellent treatise over why government unions are immoral here: http://www.presidency.ucsb.edu/ws/?pid=15445#axzz1bjLjmwma
FDR. Not Herman Cain.
Basically, when you have the same people in power on both sides of a negotiating table, then the people that lose aren't the people at the table, but the taxpayers. In other words, it's a conspiracy by the government, for the government, against the people.
what?
If that is "not exactly democratic", then our entire government is not exactly democratic. Are you implying there needs to be a dissolution of the entire constitutional system since it is "not exactly democratic", just as you are implying that collective bargaining deserves to be abolished?
Voters do not have a final say on public policy to begin with, they have something much more like an initial say. When was the last time you voted on how much a member of cabinet should make? Have you voted on how much your local public school's janitors should be paid? Town clerks? You don't vote on any of this directly, you vote on people to do it for you so that you can live your life. Even in the most direct of these situations, you would probably vote on a very local town or city budget, which you would then delegate to someone else to implement.
Implying that it should be abolished because it's not democratic is entirely wrong, because it is very democratic.
What points? What facts? All you did was run around with your hair on fire yelling about communists in the State Department, I mean the evils of public-sector unions. Whereas I pointed to two current examples of how public-sector unions are actually needed.
LOL. "Fiscal conservatives" run for office on the notion that government doesn't work, then do their damndest to prove that notion correct. It was Reagan that fired the air traffic controllers, and it was a Republican Congress that passed a law requiring the Post Office to fully fund pensions for people that aren't even born yet - a requirement that's applied to no other state entity or business.
You do realize that your beliefs are hollow when you can't defend them with anything more than lazy hand waving, right?