More questions have to be asked about the government’s solar panels deal with China. Read the BBC today.
A BBC report today details the growing crisis in the manufacture and sale of Chinese solar panels. The news comes when the Malta government has announced with triumph a deal to have China assemble solar panels in Malta.
Greeks bearing gifts, and all that.
Chinese firms emerged as key players in the solar power sector in recent years.
But weak demand and trade rows have resulted in overcapacity, leaving leading firms with huge debts.
According to the Xinhua report, the country’s top 10 solar panel makers have up to 100bn yuan ($16.3bn; £10bn) in debt.
Earlier this year, China’s Suntech Power Holdings, the world’s biggest solar panel maker, defaulted on its debt.
That was followed by a default by LDK Solar Company, the world’s largest producer of solar wafers.
(…)
However, these disputes and falling prices have hurt Chinese firms and even fanned fears over the long term future of some of the companies.
Prompted by these concerns and the rising pollution levels in the country, China has been trying to boost domestic demand for solar panels.
However, the Xinhua report warned that “despite the support policies, China’s bloated photovoltaic industry still faces a grim outlook”.
“Even if the domestic market is expanded, China’s production overcapacity can not be fully digested and some manufacturers must be eliminated, analysts have pointed out, expecting the industry to see drastic eliminations and accelerated integrations in the coming months.”
Link to the full story below.
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http://www.bbc.co.uk/news/business-24327405
What’s with solar panels and Chinese industry? There was a time when the Germans had the best quality on the market. Ikea are now using China’s Hanergy Holding Group Ltd to sell PV cells.
18 panels = Eur 8K roughly
For Eur 6.5K one can purchase a German system with 10 panels.
One wonders what drives the Chinese-product price down.
http://www.reuters.com/article/2013/09/29/ikea-britain-solar-idUSL5N0HN27U20130929
Possibly becasue they are made by people in slave-like work conditions with no worker’s rights.
China is systematically working to undercut, and so destroy, the manufacturing base in the West, thereby putting the Western economy into crisis.
China is the incarnation of the comic-book evil characters who worked out of secret underground quarters to bring about economic collapse, and so then to be able to ‘rule the world’.
In this, China is being actively aided and abetted by Western companies that unashamedly transfer their manufacturing base en bloc to China, there to reap large, but unjust, profits at the expense of Chinese employees who are denied even the most basic of human and workers’ rights, and to the detriment of workers and of the economy in the manufacturers’ home countries.
The solar panel industry in China is not the only one in financial crisis:
http://www.forbes.com/sites/gordonchang/2013/09/22/china-corporates-not-making-debt-payments/
Did you see their attempts at real estate?
Is it true these solar panels create a lot of pollution to produce?
I think this is the right time to establish a PV industry in Malta.
Reading also The Daily Telegraph, there is an article about how over a twenty-year period the 6000 sterling initial investment can be recovered in 10 years and the overall return on this investment is approx. 12% yearly.
This applies to the UK sun availability:in Malta it should be better.
I do not think that this matter is just political but makes good sense and is what we need.
[Daphne – It’s been available for yonks already, Mannix, along with government subsidies to help you invest in PV panels. Hadn’t you noticed? No wonder, then…]
Many people assume that China is an economic superpower that will eventually challenge the US, Japan and Europe (probably doing it already). They forget that China has one overwhelming weakness: it is a dictatorship.
History shows that no dictatorship can ever have a sustainable strong economy.
There is still hope for you Daphne. It appears people DO change, after all: http://www.nytimes.com/2013/09/17/science/dna-double-take.html?pagewanted=1&_r=4&emc=eta1&
[Daphne – You wouldn’t want me to, though, would you, Kevin. Thank you for the link. I enjoyed reading that report.]
Believe me, I would. As matters stand you are utterly useless.
There is a limit how long one can undercut prices to kill competition.
When your competition buys off the under-priced product, the supplier goes bankrupt through subsidising his own product.
China has filled Europe to the brim with subsidised panels.
Thank you very much, China.
We could be facing the death of PV panels, due to suicide by undercutting and dumping.
The consumer wins once, the suppliers lose for good by going bankrupt.
So basically this means that Joseph Muscat wants us to believe that China will save Enemalta from its debts by adding (investing in) a solar panel business at Enemalta that could burden it further with potentially unrecoverable debt…
Quite a strategic move for Enemalta and Malta, that.
As for Enemalta, it is not correct for the government to say that Enemalta is bankrupt because of its debt.
Enemalta has assets to show for its debt.
And it has a favourable equity position. In fact Joseph MOUscat and CONrad Mizzi have said that China has offered up to Euro 200 million for about 35% (here I am quoting Edward ‘Hypothetical Figures’ Zammit Lewis) of that equity.
If China is offering so much money for one-third of the equity of a company which according to Joseph MOUscat is bankrupt, then why should we believe that China will save Enemalta? Who in his right senses would offer that much money to acquire a share in a bankrupt business?
The truth is that Enemalta’s assets are financed mainly by debt and not by its share capital. Joseph MOUscat had other restructuring alternatives to inject cash into Enemalta. He could have increased Enemalta’s capital base (with a strategic partner), thus reducing its debt/equity ratios.
Although MOUscat is proposing that Enemalta will not acquire a new power station, he will still be committing Enemalta to a 20-25 year power purchase contract, which effectively commits Enemalta to major cash outlays for 20 to 25 years. This is a hidden financial commitment in the sense that it will not feature in the financial position of Enemalta, but it is nevertheless a commitment to be honoured over the 20-25 years and failure to honour this commitment will drive Enemalta out of business.
On seeing this “every public officer had a duty to observe the highest standards of behaviour” here http://www.timesofmalta.com/articles/view/20130930/local/opposition-motion-calls-for-appointment-of-commissioner-of-standards-in-public-life.488441, this http://daphnecaruanagalizia.com/2011/11/anglu-farrugia-and-the-filipina-husband-hunter-excellent-you-never-knows-in-life/ came to mind.
Ironic, isn’t it, that Simon Busuttil had to pass the motion on to Anglu Farrugia, out of all people.
We are all forgetting, unfortunately, the big picture. In the ‘glorious’ days of Mintoff, when he was cavorting with the likes of Libya’s Gaddafi, Malta became synonymous with that country. And of course other paladin of democracies, such as North Korea, to mention just a few.
It took Malta all these years to extricate itself from that awful image.
Six months down the line, with a ‘fresh’ Labour government in place, we are going down the same way we went in Mintoff times.
What is it with Labour that they only feel comfortable with dictators and dictatorships?