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China Bails Out World's Largest Maker Of Solar Panels

Tyler Durden's picture


Chinese local governments are facing the prospect of major unemployment problems should the swathe of solar panel makers, that have been subsidized from birth to now-near-death, continue to suffer from US and European tariffs (as well as simple gross mis-allocation of capital amid massive over-capacity). However, as is the way of the mal-investing world today, no barrier to rational economic theory is too low for government status-quo maintenance as it would appear that local banks have been strong-armed into extending loans to keep them alive. As Reuters reports, debt-laden (NYSE-traded) SunTech Power Holdings  - which is close to removal from the exchange due to its dismal equity price - has just received new 'bailout' loans. First, it was a race to debase. Now, we have the race to bailout the world's most worthless companies (especially in channel-stuffed industries) as the New Normal trade wars continue.


Via Reuters:

Banks in Wuxi, Jiangsu province, have extended new loans totalling 200 million yuan ($31.73 million) to locally headquartered solar power giant Suntech Power Holdings Co Ltd, the Shanghai government-owned China Business News reported on Friday, citing anonymous sources.


Suntech, the world's largest maker of solar panels, whose shares hit a high of $90 in early 2008, runs the risk of being removed from the New York Stock Exchange for failing to keep the average closing price of its shares higher than $1 over the last 30 trading days as of Sept. 10, Suntech said in a statement on Sept. 21.


Shares in Suntech, like rivals JA Solar Holdings Co , Trina Solar Ltd and Yingli Green Energy Holding Co, have fallen sharply in the past three years as sales prices have tumbled, squeezed by declining demand in export markets and overcapacity at home.


Debt-laden Suntech's shares have also been hit after it said in July that its partner in a solar development fund might have defrauded it with a bogus collateral pledge of hundreds of millions of euros of German bonds.


Local governments that invested heavily in supporting the development of solar power companies in their regions now face the likelihood of big local unemployment problems if those firms collapse. Last week Suntech announced it would lay off around 1,500 people from one of its plants in Wuxi.


LDK Solar, which reported a second-quarter loss nearly three times bigger than a year earlier, has also recently received local government money. In July the government of Xinyu in Jiangxi province announced it would use taxpayer funds to pay off some of the company's loans.


Beijing has asked provinces to provide plans as to how they will increase solar energy in their power mix by 2015, and state media reported that China Development Bank is preparing plans to provide further credit support, but all of this help has caused complaints in the U.S. and Europe.


The U.S. imposed import duties on Chinese solar panels as of May, and an anti-dumping investigation against Chinese solar companies is underway in Europe. The erection of trade barriers against Chinese solar products would make it even more difficult for the industry to resolve its capacity and inventory gluts.


Local branches of Bank of China Ltd , Industrial and Commercial Bank of China Ltd , Agricultural Bank of China Ltd , China Construction Bank Ltd and policy lender China Development Bank joined together to make the loan, the report said.

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Sun, 09/30/2012 - 17:43 | 2843536 NewThor
NewThor's picture

Study Nikola Tesla.

Energy Problems.


Sun, 09/30/2012 - 17:59 | 2843554 Skateboarder
Skateboarder's picture

The guy who makes those overpriced electric cars? I'll give him a solid meh. I'd rather study our visionary guru maestro Steve Jobs.

Sun, 09/30/2012 - 18:00 | 2843558 NewThor
NewThor's picture

The Solar Panels on Nasa's Dawn space craft work well enough to have it kick around the solar system for 5 years.

Real solar power, bitchez!


Sun, 09/30/2012 - 18:03 | 2843564 bigdumbnugly
bigdumbnugly's picture

Now, we have the race to bailout the world's most worthless companies

wonder what % of these 'world's most worthless companies' had government ties to begin with.

Sun, 09/30/2012 - 18:11 | 2843579 NewThor
NewThor's picture

Oil worship is a religion. 

and its got technological advancements 

trapped in an iron maiden.


Sun, 09/30/2012 - 18:26 | 2843600 knukles
knukles's picture
Biden promotes free colonoscopies to seniors in Florida



Who cares about solar when ya' get free enemas?

Sun, 09/30/2012 - 18:41 | 2843630 Hulk
Hulk's picture

The small print states that they charge double to repair the resulting prolapses...

Sun, 09/30/2012 - 19:47 | 2843734 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Does Leo still own these stocks?

Mon, 10/01/2012 - 01:21 | 2844106 Oh regional Indian
Oh regional Indian's picture

Wrong tech, wrong focus, no calculation of embedded energy, in-efficient.

Much easier ways exist to make us more efficient. 13% from tank to wheels?

World is aching for some common sense engineering...



Sun, 09/30/2012 - 20:08 | 2843764 grunk
grunk's picture


"We'll stick it where the sun don't shine!"

Mon, 10/01/2012 - 08:50 | 2844506 sessinpo
sessinpo's picture

Solar power in space has different aspects that you don't have in another environment such as on earth. And you should really stop calling others bitchez.

