LDK Solar Debt Repayment a Troubling Escalation of Green Mercantilism

July 20, 2012

Reports that struggling Chinese company LDK Solar will have at least part of its debts paid by the city – Xinyu in eastern Jiangxi province – in which it is based. The company is the world’s second largest maker of solar wafers, but has been hit hard by an ongoing solar technology supply glut that is ironically being exacerbated by China. As a result, LDK owed $79.4 million in loan debt to Huarong International Trust Co. at the end of 2011. Yet while Xinyu’s decision to help repay LDK’s loans may be good news for the company, it is very troubling news for opponents of China’s mercantilist policies.