Solar sector hopes for spending, policy benefits

Companies in many industries are looking forward to China having a new stimulus plan, although the government said on Wednesday that any program won't be a repeat of the huge package adopted in 2008.

One of those industries is the solar energy.

"We hope that solar programs can be included if the nation is going to launch a new fiscal stimulus," said Zhang Jianmin, senior manager of the CEO's office of Suntech Power Holdings Co Ltd, the world's biggest solar panel manufacturer.

Solar energy was not included in the 4 trillion yuan ($630 billion) stimulus package adopted by the central government in 2008. But amid a sluggish global market, Chinese solar companies hope that policies from the central government will boost their domestic market.

Zhang said if there is no direct fiscal support, it will still be helpful if authorities would clarify policies for the industry.

Although Chinese manufacturers account for 60 percent of the solar industry's global output, the use of solar power within China is not widespread.

"It will definitely boost the industry if the central government (prepares) policies that will integrate more solar-generated electricity into the grid, or if it encourages the construction of off-grid solar power stations," he said.

Analysts began to expect another round of economic stimulus after growth slowed in the first quarter of the year and Premier Wen Jiabao vowed to put growth in a "more important position".

The National Development and Reform Commission has accelerated the approval of industrial investment projects, including a massive steel plant in Guangdong province.

Tao Dong, a Hong Kong-based economist with Credit Suisse Group AG, wrote in a research note that the stimulus will probably be as much as 2 trillion yuan. NDRC officials on Wednesday denied that there will be any large-scale stimulus.

Zhou Dewen, chairman of the Wenzhou Small and Medium-sized Enterprises Development Association, said he believes another big plan, like the one in 2008, is unlikely to be passed.

"The 4 trillion yuan package actually was both good and bad for the economy. Most of the capital and bank loans went to State-owned enterprises, while private companies were severely hit, which upset the balance of the economy," he said.

"I believe the activation of private capital will be the next powerful stimulus to the economy," he added, noting there is more than 2.5 trillion yuan in private capital just in Wenzhou, one of the hubs of the private economy.

The central government has issued documents recently that encourage private capital to enter traditionally State-dominated industries such as banking, railways and non-profit medical institutions.

Zhou urged the authorities, including the China Banking Regulatory Commission, to do more to clarify the rules.

"We do not expect any special treatment, but we dreamed fairness to compete with State-owned companies," he said.

Gao Changxin in Shanghai contributed to this story.

xieyu@chinadaily.com.cn

(China Daily 05/31/2012 page13)