Sun, 09/30/2012 - 18:03 | 2843565 Hulk
Hulk's picture

He's referring to the cult of Tesla, whose members can grab their own shoe laces and place their  feet on the ceiling...

Sun, 09/30/2012 - 18:09 | 2843573 NewThor
NewThor's picture

Yes. Because tapping into Earth's Magnetic core is a shit ton crazier than sucking trillions of cubic feet of oil out of the middle of your planet.


Sun, 09/30/2012 - 18:39 | 2843627 Flakmeister
Flakmeister's picture

So did you ever graduate from beyond Popular Science circa 1953 for your EM theory?

Sun, 09/30/2012 - 18:45 | 2843637 NewThor
NewThor's picture

So did you ever graduate from your 1880's RedShield "oil is the only way" theory?

Can you name another technology that has been as stagnant as oil?

Sun, 09/30/2012 - 18:54 | 2843650 Hulk
Hulk's picture

I believe that the nuclear fusion occuring in  countless stars is a bit older than oil, but would still appear to be in vogue...

Sun, 09/30/2012 - 19:42 | 2843721 Cosimo de Medici
Cosimo de Medici's picture


Mon, 10/01/2012 - 08:46 | 2844486 sessinpo
sessinpo's picture

Very good question that brings up a great point Flak.


I did electrical engineering technology and I'm remotely aware of Tesla as well as his battle with Edison regarding AC vs DC. As you are probably aware, AC is what powers are grids, alternating current, and DC is what most batteries are.


Anyway, the "great point" you brought up, intentionally or not, is that whatever great technology was invented, discovered or whatever: if it was so great, they why hasn't someone else picked up on it and slammed the current corporations? If the poster is so adamant about the idea, why haven't they opened a business and become the next billionaire? The question answers itself as does the problem with solar panels. It just isn't economically feasible and doesn't work in current times. It doesn't matter what argument they throw at you, the market place says they are wrong.


They may not be wrong forever, but until the market place, economically, has a place for such great inventions, there argument is mute.

Sun, 09/30/2012 - 18:10 | 2843576 bigdumbnugly
bigdumbnugly's picture

ty hulk.    until now i had no idea the minx i've been seeing the past few weeks was a tesla cultist.



Sun, 09/30/2012 - 18:14 | 2843583 Hulk
Hulk's picture

You lucky Brute you! 

Sun, 09/30/2012 - 20:11 | 2843773 Citxmech
Citxmech's picture

Any BS-level graduate in electrical engineering today knows more than Tesla dreamed of.

And yes, you can use the Earth like a battery - for a small time you can get a couple of volts w/basically no amps.  Huge fail.

Sun, 09/30/2012 - 20:22 | 2843787 A Lunatic
A Lunatic's picture

Now grapefruit on the other hand..................

Sun, 09/30/2012 - 21:11 | 2843860 NewThor
NewThor's picture

The Sun?

Excellent example.

is there much energy in a coronal mass ejection?

Solar wind is fruitless?

GRB Burst net/mirror?

Sun, 09/30/2012 - 18:42 | 2843633 Flakmeister
Flakmeister's picture

Hey New Thor...

Do you have any idea what you are talking about or did you you read about that in a Sci-Fi pulp fiction novella from the 50's???

Sun, 09/30/2012 - 19:04 | 2843671 NewThor
NewThor's picture

A little bit of both, really.

Mon, 10/01/2012 - 01:02 | 2844183 Flakmeister
Flakmeister's picture

Very little of one, if you catch my drift...

Sun, 09/30/2012 - 19:03 | 2843669 Theos
Sun, 09/30/2012 - 19:12 | 2843680 Hulk
Hulk's picture

Theos, there is no such thing as free energy. Every device Tesla ever made is a net energy consumer. These scams have been going on since man started using energy.

If such a device could actually exist, the inventor would be an instant billionaire and would have no need for such an advertisement. Think about that...


Sun, 09/30/2012 - 19:32 | 2843708 Theos
Theos's picture

Like I said: looks legit!

I should have included a sarc tag.


I've studied EM fields, physics, power systems and been working in energy for years. These devices on youtube are so hillarious im spitting my beer on my monitor. 

"Hay take 4 diodes, a few 100uF capactors and an antenna and you get FREE ENERGY... LOOK it says 1 volt!!!!" 


I guess if anyone knew how a capacitor worked... ah fuck it.


Sun, 09/30/2012 - 19:54 | 2843739 Hulk
Hulk's picture

Glad to hear that Theos. SOme of the comments on Zh make me want to sell my pm's, get back on my spaceship, fly home ( a lovely place half way to the galactic center) and play Golf  with Knuckles 

Sun, 09/30/2012 - 21:15 | 2843866 NewThor
NewThor's picture

How many gallons of gasoline does your spaceship's tank hold?

