Party is over for dirt-cheap solar panels, says China executive • Hacker News Board

Re: Party is over for dirt-cheap solar panels, says China executive

#81

Post by usrusr » Sat, Jan 26, 2019, 12:42 PM UTC

stcredzero wrote: post #11

ChuckMcM wrote: post #3

Always over until it starts again. Note that the party is over (in this case) because it is threatening smaller businesses, not because there is a lack of capacity or that the "big guys" couldn't still make money at the reduced rate. In every industry where I have been aware of this this situation coming up (voluntary reduction in production in order to shore up prices), it works for a while and then people "cheat" a…

Often, one sees industries making changes because market forces have made the transaction cost of manufacturing too onerous. Some industries in that case will consolidate and vertically integrate. If the pain from uncertain prices and supply gets too great, could the solar industry start with mergers and vertical integration? Or is it far too early for that?

Vertical integration to the point where they could acquire cheap land songwriters to optimistically cover with surplus production? This could be an interesting difference to other markets with an overcapacity cycle, e.g. you can't just hook up a month's output of DRAM to the network and have an income stream.

Re: Party is over for dirt-cheap solar panels, says China executive

#82

Post by rswail » Sat, Jan 26, 2019, 12:54 PM UTC

mateo1 wrote: post #73

tossaccount123 wrote: post #7

no shit, this is what everybody with a brain has warned about China's MO is to subsidize Chinese businesses, restrict foreign competition internally, and steal foreign companies IP until they are bankrupt, while simultaneously being allowed to export their goods to those same countries with no penalty. Then they jack up the prices when all the competition is gone Everybody criticized Trump for the steel and solar tar…

Lots of people profit short-term by trading with China. It's easier to make a profit as a middleman with China than as a manufacturer in a western country. I'm definitely left wing, but I applaud Trump for the tariffs. Tariffs are a must for the western world if we want to maintain our standards of living and survive long-term. Germany is also a predatory exporter in Europe, but fewer people seem to care about that.…

Germany is the prime exporter of the EU. It has the benefit of the Euro in the internal market for buying power due to its size and it has the benefit of the Euro in the external market because German bonds denominated in Euros are cheaper for it than the other EU states.

I'm a democratic socialist, but tariffs are not the way to control trade and standards of living. That is a mercantilist attitude from the 19th Century. Tariffs are paid by the consumers in the country that has the tariffs (ie Tariffs on China by US is paid by people in the US). It primarily hits those that spend most of their income on consumption, which is those that are poorer.

What is needed is the power of Labor (ie unions etc) to be applied in the foreign country, by having restrictions on goods and services that are not provided by Labor with fair conditions.

That's not the same as pay or money, there are comparitive advantages in things like the supply and demand on local food production etc.

Re: Party is over for dirt-cheap solar panels, says China executive

#83

Post by rswail » Sat, Jan 26, 2019, 12:59 PM UTC

mateo1 wrote: post #78

emteycz wrote: post #75

Earlier quoted context omitted.

> I'm definitely left wing, but I applaud Trump for the tariffs. I thought tariffs are leftist proposition. At least in Europe it is.

Tariffs are supported by both left and right for different reasons. People like Trump represent national/regional industrial interests so they want local production and less competition from abroad. Leftists (in the european, non-neoliberal sense) want to empower the local workers and economies. The resulting action is the same. And it makes sense from a geopolitical perspective too. There are valid reasons not to im…

The opposite of tariffs is not "completely unrestricted trade imbalances".

The opposite of tariffs is common quality, safety, labor, ecological impact requirements.

Tariffs are just a tax on one part of the local population to subsidise another part. Tariffs are paid by the importer, not the exporter.

For the exporter, not being able to export to a particular country, if there are other markets available, is a hindrance, not a killer.

The US is a big market for Chinese solar panels, but so is the rest of the world.

China was a big customer for US soybeans, now it buys none. This has ruined US farmers, but the global soybean market has taken up that slack.

Tariffs are dumb, clunky, 19th century tools for a global, multinational world. We need to accelerate not just the flow of capital, but also of labor, we need to make sure that the benefits of development are shared, not "trickled down".

