China's State Council, or cabinet, on Wednesday said it would promote consolidation in the domestic solar energy industry, as part of efforts to turn around a sector plagued by high debt.
China
's State Council, or cabinet, on Wednesday said it would promote
consolidation in the domestic solar energy industry, as part of efforts to turn
around a sector plagued by high debt.
The State Council will encourage mergers and acquisitions in the solar-energy
industry, it said in a statement posted on the government's web portal. It
didn't say how it would do so.
"The main problems include over-capacity, excessive dependence on foreign
markets and broad operational difficulties," the State Council said.
The cabinet will also reduce government support and ban local governments from
supporting failing domestic solar companies, it added. It plans to strictly
control the expansion of new projects to manufacture polysilicon and solar
panels, promote electricity price reform, encourage the use of independent
solar-powered generators and make adjustments to the electricity feed-in tariff,
among other new policies.
Chinese solar companies accumulated heavy debt between 2009 and 2011 to fund
their capacity expansion, but a market downturn left them struggling to make
interest payments, and support from local banks as well as provincial
governments that rely on the companies for tax revenue, employment and economic
growth, have helped carry the weight of the debt.
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