Posted on 11/16/2010 3:59:14 AM PST by Palter
Since the end of the Cold War, the world's powers have generally agreed on the wisdom of letting market competition—more than government planning—shape economic outcomes. China's national economic strategy is disrupting that consensus, and a look at the ascent of solar-energy magnate Zhu Gongshan explains why.
A shortage of polycrystalline silicon—the main raw material for solar panels—was threatening China's burgeoning solar-energy industry in 2007. Polysilicon prices soared, hitting $450 a kilogram in 2008, up tenfold in a year. Foreign companies dominated production and were passing those high costs onto China.
Beijing's response was swift: development of domestic polysilicon supplies was declared a national priority. Money poured in to manufacturers from state-owned companies and banks; local governments expedited approvals for new plants.
In the West, polysilicon plants take years to build, requiring lengthy approvals. Mr. Zhu, an entrepreneur who raised $1 billion for a plant, started production within 15 months. In just a few years, he created one of the world's biggest polysilicon makers, GCL-Poly Energy Holding Ltd. China's sovereign-wealth fund bought 20% of GCL-Poly for $710 million. Today, China makes about a quarter of the world's polysilicon and controls roughly half the global market for finished solar-power equipment.
Western anger with China has focused on Beijing's cheap-currency policy; President Obama blasted the practice at the G-20 summit in Seoul last weekend. Mr. Zhu's sprint to the top points to a deeper issue: China's national economic strategy is detailed and multifaceted, and it is challenging the U.S. and other powers on a number of fronts.
Central to China's approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters.
(Excerpt) Read more at online.wsj.com ...
No doubt.
Hmmm..... If I read this right, the Chicaps are promoting business whereas the Amerarxists are destroying it.
Have you disparaged an enviro today? a lawyer? a unionist?
We are at war with China. The war is fought with currency policy and corporate espionage.
The WSJ ran this? [chuckle]
This is an argument for less red tape, not more government control.
Have you disparaged an enviro today? a lawyer? a unionist?
I'd be angrier with Obama for doubling the money base and devaluing the dollar.
At some point the Fed shave to decide if they want to grow up...the Chinese are going to school us...
The Chi-Coms are not burdened by all the various government agencies and unions. They can run rings around us.
Exactly. True they are killing us on the labor charges but that gap is being closed more rapidly than most know. The second biggest gap is their time to product. I can get machined parts made for prototyping design projects in far less time, including the shipping than I can here locally. Since I use parametric 3D Cad to develop my parts, all I needed to do is send the file or even my own g-code via e-mail and most often it is on the mill the next day or two.
If I take the same part to most local shops, they look at me like I have two heads. They have to re-create the coding manually for their antiquated input systems and generally they want weeks instead of days to do the same job, at twice to four times the cost.
True that the Chinese invested heavily in modern equipment, but it is like the mindset of a blacksmith in the 1800’s versus the 1920’s. Keep living in the 1800’s and that is where you will stay. Additionally, what is the labor cost of having to be dealing with all of the red tape of government intrusion and roadblocks to easily keep up? That is our true impediment to actually competing with them.
Huh. Close our market to those Commies. Export Liberalism and import capitalism. $$$=(-L)+(-T) when L=Liberalism and T=Taxes.
No one should be surprised. It's the proven Asian model for economic growth: gain maximum access to US and other major markets, allow minimum possible access to the home Asian market, and lure western plants and jobs with cheap labor and lax regulation. Then copy and steal as much technology and know how as possible to use in domestic industries. - And develop huge trade surpluses with western nations and accumulate vast cash reserves.
And sit back and watch the ever gullible (or profiteering) westerners pretend that it really is free trade.
This article really imparts no new information, other than to say China is doing what Japan did, only on a much larger scale.
One sentence that tells all. China has no intention of opening its markets, or narrowing it huge trade surpluses with the west. They plan to bring foreign companies and technology into China as the price for some limited market access, then copy and steal until they can produce what they want domestically.
The process is working wonderfully (for China), and the same vast network of enablers and profiteers and apologists (and the clueless) in the West continues to give them cover with their constant babble about free trade and open markets (which the Chinese have no intention of ever allowing).
Oddly enough, China sees to it that business is done in China. We’d use taxpayer dollars to build the same plant in another country.
And, of course, sell the finished products back to us cheaper, thereby putting U.S. companies out of business, because our government won't protect our markets from that behavior.
Our Left loves government control of everything, but the problem is that government is dominated by a bunch of clowns who have never run anything but their mouths.
If we want a controlled economy, we should turn it over to the Chinese Communists who at least are super-efficient. (By the way, they are also foresighted and are buying up every kind of raw material in Africa and Asia and South America, while we suck our thumbs and let the EPA keep us from developing the resources we have.)
Also known as "fascism."
It's been obvious for more than a decade that China was transitioning from being a communist state into becoming a fascist superstate. And that's just what they are.
We're hearing US dollars buying too many yuan is bad for America while a weakening dollar that buys fewer yuan is also bad. Some people really love this 'bad for Ameirca' shtick.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.