We need to bring the 3rd world to the level of the 1st, not drag the 1st down to the 3rd. It's not a zero-sum game.

Re: Party is over for dirt-cheap solar panels, says China executive

#84

Post by mateo1 » Sat, Jan 26, 2019, 1:45 PM UTC

rswail wrote: post #82

mateo1 wrote: post #73

Earlier quoted context omitted.

Lots of people profit short-term by trading with China. It's easier to make a profit as a middleman with China than as a manufacturer in a western country. I'm definitely left wing, but I applaud Trump for the tariffs. Tariffs are a must for the western world if we want to maintain our standards of living and survive long-term. Germany is also a predatory exporter in Europe, but fewer people seem to care about that.…

Germany is the prime exporter of the EU. It has the benefit of the Euro in the internal market for buying power due to its size and it has the benefit of the Euro in the external market because German bonds denominated in Euros are cheaper for it than the other EU states. I'm a democratic socialist, but tariffs are not the way to control trade and standards of living. That is a mercantilist attitude from the 19th Cen…

>What is needed is the power of Labor (ie unions etc) to be applied in the foreign country, by having restrictions on goods and services that are not provided by Labor with fair conditions.

Although this would generally negate the need for tariffs, there are serious issues:

-You can't enforce this. It's a very different country on the other side of the globe.

-You can't properly observe working conditions for the entire supply chain (and conversation on what constitutes "fair conditions" can enter the realm of philosophy very quickly)

-Even if labor was in control of production, they could still act maliciously as a group

-Small transient fluctuations in efficiency are magnified without a hard cutoff to stop them from using the extra capital to become too big and undercut competition

And on top of that, rich countries have to face a sharp recession while the poor countries catch up. That's not a small amount of time. In much of Europe we already have 1-2 generations that faced very harsh economic conditions because of this. Generosity has limits. Yes, free trade (generally, not always) allows poor countries to develop faster, but they grow asymmetrically and the working/middle class of rich countries suffers too.

Re: Party is over for dirt-cheap solar panels, says China executive

#85

Post by Tsubasachan » Sat, Jan 26, 2019, 2:26 PM UTC

adventured wrote: post #31

reitzensteinm wrote: post #30

Earlier quoted context omitted.

China is still only a moderate emitter per capita, though it's caught up to Europe in recent years. Considering the wealth disparity it's a little hard to criticize.

The earth doesn't care, so to speak, about whether it's per capita or not, it only cares about the total global output. The consequence of having 1.4 billion people in your society, is that you don't get to pollute at the rate of a nation with one million people that outputs 10x more pollution per capita. Is that unfair? No. I don't think per capita equality of pollution is the most important factor in this. As a soc…

The US official policy is that climate change is a hoax and even Northern European countries are failing to live up to the Paris climate accords.

Critiquing others is easy.

Re: Party is over for dirt-cheap solar panels, says China executive

#86

Post by jbay808 » Sat, Jan 26, 2019, 4:07 PM UTC

rrabsolne wrote: post #63

The most interesting part of the article is the seemingly perverse economic response where the government cut subsidies and then the prices _fell_. Is this an actual known pattern or just a strange side effect of this situation?

As other commenters have noted, it was an installation subsidy. Installation is a major cost of solar, other than just the cells themselves. That made it cheaper to move inventory out of the warehouse and into the field. With the subsidy gone, the inventory piles up in the warehouse and manufacturers get desparate to sell. So they drop their prices, but it's still more expensive to bring those panels online than it was when the subsidy was in force.

It's possible that the price will keep dropping until the panels are cheap enough to move at their current production capacity. But it's also possible that the lost profits make this level of production unsustainable, and solar panel costs climb back up as manufacturers shut down their no longer profitable lines and supply drops. It depends partly on what their margins are now, and what cost reduction room they have.

Re: Party is over for dirt-cheap solar panels, says China executive

#87

Post by porpoisely » Sat, Jan 26, 2019, 4:47 PM UTC

rmah wrote: post #36

porpoisely wrote: post #17

Earlier quoted context omitted.

