Use access key #2 to skip to page content.

Economic Warfare

Recs

8

November 21, 2009 – Comments (13) | RELATED TICKERS: AMAT , SPWR , ASTI

Sometimes Jstegma likes to know what the left is talking about. Today we are talking about the economic annihilation of the United States. This article is written by Robert F Kennedy jr for the Huffington Post.

...Indeed, the Chinese are treating the energy technology competition if it were an arms race. China is spending as much or more on greentech as it does on its military, hundreds of billions of dollars annually on renewable energy and grid infrastructure improvements. Those investments, if not vigorously countered, will effectively erode America's greentech industry leadership and secure China's dominance. China's economic stimulus package, targeted 38% of spending on greentech, as compared to a miserly 12% of the U.S. stimulus program. By 2013, greentech will account for 15 percent of the Chinese GDP. While the United States is projected to roughly triple its wind generation by 2020, China will increase its capacity twelvefold to a wind generating capability more than twice that of America's. And, while the United States is projected to increase its installed solar generation a modest 33% by 2020, China's solar generation is projected to increase 20,000%.

China's investments in solar technology have so powerfully stimulated the growth of a Chinese solar market that Chinese solar panel manufacturers now far outnumber American ones, and they are achieving low-cost production much faster than their American counterparts. Chinese companies are now flooding the American market with cheap Chinese solar panels and devastating the American manufacturing sector that was gearing up to create tens of thousands of U.S. jobs for our own ailing economy. Hundreds of U.S. solar manufacturers now see their prospects as grim. BP Solar, Evergreen, and General Electric have already announced the closing of American-based solar panel factories and outsourcing, primarily to China. America's leading solar manufacturer, Applied Materials, has opened the largest non-government solar energy research facility in the world in China. Of today's ten leading solar panel manufacturers, only one is American. The largest solar panel installation in the United States is a 70,000 panel, 14.2 megawatt array on Nellis Air Force Base in Nevada. The array provides more than 25% of the base's power needs, and saves the Pentagon a million dollars annually in energy costs, but the panels' manufacturer was China's Suntech Power Holdings. Even in the thin film solar market, among the last redoubts of American dominance Chinese businesses are squeezing profit.

Here is a list of companys that may have the opportunity to take advantage of Chinese Government investment. I have no RL position in any solar company at this time.

13 Comments – Post Your Own

#1) On November 21, 2009 at 12:27 AM, devoish (98.18) wrote:

Nuclear Power's Megafraud, by Pierre Tristam,

Candris' final fallacy: Renewables are "comparatively more expensive energy sources." In fact, nuclear energy is more expensive than solar or wind energy. Take Florida Power & Light's plan to build two new nuclear reactors sometime over the next 12 years (it's not clear when, though the company is already socking it to customers by making them pay for construction today. No other state but Georgia allows that con). The projected cost of the two reactors is $18 billion. It'll certainly go up well beyond that by the time they're done, but go with the $18 billion figure. The two reactors will produce 2,234 megawatts of electricity. That comes out to $8 million per megawatt at the opening bell. FPL just started operating a 25-megawatt solar-power plant in DeSoto County. Cost: $152 million, or $6 million per megawatt -- $2 million cheaper than the projected cost of the nuclear reactors. With wind, it's even cheaper. A Chinese-American consortium on Oct. 29 announced plans for a 600-megawatt wind farm in West Texas. Cost: $1.5 billion, or $2.5 million per megawatt. Cheap nuclear power? Demonstrably not.

Report this comment
#2) On November 21, 2009 at 7:46 AM, hhasia (65.63) wrote:

One should never forget the population of China is 1.3 Bill. If the numbers were broken down on a per person basis the USA is spending far far more than the Chinese on this initiative.  As well, the power needs  of the Chinese grow in relation to that population and the modernization of the country. Perhaps all the west sees are the glitzy pictures of the cities, not the villages that, at best, are akin to 1910 rural Alabama.

As for the competition, get over it. Get the great inventions out of the MIT labs and make stuff no one can equal. For goodness sake, a country that goes down the "whining" road is going the wrong direction. The US is better than that.

