China Fear of the Day

This NYTimes piece on China and solar power is a must read as it touches upon environmentalism, protectionism, nationalism, the stimulus, the financial crisis and more! Here are a few grafs and comments.

Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.

But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China…[and] plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years…

Good news, right? Plunging prices for solar is just what we want and shouldn't we applaud subsidies for green energy? Not so fast according to the article:

…solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun…

China monopolizes the sun!

Ian A. Bowles, the former energy and environment chief for Gov. Deval L. Patrick…said the federal government had not helped the American industry enough or done enough to challenge Chinese government subsidies… “The federal government has brought a knife to a gun fight,” Mr. Bowles said.

I guess Bowles didn't get the memo about the new civility, or perhaps that only applies domestically. The reporters also seem to signal their views.

Evergreen’s joint-venture factory in Wuhan occupies a long, warehouselike concrete building in an industrial park located in an inauspicious neighborhood. A local employee said the municipal police had used the site for mass executions into the 1980s.

Woah, a little gratuitous no?

See here for more of interest including a discussion of how the financial crisis and the Lehman bankruptcy are involved.

Hat tip: Daniel Akst.

Comments

Find me a site in the continental US that wasn't used for mass executions of natives.

See. Death panels. We told you so.

So, let me get this straight. The Chinese government is going to confiscate resources from its subjects (they are not "citizens"), give those resources to solar panel manufacturers, who then sell solar panels to US citizens so cheap that it's no longer worth bothering to make them ourselves. And this is supposed to worry me? I mean yeah it's immoral and I feel bad for the Chinese, but we're definitely getting the long end of the stick here.

Never pass up an opportunity to take an unnecessary swipe at people you dislike, way to go.

Yeah, sure, we should do more to subsidize the Silicon Valley VC guys who made bets on solar and protect their domestic market from competition.

Why not go one further, mandate that solar sells be placed on ethanol cars--that way we can get a twofer subsidy for two interest groups.

That "gratuitous" fact was very much the one that leapt out at me when I read the story over the weekend. Worth an article itself, as a sign of the way China's changed over the past generation.

Industrial policy?

So taxpayers footed $40 million + to get this technology off the ground and proven, the 'owners', not making enough money moved everything to China. Of course they did this under Chinese law as minority stake-holders in the firm, which now gets the technology transered to them, i.e. the PRC. What's not to like about this if you are either Chinese or the Communist Government?

Nice job politicians. Maybe next time the tax breaks come with an ownership clause - i.e. the US foots the bill the US gets to own it not some 'shareholder' who wouldn't invest shareholder money to make this happen.

Do you disagree with the notion that China is more mercantillist than free market? If not, I've got some rare earth I'd like to sell you. Not the kind that once came on vinyl.

Adam:

I was unaware that the Great Leap Forward occured in the 1980s. Thanks for injecting a little clarity into the discussion.

"I was unaware that the Great Leap Forward occured in the 1980s. Thanks for injecting a little clarity into the discussion."

Why not reread my post, I never claimed anything like that. But since you prefer ending this debate in a Godwin, here goes.

I am happy when I see reporting on China conclude, however far it has come recently, with some small reminder of the fact that China still has, unapologetically, the most murderous regime in all of human history. The Chinese government killed more of its own citizens than the Nazis and the Soviets combined, and has never, ever atoned for this. The 'Great Leap Forward' just happened to be the largest and most visible event.

If the Third Reich still existed, an American company was building a new factory in Auschwitz subsidized by the Nazis, and I read a report on how savvy that American company is, I would also like a small reminder of what happened there, even though those atrocities happened 70, not 25, years ago as in the quote.

Some people are forward-looking, Adam, and some are backward-looking. You can change the future, but you can't change the past, no matter how angry you might be about it.

What do you think the Chinese should do?

It is 10:55 pm local time, the sun set almost 5 hours ago. The temperature outside my house right now is 7 F (-14 C). Oh, yes and everything outside is covered with snow. Until you can solve these problems, solar panels will not be worthwhile to me, or anyone living in the northeastern quadrant of the US. The whole solar mania is clusterf#$%& of bad non-economic thinking. It doesn't make any difference if they are made in China or the Peoples Republic of Massachusetts, they are a waste of resources that should be shunned.

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