WUXI, China - In the eastern Chinese city of Wuxi, home to the
world's biggest maker of solar panels, labour is so cheap that workers carry
out jobs by hand while machines designed to perform the same tasks sit idle.
The low cost of labour, coupled with the massive scale of production at
its 14,000-person plant, have enabled China's Suntech to become the global
industry leader in just a decade.
Chinese producers now dominate the global solar power business.
But their success has become a major global trade issue as American
companies accuse them of dumping in the US market and receiving unfair
subsidies from Beijing.
The US government is due to announce findings on the issue later this
month, which could result in duties against Chinese manufacturers.
Suntech denies unfair business practices have helped make it the
world's largest producer, but it makes no secret of its strategy of keeping
prices low to boost sales and make solar power available to more people.
"We don't believe we have any unfair subsidies or anything like
that," said Suntech's vice president for global marketing Edwin Huang.
"We just hope it doesn't turn into a full-scale trade war. It's not good
for anyone."
US companies have accused China of improperly subsidising its solar
sector as part of a no-holds-barred commercial battle for supremacy over an
industry experts estimate will be worth trillions of dollars in the future.
They say Chinese competitors have access to cheap financing from
state-owned banks and outright government subsidies aimed at building up the
industry, as Beijing makes alternative energy a priority.
At least three US solar companies collapsed last year as global prices
slumped, among them Solyndra, which had a US$535 million (S$671 mil) loan
guarantee from US President Barack Obama's administration.
Evergreen Solar, once listed on the Nasdaq exchange, and high-profile
Intel spin-off SpectraWatt also shut down.
One of the firms which lodged the complaint to the US government,
SolarWorld Industries America, has said Chinese producers are boosting output
to dump "enormous quantities" of solar cells and panels in the US
market.
At Suntech's factory, workers are not focused on politics, but on the
task at hand - making a "sandwich" of solar cells, plastic sheeting
and glass which will become the finished solar panel.
"The cells are easy to break. You have to be careful," said
one. Workers on this assembly line receive a base salary of 1,500 yuan to 1,800
yuan (US$240 to US$290) a month and the factory runs 24 hours a day.
Access to an army of workers has helped Suntech lower production costs,
passed on to customers in lower prices. A collapse in the price of silicon -
the raw material for making solar cells - has also slashed costs.
Still, with global solar panel prices at around US$1.0 per watt of
generation, profit margins for Suntech have been squeezed. Some blame Chinese
producers themselves for flooding the market and pushing prices down.
"In the long term, yes, lower prices are good for everyone. Our
aim is to get more people to use solar energy. It's a volume game," Huang
said.
China is the world's second biggest oil consumer, but it is making
large strides forward in clean energy.
To promote solar power, the Chinese government last year started to
offer a guaranteed price to producers, which made it more attractive to
generate electricity from solar energy.
With the US market in question and the European market expected to grow
little this year due to the sovereign debt crisis, Suntech expects its home
territory of China to make a greater contribution this year.
"By next year, China will become the largest single market in the
world," Huang said.
AFP
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