Responding to Trade Friction
The U.S. Department of Commerce recently announced its affirmative preliminary determinations in anti-dumping duties on Chinese photovoltaic (PV) cells. The ruling, if upheld in the second review, will impose levies of 31-250 percent on Chinese exporters, the highest tariff that China's new energy sector is levied. The bad news has put domestic solar PV enterprises in a tougher spot.
After European countries ceased subsidies to PV module products because of the debt crisis, the United States has become a dominant destination for China's solar PV exports. The preliminary determinations of the U.S. Commerce Department have deprived competitiveness of China's PV products in the U.S. market. Expectations abound that, in the upcoming three to six months, a mass shut down will occur amongst domestic PV enterprises.
As a main force in the international foray of China's new energy sector, the PV industry has witnessed quick development. Chinese PV makers exported 1,933 megawatts of PV module products in 2011. Due to the U.S. anti-dumping investigation on Chinese PV makers and the dwindling demand of European countries, China's PV sector witnessed a 33-percent year-on-year plunge in sales and 99.74 percent year-on-year slump in net profit in the first quarter of 2012.
The development of China's PV sector has been highly dependent on export. Statistics show that 98 percent of Chinese PV products were exported in 2011 and only 2 percent were sold at home. Once export is affected, the whole PV sector will be trapped in a critical condition.
Facing the possible punitive duties from European countries and the United States, domestic PV makers can tackle the problem by combining efforts in both foreign and domestic markets.
According to the preliminary determinations of U.S. Commerce Department, if Chinese PV makers can import solar panels from outside the mainland, they can bypass the punitive duties. Therefore, they can import from Taiwanese companies, assemble them and then export to the United States.
To avoid the massive shut down, Chinese PV makers should shift their focus to the domestic market. China's economic growth has urgent demand for energy, with 65 percent of petroleum is imported from foreign countries. Domestic PV makers have a lot to do in meeting the demands of the energy shortage in China.
Since 2011, many PV makers have established power plants in western regions where there is abundant sunshine. But their location should not be restricted in western regions. It may also cover more developed eastern regions where there is more demand for electric power. Although it will cost more, people in the more developed eastern regions can endure a higher price of electricity.
Some people suggest PV makers should establish power stations on top of roofs of homes in eastern regions. For instance, if we do so in 10 million units of affordable housing, we can install 5 gigawatts of solar PV with 500 yuan ($79.1) as the cost for a 12-storey building. The cost is just a small piece of cake compared with the housing prices, but it can give long-term return of energy.
In order to do so, PV makers have to communicate with concerned departments, such as the state grid. It will undoubtedly havea bright prospect. If they can manage to do so, domestic PV makers can not only avoid the possible massive shut down, but also have a prosperous future.
This is an edited excerpt of an article published in the Securities Daily
Lenovo Group Ltd. announced the launch of nine new ThinkServer servers on June 5 and said it plans to be one of the world's top three server providers by the end of 2015, surpassing IBM and Hewlett- Packard.
The Chinese company, which bought IBM'sPC division in 2005, became the world's second largest PC maker last year. But its server business didn't even merit a mention in the company's latest financial report.
With decreasing margins in the PC sector, traditional industry giants, such as HP and Dell, are transferring from being pure PC vendors to IT solution providers.
Lenovo's market share in the server market currently stands at around 3 percent, but it plans to lift this figure to 10 percent with sales of 1 million servers by the end of 2015. Starting from last year, Lenovo increased its investment in three server research and development centers in China, the United States and Japan.
Seeking an IPO
China National Nuclear Power Co. Ltd., the country's leading nuclear energy developer, is planning an A-share initial public offering (IPO) to fund the development of its nuclear power projects.
The company, formed in December 2011 in an effort to restructure its parent company, the state-owned China National Nuclear Corp., has passed environmental inspections of the Ministry of Environmental Protection, although nuclear power is not included among the industries that must pass environmental inspections before submitting IPO applications.
The money raised from the IPO will be used to fund five nuclear power projects worth 173.52 billion yuan ($27.45 billion).
In May, China saw 67 mergers and acquisitions (M&As). Of the total, there were 10 Chinese companies' overseas M&As, with the transaction value reaching $3.82 billion
The machinery manufacturing sector saw 12 M&A cases in May, the largest among all sectors
The transaction value of M&A cases in the entertainment and media sector stood at $2.6 billion, the largest amount among all sectors.
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