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View Diary: Solyndra: collateral damage in a trade war. (53 comments)

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  •  thanks. do you have links? it's hard to get (2+ / 0-)
    Recommended by:
    skymutt, beach babe in fl

    straight information on what, exactly, China does.

    "At this point of unimaginable threats on the horizon, this is what hope looks like." - Tim DeChristopher @RL_Miller

    by RLMiller on Mon Sep 19, 2011 at 03:41:06 PM PDT

    [ Parent ]

    •  All the Chinese solar manufacturers... (2+ / 0-)
      Recommended by:
      RLMiller, Norm in Chicago

      ...get these government-backed loans.  The best information I know of is in the individual company earning reports and conference calls (I am a small invester in a couple of the American-listed Chinese solars and have taken a beating!)  I have heard discussions of the terms of the investments, but I do not recall details because I was not so much interested in those details at the time.

      Here is an article which breaks down how much in government loans have been guaranteed to various companies:

      Chinese banks provided government-backed loans to several of the country’s key solar PV companies last year to the tune of more than $25 billion. Trina Solar Ltd. (NYSE: TSL) received $4.4 billion, Suntech Power Holdings Co. Ltd. (NYSE: STP) received $7.3 billion, JA Solar Holdings Co. Ltd. (NASDAQ: JASO) received $4.4 billion, Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) received %5.3 billion, and LDK Solar Co. Ltd. (NYSE: LDK) received $8.9 billion. Most of these funds were directed at expanding manufacturing capacity as a way to drive down costs.

      Here's a press release from JA Solar, one of those companies, announcing its credit deal:

      JA Solar Holdings Co., Ltd., (Nasdaq:JASO), one of the world's largest manufacturers of high-performance solar cells and solar power products, today announced that it has signed a Financial Partnership Agreement with the Shanghai branch of China Development Bank ("CDB"), a government policy bank solely owned by China's central government.

      Under the terms of the agreement, China Development Bank will provide up to RMB 30 Billion  (~that is the whole $4+ billion mentioned in the other article-- skymutt edit) of credit facilities and financing to JA Solar to support JA Solar's long-term growth and corporate development plans. Detailed terms of the various credit facilities will be subject to the internal procedures to be conducted by CDB in accordance with its risk management and operational regulations, subject to individual credit and lending agreements.

      The Financial Partnership Agreement between JA Solar and China Development Bank provides a broad framework in which China Development Bank and JA Solar will collaborate for mutual opportunities to facilitate JA Solar's strategic growth plans. As a strategic partner, CDB will provide financial support for JA Solar's capital needs for future projects and long-term development plan. Collaboration opportunities include mutually beneficial arrangements for project financing and financial services.

      China Development Bank also agrees to actively support JA Solar in the investment in and financing of its business development and growth plans. The parties will meet on a regular basis to identify additional opportunities for strategic cooperation. They have also agreed to work closely to improve JA Solar's global competitiveness, and collaborate to create an international financing platform to support JA Solar's growth and capital needs.

      "We are very pleased to have entered into this agreement, which demonstrates CDB's confidence in, and support of JA Solar," said Dr. Peng Fang, CEO of JA Solar. "Through this strategic partnership with CDB, JA Solar will be able to pursue certain business opportunities and future growth plans with the backing of a very strong financial partner," he said

      One thing that is important to highlight out of this press release is that this lending is to be spread over a number of years.  JA Solar, for instance, has only taken on a small fraction of $4.4 billion in debt in the year since the credit facility was announced, even though they have engaged in an aggressive and rapid expansion of their manufacturing capacity.  The story is similar at the other solars I am familar with.  As demand has hit a slow patch this year, expansion will even be slower than was probably expected at the time that these loan guarantees were made.  I point this out because I have seen articles stating stuff like "China has pumped $30 billion into its solar industry in a year" and that can give the wrong impression--- probably far less than ten billion (my estimate, unsourced) has actually been pumped into the industry in the last year, the rest is meant to be lent over several years, and some of the $30 billion may never be lent.

    •  Thanks for the diary is link I've been (2+ / 0-)
      Recommended by:
      RLMiller, bablhous

      using for China environmental

      a good amount of English better than our media's reporting on China

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