According to Hannah Miao of The Wall Street Journal, Xinte Energy, a Chinese solar panel supplier, faces losses of 4 billion yuan ($500 million) in 2024, reflecting broader struggles in China’s economy. Overcapacity, weak demand, and competition are hitting various industries, while U.S. tariffs add more pressure. Despite some profitable tech companies, the domestic economy remains weak, and recovery efforts have been insufficient. Miao writes:
Xinte Energy, a Chinese green-energy firm, says on its website that it is “delivering light and warmth to every corner of the world.” It is also losing tons of money.
The maker of polysilicon, a building block for solar panels, recently told shareholders it expects to report losses of around 4 billion yuan, equivalent to more than $500 million, for 2024. Intense pressure by the government to build up key industries has led to fierce competition and price wars while demand has stalled, hitting the company’s bottom line.
Unfortunately for China, it isn’t just the solar power industry. Companies across the country are bleeding cash as they struggle with overcapacity and weak spending in a slumping economy. […]
While new U.S. tariffs add to the headaches for China, some investors and analysts say problems at home are more pressing. Most of the revenue of public companies listed in mainland China is derived domestically.
“People might be overly worried about tariffs,” said Nicholas Yeo, head of China equities at abrdn, a U.K.-based investment company. “It is the domestic economy that needs to be fired up.”
Read more here.