HHASIA

Report this comment
#3) On November 21, 2009 at 9:05 AM, devoish (98.18) wrote:

1910 rural Alabama.

I do not want to sound like I don't care about the economic struggles of Asians.

http://www.snowsuit.net/archive/ 

http://seekingalpha.com/article/171090-america-is-creating-green-energy-jobs-in-china 

 

Report this comment
#4) On November 21, 2009 at 9:28 AM, DaretothREdux (43.67) wrote:

devoish,

Hold on. So you're telling me that America might have to buy China's cheaply made solar panels? Next you're going to tell me that they have also cornered the market on cheap plastic toys? Say it ain't so!

Dare

 

Report this comment
#5) On November 21, 2009 at 10:27 AM, AbstractMotion (54.03) wrote:

Few things to keep in mind here China is just making the panels generally.  That is the frame that surrounds the actual cells, semiconductor manufacturing is a complex clean room process that tends to be very very expensive due to it's sensitivity to defects, not the kind of process that is easily outsourced to China.  If they actually do jump into this industry it's going to be much more likely to cause trade friction in Asia initially.  A lot of semiconductor manufacturing takes place in Taiwan, South Korea and Japan as is.  Those projections are likely very misleading as well, it's no secret that the Chinese government has been pouring an immense amount of money into the economy over the last year, if there wasn't an explosion of firms it'd be surprising.  How many of those companies are actually profitable or will remain standing without that support is debatable.  People have long been speculating that Greentech would be one of the next big bubbles, and that could be already starting in China.

 

However all that said it is a pretty accurate picture of how the Chinese government tends to approaches business.  This has been the real source for the erosion of jobs and manufacturing wages over the last 15 years.  Perhaps the biggest reason you can't compare the recession and recovery model to the 80's or 90's today is due to how big of players China and India have become on the global scale.  A huge part of what is today cheap manufacturing was behind the iron curtain during most of this time, or in the case of China just beginning market reforms (once they reached their current standing in the WTO things really took off).  On top of this you've had a steady stream of illegal immigration, which offers even more competition in the manual labor pool domestically.  Before anyone starts huffing and puffing about that being a race issue, it isn't.  Look back at history  and you'll find any period of large immigration was similarly met with opposition because of the effect it had on wages.  It happened with the Irish too.  In the past there was such outrage over it that the US government totally denied immigration from China via the Chinese Exclusion Act.  I bring this up because judging from the posturing that's been going on and seeing a Kennedy or all people making these claims about trade with China, gives a good indicator or the still looming specter of protectionism that was feared during this recession.  Though the President has been careful to pretty much placate China, I wouldn't rule out Congress passing something to defend jobs and unions in the US either.  Just something to consider.

 

Disclosure:  Experimental long play on ENER on CAPS.  No solar related portfolio holdings or shorts on Chinese companies.

 

Report this comment
#6) On November 21, 2009 at 11:46 AM, ajm101 (32.00) wrote:

hhasia - if you broke it down by person, the per capita GDP in the US is also 8 times higher than in China, too.  Looking at research dollars per capita makes no sense.

Report this comment
#7) On November 21, 2009 at 3:59 PM, devoish (98.18) wrote:

Abstact, thanks for the well thought out reply. I think you ar wrong about the manufacturing, many solar cells are made in China and there is no reason to believe they are not up to the task. 

From the most recnt 10q of GC China Turbine Corp (GCHT.OB) a hopeful manufacturer of less expensive, 2 blade wind turbines. Market cap to low for CAPS, this is wind power not solar.

Our
manufacturing facility is 36,000 square meters situated in the Donghu
Development District, Wuhan, China.  Currently we lease the land under
our facility.  There is no expiration date for the lease, which is
provided free of charge by the Administrative Committee of Donghu Development
District. We also lease our office facilities which is provided free of charge
by the Wuhan Donghu New Technology Development Co., Ltd.  Because our
facilities are provided by the government free of charge, we can be removed from
our location without notice or warning which could cause significant disruption
to our business and manufacturing process and add unplanned expenses for us to
relocate to new offices and facilities.  In the event we get evicted
from our current facilities and we are unable to immediately relocate, our
business, financial condition and results of operations will be adversely
affected.

and;

Our wind
turbines business is based on the assumption that wind power will become a more
significant source of power in the PRC and elsewhere. Although the government of
the PRC has announced a plan which contemplates a significant increase in wind
power in the PRC, at present wind power accounts for an insignificant percentage
of China’s energy needs, and we cannot assure you that wind power will ever
become a significant source of energy in China. Since our growth plan is based
on developing and providing equipment and components for that industry, our
business will be impaired if the market for wind power generation equipment does
not develop or if the market develops but our products are not accepted by the
market.