Tariffs help US businesses and american workers. It's why the first major act of congress was a tariff. https://www.encyclopedia.com/history/encyclopedias-almanacs-... The US economic might was built on tariffs protecting american businesses. We became the largest economy in the world in the late 1800s due partly due to tariffs. It's also why europe, japan, korea, china, etc used tariffs to become economy powerhouses…

"Tariffs help US businesses and american workers. It's why the first major act of congress was a tariff." Well, one can argue about whether or not tariffs help domestic businesses and workers, but that was not the reason tariffs were one of the first major acts of congress. It was one of the first acts because tariffs were THE major revenue source for the US federal government. Remember, those were the days before th…

Absolutely, like most things economic, we can debate the merits forever. But what's not debatable are economic and historical facts. The blanket claim was that tariffs hurt US businesses and workers. We know this is factually incorrect because we can look to the US economy and businesses in the 1800s where we rose from a relatively underdeveloped nation to the largest economy in the world with the world's largest businesses under a tariff heavy century. We can look to west germany, japan, korea and now china also.

Now that doesn't mean tariffs never hurt businesses. My belief is that tariffs can help or hurt businesses. I don't like ideological blanket statements like "Tariffs are always bad" or "Tariffs are always good". Tariffs are a national tool. Like any tool, it can be use for good or bad.

Re: Party is over for dirt-cheap solar panels, says China executive

#88

Post by tw04 » Sat, Jan 26, 2019, 5:17 PM UTC

atq2119 wrote: post #69

sigmaprimus wrote: post #65

Earlier quoted context omitted.

Good argument, maybe it should be based on the area of land controlled by each nation? Population density or Tons of CO2 produced per square mile? The problem with per capita policy is it encourages over population which makes the problem worse.

On the other hand, focusing on controlled area of land seems like a good way to encourage wars over territory. I don't think there's an easy answer.

Not to be harsh, but that sounds like it will solve two problems with one stone...

I don't think war is good for anyone but it has a way of reducing both population and carbon output.

Re: Party is over for dirt-cheap solar panels, says China executive

#89

Post by [deleted] » Sat, Jan 26, 2019, 5:47 PM UTC

tossaccount123 wrote: post #44

jayd16 wrote: post #13

Earlier quoted context omitted.

[flagged]

explain how China is the world's fastest growing economy and has the fastest growing living standards while being one of, if not the most protectionist countries on earth? According to most economists and their textbooks their growth should be terrible because they are so anti free trade The only people who benefit from low tariffs are the rich, who can then outsource production and ship goods back into the country w…

[deleted]

Re: Party is over for dirt-cheap solar panels, says China executive

#90

Post by jayd16 » Sat, Jan 26, 2019, 6:06 PM UTC

tossaccount123 wrote: post #44

jayd16 wrote: post #13

Earlier quoted context omitted.

[flagged]

explain how China is the world's fastest growing economy and has the fastest growing living standards while being one of, if not the most protectionist countries on earth? According to most economists and their textbooks their growth should be terrible because they are so anti free trade The only people who benefit from low tariffs are the rich, who can then outsource production and ship goods back into the country w…

I wouldn't say tariffs are China's reason for success or anywhere near it. That said, China and the US are drastically different.

It seems that most of their protectionist polices are about moving China from dumb labor into a tech hub. Global companies are forced to partner with a local business. This keeps some profits in China as well as locks businesses in and gives the local company the ability to do its own designs or even just steal IP outright. While frustrating, this is actually a pretty cheap exercise for the global entity. Sign a deal, do some meetings, fill some paperwork and boom you have access to a billion users and very cheap labor. The cost of competition comes later and many many businesses take the deal.

Contrast this with tariffs that are just a dumb tax that immediately bite into profits and don't directly promote growth locally. If you actually want to target US businesses, you'd be supporting subsidies not tariffs.

>The supposed savings of outsourcing weren't passed back to consumers, it was pocketed by the rich

I mean, this is just clearly false. The savings literally have to be passed back to the consumer or the Chinese goods would not out compete local goods and there would be no problem.