China's ten largest solar photovoltaic enterprises have accumulated upwards of 111 billion yuan($17.5 billion)in debt,recent data from U.S.financial services company Maxim Group shows.
China's solar industry is mired in a crisis,facing anti-dumping measures from the United States and reduced imports from Europe,according to the 21st Century Business Herald.
"The output of Chinese PV products has increased in recent years.But the European debt crisis and anti-dumping complaints have continually driven down prices,squeezing profits,"said Meng Xianjin,vice president of the Chinese Renewable Energy Institute.
"The sector's gross margin was 30 percent in 2010,it decreased to less than 10 percent in 2011,and the situation is even worse this year,"Meng points out."Companies'gross margin should be maintained over 10 percent,or they have a deficit."
Beijing recently announced it will launch a 70 billion yuan plan to rescue the industry.
State-owned banks have been offering large loan packages to indebted solar enterprises,and on Oct.26,China Development Bank gave a 200 million yuan loan to Suntech Power Holdings Co Ltd(NYSE:STP),the world's largest solar panel maker by capacity.
LDK Solar Co.,Ltd(NYSE:LDK),the world's second-largest solar wafer maker,has received a fresh injection of about 700 million yuan($112.07 million).The move came just three days after the state-backed Heng Rui Xin Energy acquired a 19.9 percent stake of LDK for around 23 million U.S.dollars.
China's PV industry has long been suffering from excessive inventories and cash flow shortages,although the country is the world's biggest maker of solar panels,with a$37 billion global market.In the face of the current global economic woes,most Chinese PV companies have suspended production for the year.
