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Lessons from the previous car: blind subsidies, messing up solar energy
Several industries have been “subsidized and lostâ€, and blind expansion has led to financial crisis.
Since the "grasping the big and letting small" policy that began in 1997, this form of special industry development based on "support subsidies" has begun.
Fifteen years ago, China had the world's largest population, but there was almost no industry in the world. China’s embarrassing road is a “necessary evilâ€: all industries must grow fast and have a large scale.
But now it seems that the industries that have been “named by†in China, including the early coal, iron, copper, aluminum, semiconductor fabs, and LEDs in the seven emerging industries, are all overcapacity, turning back to the government. Seeking a caring eye.
58% of the world's solar polysilicon is produced in China; 46% of the world's solar cell capacity is also in China. GCL, Wuxi Suntech, Jiangxi Saiwei, Yingli, Tianhe... These Chinese players, from the nameless to the global industry price, have not been more than 10 years before and after. However, in August 2012, Wuxi Suntech, the first brand of solar cells, was born under the huge losses. The founder Shi Zhengrong resigned as CEO and was replaced by Finance Minister Jin Wei, but he still has not escaped the shadow of bankruptcy. Italian courts also accused them of illegally setting up solar power plants to defraud government subsidies. Shande Power, the parent company listed in the US, was filed a class action lawsuit by US investors, and it would not hesitate to let this former Golden Rooster (Wuxi Suntech) close down to solve the problem.
Overcapacity, profit from subsidies
In 2012, China's solar energy, which was blindly expanded, suffered two evil consequences: one was the stagnation of global market growth, dragging down 90% of China's solar energy production line, and the capacity utilization rate of the first-tier manufacturers was the lowest in the history of 50% to 70%. . The other is the combination of Europe and the United States, the United States on November 7 by the International Trade Commission (ITC) ruled that China's batteries and modules for "double anti-" (anti-dumping, anti-subsidy) classes with high tariffs. Then on November 10th, the world's largest solar energy market - the European Union also announced that it would restart the investigation of China's anti-dumping. "Once the EU determines the punishment, China's second- and third-line solar plants will have a wave of bankruptcy," Jia Jiazheng expected.
The LED industry has also fallen into the same dilemma. Oversupply has continued from 2011 to 2012. However, when the global LED factory fell into a loss, the Chinese indicator industry Sanan Optoelectronics still had a profit of 666 million yuan in the first three quarters. The government in the first 10 months The amount of subsidies reached RMB 300 million. On November 13th, Sanan’s huge financial resources made it possible to obtain nearly 20% of Taiwan’s equity in private equity, becoming the first shareholding of LEDs on both sides of the strait.
This kind of industrial miracle that relies on government subsidies and rewards has a surprisingly high growth in the early stages.
The promotion policy is to encourage the LED
In fact, due to the continued downturn in the European and American economies, many LED lighting export companies have made the choice of the domestic LED lighting market. The country's series of favorable policies to promote LED is undoubtedly a stimulant for domestic LED companies.
At the end of last year, the National Development and Reform Commission announced the "China Roadmap for Eliminating Incandescent Lamps" and decided to ban the sale and import of incandescent lamps for general lighting of 100 watts and above from October 1, 2012; by October 1, 2016, sales and Import incandescent lamps for general lighting of 15 watts and above. The release of this road map means that incandescent lamps will gradually withdraw from the historical stage from this year, and the prelude of the domestic LED lighting market has been opened.
At the same time as the elimination of incandescent lamps, the state has further increased its support for LEDs. On April 12, the National Development and Reform Commission announced that in 2012 the Chinese government will spend 40 billion yuan for the purchase of LED street lamps and provide 30% financial subsidies for LED streetlight users.
On May 16, the State Council also discussed the adoption of the National Twelfth Five-Year Plan for the Basic Public Service System, which will provide 2.2 billion yuan to support the promotion of energy-saving lamps and LED lights.
The introduction of a series of favorable policies is of great significance to the launch of the domestic LED lighting market. Some industry experts predict that by 2020, LED's market share in China's lighting market will reach 80%, becoming the world's largest LED lighting market, the market size will exceed one trillion yuan.
Will the government’s strong subsidy promotion help open the civilian market?
“In the past two years, the LED lighting promotion process has played a major role in the government.†In Zhang Wei’s view, the high price of LED lighting products has a natural barrier to the market. In order to gradually cultivate this market, the government needs to be strong. The subsidy policy is stimulating. "At present, the penetration rate of LED lighting in China is only about 5%, and the potential is huge, but it also takes a while to show that the LED lighting market is fully open."
The development of technology needs to be gradual, and the LED industry should also be like this. The government's strong subsidy and promotion policies have accelerated the development of the LED industry and helped to open the LED market quickly, but this has also brought concern to the industry.
An elderly person in the lighting industry said that some of our policies should be re-examined. The government has stipulated that the transformation will be completed within a few years. This will allow the industry to make a large scale in a period of time, far exceeding the real market. Demand, and when the government achieves the goal, it will let the support policies fade out. At this time, the order will plummet. What should the company do?
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The government blind subsidy promotion policy is to promote the LED industry?
In just over 10 years, China's 500 industrial products, China won 200 scale champions, but behind these world's first, mostly from the government blind subsidies, but also buried overcapacity landmines, detonating a wave of big factory closures.