Seeing the role of visible hands from the "photovoltaic crisis"

Local governments frequently use the tangible hand to intervene and influence corporate decision-making, and the relevant functional departments lack the necessary restrictions and constraints on local government intervention, which has become an important obstacle to economic restructuring and transformation.
If the government really wants to guide the economy, then it should work harder to create a good investment environment, improve the legal system, and strengthen macroeconomic regulation. The improvement of the investment environment is by no means the various preferential policies and financial support that local governments are now taking.
The tangible hand of the government can only reach the market if the invisible hand of the market is difficult to function or if certain problems arise. Otherwise, disorderly intervention in the market will have an adverse impact on the normal operation of the market and affect the stability of the market order.
However, it is this simple and easy-to-understand principle that is often understood and used by local governments in practical work, so that economic development is also under the unwarranted intervention and blind accusation of the government’s visible hands. Need to detour, circle, pay the price.
In addition to the changes in the economic environment, the rise of trade protectionism, and the containment measures adopted by developed countries in Europe and the United States to the development of China's emerging industries, the "photovoltaic crisis" has largely failed to use the tangible hand with the government. There is a close relationship between excessive constraints and intervention in the role of the market.
As we all know, the photovoltaic industry is a new industry that has just started and has just been recognized by the outside world. It can even be said that most people have not really understood what the photovoltaic industry is. However, in China, there has been a phenomenon of overcapacity. Although this excess is not absolute, with the improvement of economic development level and the increasing awareness of energy consumption by all sectors of society, the development prospects of the photovoltaic industry are very broad and the production capacity will be further expanded. However, as far as the front is concerned, the photovoltaic industry has indeed experienced overcapacity. To a certain extent, it can also be described as "serious excess."
It is also because of the relative surplus of production capacity and the obvious weakness of PV companies themselves, such as excessive cost, low conversion rate, and excessive investment, which has become the "soft rib" of the implementation of sanctions and trade protection in developed countries in Europe and America. The "double-reverse" "killer" has made China's PV companies, which have already lived very difficult and not easy, even worse, and it is difficult to survive.
In the face of such an outcome, we can of course accuse the developed countries of Europe and the United States of being immoral, and can also use the rules of world trade to compete with them and fight against them. However, what is left to China and its PV companies is a series of "why." Why is there a phenomenon of overcapacity in a short period of time, why developed countries in Europe and the United States will implement a "double-reverse" policy on Chinese PV companies, why they will become helpless in the face of "photovoltaic crisis", and so on.
In fact, similar to the "double-reverse" policy of the photovoltaic industry, in recent years, Chinese companies can be said to have become accustomed to, tires, paper, communications, etc., have been "double-reverse". However, no one has a “crisis” like the photovoltaic industry, and no such company like the photovoltaic industry has fallen over a large area. The reason is that although these industries also have certain problems of overcapacity and excessive foreign dependence, in general, these industries are gradually accumulating and gradually developing in the market competition according to the requirements of the market economy. Strong market adaptability and ability to cope with various risks and crises. On the contrary, from the perspective of the development of the photovoltaic industry, under the big hat of “emerging industries”, most of them started and developed under the administrative promotion of local governments. There is no gradual development process in line with market rules, and there is no market. Adaptation and familiarization process.
Take Jiangxi Saiwei and Wuxi Suntech as examples. Two leading enterprises in China's photovoltaic industry, which had never been infinitely beautiful, have had a crisis from the start to the present. There is no time to flash the shadow of the government, and no time is not the government. The hand pushes forward and pushes blindly to expand. Without the “help” of the government, these companies cannot develop so quickly, and it is impossible to form such huge debts in a short period of time.
To be honest, although Savi and Suntech are caught in huge debts, they are at risk of bankruptcy at any time. However, compared with those small and medium-sized PV companies that are also in trouble and are also facing bankruptcy risks, after a few years of good times. In China, if you have a good day, you will encounter a "cold winter", a company that has fallen into desperation, has died or is awaiting death, and it is everywhere. Using market vision to analyze and judge, these companies were originally a "dead fetus", the day of birth, the time of death.
Now, in the face of the general difficulties of photovoltaic enterprises, especially the once-famous enterprises face bankruptcy, the local government once again extended its visible hand in an attempt to rescue the photovoltaic enterprises from the crisis.
We do not think that there is anything wrong with this move. This can also be seen as a means of government regulation and intervention in the economy. The key is that in this context, can the government bring photovoltaic companies back to life? Can it change the overcapacity situation in the photovoltaic industry? If the surplus problem is not resolved, the government's rescue will only make the development of this industry more disorderly, more incompatible with market rules and requirements, and make it difficult for the internal power of the enterprise to be fully utilized. Because many companies can survive, largely relying on government policy support. If there is a problem and there is government rescue, who will consider the competitiveness and innovation of the company itself? This undoubtedly sent a very bad signal to other companies.
Local governments frequently use the tangible hand to intervene and influence corporate decision-making, and the relevant functional departments lack the necessary restrictions and constraints on local government intervention, which has become an important obstacle to economic restructuring and transformation. In addition to the photovoltaic industry, in the steel, cement and other industries, the problem of overcapacity has not only been solved, but the contradiction has become more acute. One of the main reasons is that the local government has boosted the enterprise through policy incentives and financial support for political achievements. The wind of blind investment. If scientific, appropriate, reasonable, and standardized policy support is a good medicine for enterprise development, most of the current preferential policies and financial support have become poisons. Not only have they not supplemented the required nutrients, but they have accelerated. The loss of corporate nutrition. If these "nutrition" can be placed in enterprises that must be transported, such as small and medium-sized enterprises, the entire economy will not be able to have such a pattern today, and there will be no serious overcapacity and serious structural irrational problems.
We must also fight back against the trade protection behaviors of European and American countries. However, at the same time, we should reflect on and review the problems existing in our own countries. In particular, the government’s excessive administrative intervention in enterprises has indeed been resolved. It's time.
China's market economy has also been implemented for many years, and the government should continue to mature and grow up. If the government really wants to guide the economy, then it should work harder to create a good investment environment, improve the legal system, and strengthen macroeconomic regulation. The improvement of the investment environment is by no means the various preferential policies and financial support that local governments are currently adopting. It is not acquiescence to the illegal construction of enterprises, the failure to report first, and the construction of borders. If so, the distance from the rule of law government will only be farther and farther, and the distance from the real market economy will be farther and farther.
China's economic development needs to go through the process of “growth troubles” and it also needs to pay a certain price. But such troubles and costs should be effectively reduced, not continuously, under the government's actions.

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