I have no position in this company because regardless of the free real estate and the Gov't created market for its products:

The
Company expects to continue to incur substantial losses as it executes its
business plan and does not expect to attain profitability in the near
future.  Since its inception, the Company has funded operations
through short-term borrowings and equity investments in order to meet its
strategic objectives. The Company's future operations are dependent upon
external funding and its ability to execute its business plan, realize sales and
control expenses.  Management believes that sufficient funding will be
available from additional borrowings and private placements to meet its business
objectives including anticipated cash needs for working capital, for a
reasonable period of time.  However, there can be no assurance that
the Company will be able to obtain sufficient funds to continue the development
of its business operation, or if obtained, upon terms favorable to the
Company.

But, the point is, despite urgings to the otherwise, it is far past time for American leadership to stop pretending free market competition exists. This company gets a manufactured market, and a free factory, I guess because lower labor costs are not enough to make them competitive. And I have no problem with what the Chinese Gov't is doing to further the living conditions of their citizens. My issue is with the USA being to chicken to step up.Potentially an American company could have lower cost manufacturing processes and labor, and still not be able to compete on price.

I believe America has given electrical power producers long enough to recognize the conditions for fossils fuels are ending. Those companys that have chosen to deny the environmental costs of their product and not helped developed renewable programs deserve to go the way of the buggy whip.

Report this comment
#8) On November 21, 2009 at 5:15 PM, AbstractMotion (54.03) wrote:

Hypothetically it'd probably be cheaper for the government just to buy turbines from China at a cost to the Chinese government if that's the case.  Then again as it stands GC China Turbine Corp seems to be primarily involved in the real estate business at present.

 

Report this comment
#9) On November 21, 2009 at 6:07 PM, devoish (98.18) wrote:

Hypothetically, yes. if you do not include unemployment, food stamps and medicaid.

I don't think Robert F Kennedy is "a Kennedy".

Report this comment
#10) On November 21, 2009 at 6:37 PM, AbstractMotion (54.03) wrote:

Looks like the same Robert F Kennedy Jr to me....

Report this comment
#11) On November 21, 2009 at 8:07 PM, ChrisGraley (29.81) wrote:

I wouldn't take anything GCHT.OB too seriously...

UltraLong (100.00) Submitted: 11/5/2009 5:08:29 AM : Start Price: $3.74 GCHT.OB Score: +15.87 Oh my god.... where to begin.....

On Aug 25th, 2006 they incorporated in Nevada as Visa Dorada

On Aug 31st, 2006 they must've noticed a typo and changed their name to Vista Dorada

On June 15, 2009 they changed their name to Nordic Turbines

On Sept 3, 2009 they changed their name to GC China Turbine

Seriously? WTF? Are these board directors 3 years old or are manatees in a pool picking these names out of a bowl?

"We are the registered and beneficial owner of a 100% interest in the Mocambo Gold Claim (the "VDC Claim") situated in the Republic of Fiji. We acquired the VDC Claim for the sum of $5,000 from EGM Resources Inc., an unrelated third party vendor, by an agreement dated March 4, 2007. To date, we have not conducted any exploration work on the VDC Claim and we have not generated any operating revenues since inception."

Translation: It just looked really nice so we bought it!

