From Renewable Energy World:
As Jin Baofang, the Chairman of the Board of the Jinglong Group, a Chinese solar energy company and a delegate to the National People's Congress, recently said of the relationship between the Chinese economy and the economies of large consuming nations: "when nations that are large consumers sneeze, our manufacturers immediately catch a cold."
The worldwide financial crisis has laid bare the unhealthy symbiotic relationship between the Chinese and Western economies. The unsustainable economic model that had Western countries (most notably the U.S.) buying cheap, labor-intensive exports from China with funds borrowed from the Chinese has collapsed. Consequently the West (and particularly the U.S.) will have to reorient its economies to produce and save more and consume less while China will have to restructure its economy so that it relies less on exports and increases domestic consumption to maintain its impressive GDP growth.
The Chinese solar power industry is a case in point, reflecting (no pun intended) China's unhealthy dependence on exports and the prospects for renewed growth as the Chinese government adjusts its model for economic growth.
In the words of Shi Dinghuan, an advisor to the State Council and Chairman of the Board of the China Renewable Energy Society, the new energy industry in China that has suffered the most from the worldwide financial crisis is China's solar industry. Through the end of 2008, China had become the world's largest producer of photovoltaic cells, but because approximately 98% of sales of PV products were exports, when financing became tight worldwide, orders for PV products from China were widely cancelled, particularly from the three largest consumers of Chinese solar power products: Spain, Germany and Japan....MORE
*We first posted on the outperformance with "A Bifurcated Market in Solar Stocks (ENER; FSLR; LDK; SPWRA; TSL; YGE)"
Five day chart via Yahoo Finance: