Friday, July 5, 2013

China Retaliation on French Wine - All Hail Chinese Dumping!

In one of those crazy things where bureaucrats ruin business, the welfare queens in Europe, as in USA, get heavy subsidies for solar panels.  The subsidies are not enough to beat Chinese superiority, so the bureaucrats are making trouble for Chinese exports of solar panels to Europe.

Now, this is how the game is played: one one country begins to make noise about some complaint, then the other country looks at the value in question, and retaliates in kind.  In this instance the French market for wine in China is the same size and the Chinese solar panel market in France. So, voila! the Chinese pick on French wines as France picks on Chinese solar panels.

Now, the hysteria in France over solar panels is because the people at the top get payoffs and sex and whatever else to prefer one business over another, to advocate for one system over another.  In any event, the powers that be make bad decisions.

So what if China is dumping solar panel displays in Europe (or USA, for that is in debate too).  If they want to make panels cheaper than we can, if they want to lose money on the things, then USA and French makers ought to cease production and become importers and make profits until the Chinese cannot stand the losses anymore.  Does anyone think through these things?  I guess not when you can always depend on a bail-out.

The real money in solar panels is the installation.  And installation is local, tax-paying small business. And when installed, less paid for energy is money available to spend on other goods and services.  Starting a trade war over solar panels is nuts, but the bureaucrats who start these suffer no consequences for their acts.  We should all welcome countries "dumping" product in our country, like Christmas presents.

Feel free to forward this by email to three of your friends.


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