"Subsequent to our fiscal quarter ended June 30, 2009, on July 20, 2009 and as amended and restated on July 31, 2009, we entered into a financing agreement (the "Financing Agreement") with Luckcharm Holdings Limited, a Hong Kong company ("Luckcharm"), GC Nordic, Ceyuan Ventures II, L.P. ("Ceyuan LP"), Ceyuan Ventures Advisors Fund II, LLC ("Ceyuan LLC") and NewMargin Growth Fund L.P. ("NewMargin") whereby we agreed to lend Luckcharm (i) $2,500,000 before July 24, 2009 and (ii) $7,500,000 before July 31, 2009. In order to guarantee our lending obligations under the agreement, NewMargin agreed to lend $5,000,000 and Ceyuan LP and Ceyuan LLC agreed to lend the aggregate of $5,000,000 of the above amounts to us. Upon the consummation of the Merger (as defined below), the $10,000,000 loan made to us by NewMargin, Ceyuan LP and Ceyuan LLC will be converted into shares of our common stock at a conversion price equal to $0.80 per share."

Translation: Ok ok...so you give the money to me, right...then I pass the money along to them...got it, and it makes it look like im loaning money to them... right, and then we convert that money into shares... uh huh... I think thats called money laundering?

"During the three and six month periods ended June 30, 2009 and June 30, 2008, we earned no revenues from operations."

Translation: But we have a really nice garden bed in Fiji!

"During the three and six month periods ended June 30, 2009, we incurred total expenses of $41,363 and $41,364, respectively, as compared to $7,169 and $16,86 for the three and six month periods ended June 30, 2008. The increases in expenses were related mainly to investor relations expenses, legal fees and interest expense. Expenses or other cash flows in this period may not be indicative of future periods as we are in the early pre-exploration stage."

Translation: What investor relations??? And what are they planning to explore? The flower bed they bought in Fiji???

"As of June 30, 2009, we had $nil cash and working capital deficiency of $1,085,597."

Translation: I love it when a company describes their cash position as nil....

"At the closing of the Exchange Transaction the Company issued 32,383,808 shares of its common stock to the sole stockholder of GC Nordic Group for 100% ownership of GC Nordic Group. US$ 10,000,000 in previously issued convertible promissory notes was converted into 12,500,000 shares of the Company's common stock. Immediately prior to the Exchange Transaction, the Company had 7,686,207 shares of common stock issued and outstanding. Immediately after the Exchange Transaction and notes conversion the Company has 52,570,015 shares of common stock issued and outstanding."

Translation: Holy Crap!!! Dilution much?

GC Turbine or whatever the hell they want to call themselves can knock themselves out trying to find a niche sector to work in but they still wont make a dime!

UltraLong

I'm getting ready to red thumb them yet again

Report this comment
#12) On November 21, 2009 at 9:53 PM, devoish (98.18) wrote:

I wouldn't take anything GCHT.OB too seriously...

You mean except when they said they were not planning to make money.

Report this comment
#13) On November 21, 2009 at 10:41 PM, devoish (98.18) wrote:

Currently, the United States is falling behind in the global market for solar technology, as other countries provide incentives to invest in solar manufacturing. According to the Solar Energy Industry Association, the U.S. produced more than 40 percent of the world’s solar photovoltaic (PV) cells a decade ago. In 2008, the U.S. produced only 5 percent of the world’s solar cells. As a result, U.S. Congressman Gabrielle Giffords (D-AZ) authored the Solar Technology Roadmap Act, which is designed to support domestic research and development (R&D) and manufacturing.

Currently, a 30 percent federal Solar Investment Tax Credit (SITC) exists for the investment in or installation of solar power technology, which was extended in the Recovery Act. Under the Solar Manufacturing Jobs Creation Act, equipment and facilities used to manufacture solar power technology would be included in the property list for the SITC. These technologies include solar cells, silicon, evacuated tubes, and flat-plate solar collectors. It has been estimated that the tax credits in this legislation will generate 315,000 new domestic green jobs.

Although China produces over 30 percent of the world’s solar photovoltaics, installed PV in China only reached a total of 140 (megawatts) MW in 2008, according to the state-owned newspaper, China Daily, accounting for less than 1 percent of the global market share. Today, however, solar PV is starting to increase its share in China’s energy portfolio due to favorable government support, decreasing solar power generation costs, and rising demand in response to emerging regulations ongreenhouse gas emissions. In fact, China recently revised its 2020 target for solar power capacity from 1.8 gigawatts (GW) to 20 GW, according to a recent report by Beijing’s state-own China Daily.

link

Report this comment

Featured Broker Partners


Advertisement