Sun, 09/30/2012 - 19:31 | 2843709 pods
pods's picture

Hulk, might want to research the Methernitha  group out of Linden, Switzerland.


Sun, 09/30/2012 - 19:50 | 2843737 Theos
Theos's picture

Two counterrotating discs generate an electrostatic charge. One disc represents the earth, the other the clouds. The charges are bound using grid electrodes. After that, they are collected by non-contacting so-called "antenna keys," and then sorted.

After being initially turned on by hand, the discs rotate by themselves according to the electrostatic laws of attraction and repulsion. A rectifying diode keeps the cycles in a steady state. Otherwise, the impulses of attraction and repulsion would accumulate and cause the discs to run faster and faster — the correct speed is of great importance. For optimal power generation, the discs have to run quite steady and slow.

By means of grid condensers, the energy is stored and then uniformly discharged, at the same time reducing the high voltage and building up power with additional devices.

Finally, the machine supplies a uniform direct current, which varies according to the size of the model. The machine furnishes about 3-4 kW permanent output, depending on humidity, whereby the electric potential ranges from 270 to 320 volts.

High humidity of the atmosphere prevents the build-up of electric potential, so the drier the air, the better. No doubt, through the so-far-achieved results, one main objective has been reached, namely, to prove that it is possible to use free energy.

SOUNDS LEGIT! Things in bold are super legit.


Sun, 09/30/2012 - 22:51 | 2844019 Cosimo de Medici
Cosimo de Medici's picture

In Linden?  They're the guys who make those chocolates you can get at DutyFree, right?  Perpetual production line, you say?  Sweet!

Sun, 09/30/2012 - 17:49 | 2843539 Jason T
Jason T's picture

good..I'm long STP...bitchez.

Dr. Shi is smart cookie.  

Sun, 09/30/2012 - 17:50 | 2843543 Urban Roman
Urban Roman's picture

Presumably the solar company, in contrast to the TBTF over here, makes something useful. 

Sun, 09/30/2012 - 18:06 | 2843570 bank guy in Brussels
bank guy in Brussels's picture

Just to say a word here for the ZH old-timers, on behalf of Leo Kolivakis, one of the great early beacons of ZeroHedge contributors' humour.

Leo, a Greek-Canadian, was bullish on Chinese solars ... and Greek sovereign debt too.

Sun, 09/30/2012 - 18:15 | 2843587 bigdumbnugly
bigdumbnugly's picture

brings a tear to my eye.   i miss that old straight man.

on topic,  i'll bet china will rue the day it re-engineed our bailout snafu for themselves.   serves em right.

Sun, 09/30/2012 - 18:33 | 2843611 Urban Roman
Urban Roman's picture

Didn't say I was bullish on 'em. Just that they have a product. 

What does JPM or GS do? That's of any use to humanity? 


Any time there's an open ended subsidy like this and below-cost dumping, trouble is on the way. 

Sun, 09/30/2012 - 17:51 | 2843544 Jendrzejczyk
Jendrzejczyk's picture

Will the sun EVER shine on the solar industry?

Sun, 09/30/2012 - 18:20 | 2843593 bigdumbnugly
bigdumbnugly's picture

according to a good ol southern adage it will exactly twice a day.

Sun, 09/30/2012 - 18:33 | 2843613 Jendrzejczyk
Jendrzejczyk's picture

You're not as dumb as you look (you couldn't possibly be). ;)

Sun, 09/30/2012 - 19:56 | 2843741 A Nanny Moose
A Nanny Moose's picture

Areas with the most sun will have an unfair advantage. They must share their sun with those who have little sun.

Sun, 09/30/2012 - 19:56 | 2843742 A Nanny Moose
A Nanny Moose's picture

Areas with the most sun will have an unfair advantage. They must share their sun with those who have little sun.

Sun, 09/30/2012 - 17:52 | 2843545 Jason T
Jason T's picture

For the record, China spent $1 trillion more than the U.S. on gross capital formation in 2011 ... 

the future will undoutebly belong to China in my opinion..economically. 

Sun, 09/30/2012 - 17:59 | 2843555 BurningFuld
BurningFuld's picture

Really? Are you counting or excluding the USA War Machine?

Sun, 09/30/2012 - 19:27 | 2843667 Jason T
Jason T's picture

just counting gross fixed capital formation


Sun, 09/30/2012 - 18:39 | 2843624 CrashisOptimistic
CrashisOptimistic's picture

The future . .economically, will belong to who has oil, and that ain't China.

It's Russia.  They get the future, which extends only a few decades before 6 of the 7 billion die off.

Sun, 09/30/2012 - 18:41 | 2843629 Flakmeister
Flakmeister's picture

Canada is better off.... except that it is next to the US, which spells long term doom...

Sun, 09/30/2012 - 19:43 | 2843725 Cosimo de Medici
Cosimo de Medici's picture

Japan had similarly impressive figures in the late 1980s.  How did the 90s and 00s go for them?

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