Special Report: China’s Control of Global Solar Manufacturing

New York Times (8/24, Bradsher) – China Racing Ahead of U.S. in the Drive to Go Solar: Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said in an interview here that Suntech, to build market share, is selling solar panels on the American market for less than the cost of the materials, assembly and shipping. Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation. As Japanese automakers did decades ago, Chinese solar companies are encouraging their United States executives to join industry trade groups to tamp down anti-Chinese sentiment before it takes root.

The Australian (8/28, Shanahan) – The Sky Falls in on Solar: In its efforts to supplement its energy needs from renewable sources and fulfill its highly ambitious targets to feed in energy to supplement its growing coal-fired and nuclear-powered electricity sources, China has provided lavish subsidies to solar industries. Under these subsidies and ultra-cheap loans from Chinese banks a plethora of Chinese manufacturers has sprung up and flooded the world market with solar cells and panels, which vary remarkably in quality...The problem is that the promises of new green jobs to replace all the old brown jobs lost will be difficult to fulfill while China, for strategic reasons - not environmental sympathy - is prepared to open its bottomless pockets and distort a world market.

New York Times (8/26, Galbraith) – Solar Panels Drop in Price: Until recently, panel makers had been constrained by limited production of polysilicon, which goes into most types of panels. But more factories making the material have opened, as have more plants churning out the panels themselves – especially in China. “A ton of production, mostly Chinese, has come online,” said Chris Whitman, the president of U.S. Solar Finance, which helps arrange bank financing for solar projects. At the same time, once-roaring global demand for solar panels has slowed, particularly in Europe, the largest solar market, where photovoltaic installations are forecast to fall by 26 percent this year compared with 2008…Much of that drop can be attributed to a sharp slowdown in Spain. Faced with high unemployment and an economic crisis, Spain slashed its generous subsidy for the panels last year because it was costing too much. Many experts expect panel prices to fall further, though not by another 40 percent.

San Diego Union Tribune (8/30, Calbreath) - Eating Our Lunch in Solar-Panel Marketplace: The speed with which China has gained a lead position in the market begs the question of whether the United States can ever regain its manufacturing edge. The moment we make a stab at producing a new technology – whether it's microchips, computers, electronic toys or, now, solar panels – it's only a matter of time before production shifts overseas. But even if Chinese factory openings in the United States assuage some ruffled feathers, it would do little to even the playing field between America and other low-cost areas, whether China, Mexico, Malaysia or the Philippines. If Obama really wants to build a 21st-century work force, he has to find ways of solving the pernicious effects of artificially low currencies, weak labor standards and lax environmental laws.

New York Times (8/31, Bradsher) – China Tightens Grip on Rare Minerals: China is set to tighten its hammerlock on the market for some of the world’s most obscure but valuable minerals. China currently accounts for 93 percent of production of so-called rare earth elements...China produces over 99 percent of dysprosium and terbium and 95 percent of neodymium. These are vital to many green energy technologies, including high-strength, lightweight magnets used in wind turbines, as well as military applications. Beijing officials are forcing global manufacturers to move factories to China by limiting the availability of rare earths outside China. “Rare earth usage in China will be increasingly greater than exports,” said Zhang Peichen, the deputy director of the government-linked Baotou Rare Earth Research Institute...China is increasingly manufacturing high-performance electric motors, not just the magnets. “The people who are making these products outside China are at a huge disadvantage, and that is why more and more of that manufacturing is moving to China" Mr. Kingsnorth said.

Reuters (8/27, Walet) – Ban on Scrap Polysilicon to Boost China Solar Sector: A Chinese ban on imports of a waste material used for solar wafers may be bad news for foreign competitors but it is a big boost to China's solar sector. Scrap polysilicon, which can be reused to make solar wafers, is low-grade silicon that fails to meet the grade for chips found in most electronics. Beginning this month, China stopped accepting scrap polysilicon to comply with environmental regulations.

EurActiv (8/26) – German Industry Warns of 'Raw Materials Gap': Germany faces a commodity supply gap partly because trade distortions promoted exports of raw materials from Europe such as scrap metal, [Ulrich Grillo, Chairman, of] the association of German industry BDI said...China alone restricted trade with raw materials and semi-finished products with some 373 export duties…These especially distorted supplies of copper and the metal neodymium, used for laser equipment. China planned to refund value added tax on imports of scrap metal from 2010, he said. When China made such refunds in the past, they had a "vacuum cleaner impact on the scrap market and sucked the world scrap metal market empty". "The central problem is the boundary between waste and usable products." Under half of automobiles sent for scrap in Germany were recycled into metal, he said. He estimated that 40% of German automobiles sent for scrap were sent abroad without notification as exports.