China Rescues LDK With New Financing 中国拯救赛维LDK举动与未提供不公补贴说法相左
If China was trying to convince the world and the US that it doesn’t unfairly subsidize its solar panel makers, it has a strange way of doing that, as reflected by a recent series of high-profile moves that seem to say just the opposite. In the latest of those moves, Chinese investors — most likely local governments or financial institutions — have purchased a hefty 3 billion yuan, or nearly $500 million, worth of LDK Solar (NYSE: LDK) short-term notes at a meager interest rate of just 6.8 percent. (company announcement) That rate looks like a huge bargain for LDK, which reported a massive $115 million loss in the third quarter and whose other debt issued earlier this year to global investors now trades at about 50 cents on the dollar. Of course all this shows that LDK is able to borrow money at highly favorable rates from the Chinese government or government-backed entities, even as Beijing vehemently denies it unfairly supports to its solar companies amid a US anti-dumping probe that is likely to result in punitive tariffs against Chinese solar cell makers. (previous post) This latest contradiction comes on the heels of other similar gaffs, including wind power equipment maker Ming Yang’s (NYSE: MY) October announcement that Beijing will provide it with up to $5 billion to help finance its sales (previous post); and a top government official’s announcement in November of a new campaign to help developing countries build new solar plants. (previous post) I suspect that these moves from Beijing and local governments are less a deliberate attempt to anger Washington, and more a reflection of the longer term reality that China does strongly support its solar sector and is having a difficult time changing its ways. Regardless of the reasons, Beijing needs to stop this kind of action and even take one or 2 steps in the other direction — for example by letting a weak player like LDK fail — if it wants to ever resolve its solar trade dispute with Washington.
Bottom line: The latest government rescue for LDK underscores China’s ongoing support for its solar sector, undermining Beijing’s claims that it doesn’t provide unfair subsidies to the industry.
Related postings 相关文章:
◙ China Retaliates With Own US Solar Probe 中国启动对美可再生能源补贴调查
◙ Beijing, Yingli Send Mixed Solar Signals 英利和中国政府似乎“背道而驰”
◙ Solar Fight Sees Accusations Flying 中美太阳能纠纷引发口水大战
