Swiss Solar Panel Maker Meyers Berger Faces Stiff Competition from Chinese Manufacturers

Jan 29 (Reuters) – Swiss solar panel maker Mayer Berger is facing intense competition from Chinese manufacturers. Picture taken at the port of Qingdao in June 2019 (2024 Reuters)

[北京／フランクフルト ２９日 ロイター] – Swiss solar panel maker Meyer Berger ( MBTN.S ), opens a new tab facing intense competition from Chinese manufacturers. The German factory, which is in the red, could close without financial help from the German government.

“Chinese manufacturers deliberately sell their products in Europe at prices well below their production costs,” said CEO Gunter Erfurt. “China’s solar industry is able to do this because it has received hundreds of billions of dollars in strategic subsidies over the years,” he said, expressing his anger.

Western countries and China have been involved in a trade war since the United States imposed tariffs on China in 2018 under the Trump administration. There is growing concern in the European Union (EU) that China, which has excess production capacity, is flooding the country with cheap products. A new “front” has opened.

The European Commission is also leaning towards protectionist trade policies to counter the global impact of China’s production-oriented and debt-driven development model.

Over the past year, Chinese officials have continued to signal a shift from a growth model focused on infrastructure and real estate to one driven by domestic demand. However, in reality, the financial resources that left real estate went to the manufacturing industry, not to homes. As a result, concerns grew about overcapacity, deepening deflation at the factory shipping stage.

Pascal Lamy, former head of the World Trade Organization (WTO) and currently a professor at the China-Europe School of International Business and Trade, warned that China’s current course is causing increasing trade tensions and is unsustainable. “This is a structural problem that stems from the fact that parts of China’s production system are driven by Communist Party-led investment rather than market forces.”

China’s economy

China’s trading partners are fighting back.

The US government has imposed trade tariffs on China, halted exports of high-performance semiconductors and slowed its technological and military progress, and is increasing domestic infrastructure and industrial investment.

The EU is trying to reduce its dependence on China for the materials and products needed for its green transition. In response, China is conducting an anti-dumping investigation, suspecting that brandy produced by the EU is being sold at unfairly low prices.

India has curbed investment from China, including halting projects by Chinese carmakers, and in September last year imposed anti-dumping duties on some Chinese steel.

Michael Pettis, senior fellow at Carnegie China, estimates that if China maintains its current economic structure and grows at 4-5% per year over the next 10 years, its share of global investment will rise from 33 % to 38%. share in global manufacturing is expected to rise from 31% to 36-39%. As a result, other major countries are expected to see their shares fall in both categories.

In addition, China will need to borrow even more to maintain its already high investment levels for another decade, pushing its total debt to gross domestic product (GDP) ratio to 450-500% from around 300% currently . Pettis estimates it should. “It is hard to imagine that the economy can withstand such a large increase in debt,” he said.

China’s economy

There is no doubt that the structural transformation of China’s economy is hindered in some respects by the stalled economic recovery. Diverting resources to the household finances will only intensify the pain in the short term.

But George Magnus, a research associate at Oxford University’s China Centre, said China’s inability to increase domestic consumption is the flip side of its reliance on more imports from other countries.

Reuters graphic

Some economists believe that the reallocation of resources to China’s manufacturing sector is aimed primarily at moving exports up the value chain, rather than simply selling large quantities of goods.

Xia Qingjie, a professor of economics at Peking University, pointed out that if the West were to re-industrialize their economies, it would “take a long time” because of high labor and capital costs. “Western countries cannot limit China’s technological progress,” he said, as competition continues to intensify.

William Hirst, professor of Chinese development at Cambridge University, questions whether China has made the right policy choices in this regard.

Hurst said China is trying to develop sectors such as aviation, biotechnology and artificial intelligence, but has not had much success in pushing the technological frontiers or increasing employment in these industries.

With these challenges, he said, “If we are not successful, we will only increase debt and distort the economy, but if we are successful, we may have even more excess production capacity.’ ‘

“So, I don’t think there will be a sudden dramatic transformation of the Chinese economy that will increase its international competitiveness,” Hirst said, pointing to the difficult road ahead for China.

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Joe Cash reports on China’s economic affairs, covering domestic fiscal and monetary policy, key economic indicators, trade relations, and China’s growing engagement with developing countries. Before joining Reuters, he worked on UK and EU trade policy across the Asia-Pacific region. Joe studied Chinese at Oxford University and is a Mandarin speaker.

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