Industryweek 6300 Suntech

China's Commerce Minister Warns Against Over-Expansion

March 7, 2014
Let the bankruptcy of Suntech Power's Chinese unit, Wuxi Suntech, be a lesson. Industries shouldn't heavily rely on foreign markets.

BEIJING - China's commerce minister on Friday warned industries and companies not to over-expand, after the collapse last year of a key unit of the world's biggest solar firm.

The country's decades-long boom has turned it into the world's second-largest economy and a key driver of global growth, but at the same time major internal imbalances have developed.

China's Suntech Power, once the world's biggest maker of solar cells and panels, sought market share by driving down prices to levels some competitors claim were loss-making. However, its main Chinese unit, Wuxi Suntech, filed for bankruptcy last March with debts of hundreds of millions of dollars.

"What we should take into account is that some industries should not develop overly fast, particularly expand blindly," Gao Hucheng told reporters.

"They should not either rely on the foreign market for the majority of their product sales," he added.

Disputes over solar panels shook trade relations between China and the European Union and United States last year, which accuse Beijing of unfairly subsidizing the industry.

The sector is still hampered by fallout from overproduction combined with falling prices for cells and panels.

Driven by Private Sector

China's first-ever default on a domestic corporate bond was anticipated Friday as Shanghai-based Chaori Solar Energy Science & Technology said Tuesday it was unable to make full bond interest payments due Friday.

Gao's comments came at a news conference on the sidelines of the annual session of the National People's Congress, China's Communist Party-led parliament.

On Wednesday, Premier Li Keqiang announced a growth target of about 7.5% for this year and reiterated the importance of fostering consumer demand.

China's leadership is vowing to transform the country's economic growth model away from an over-reliance on often wasteful investment projects and instead make private demand the driver for the country's future development.

Asked about the Trans-Pacific Partnership (TPP), a huge U.S.-led free trade area currently under negotiation which so far excludes China, Gao said that Beijing has an open attitude to global trade and investment deals.

"We think the TPP is an important negotiation and an FTA of high standard," Gao said.

"China pays great attention to the progress of the TPP negotiations and is assessing the situations of the talks. We are also maintaining communications with the major negotiating parties."

Copyright Agence France-Presse, 2014

Popular Sponsored Recommendations

Beat the odds. Optimize product costs. Mitigate supply chain issues.

Sept. 12, 2023
Leverage fact-based supplier negotiations. Enhance design. Get to market faster. Our comprehensive Should Cost Analysis guide shows you how.

Gain a competitive edge with real-world lessons on private 5G networks

Nov. 16, 2023
The use of private networks in manufacturing applications is rapidly growing. In this paper, we present valuable insights and lessons learned from the field with the goal of enhancing...

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

Lean Manufacturing in the Age of the Industrial Internet

Oct. 24, 2023
Read how advanced MES capabilities can help you improve your labor utilization, reduce WIP, and optimize your production. Download the white paper today.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!