China's Solyndra?

Money for clean energy is creating political messes all over. Of course, there are the Obama administration's ongoing troubles over loans to now-bankrupt solar manufacturer Solyndra. Now comes a report from Reuters saying that green energy loans to bolster China's businesses may be in danger of defaulting, due to falling demand from Europeans, their biggest customers.

From the report:

State banks provide easy loans to the sector amid the Chinese government's push to develop clean energy. Provincial governments that have helped build solar companies are also pressuring banks to continue lending, which may add to the woes of the struggling industry.

The glut of production and swelling inventories of the panels that turn sunlight into electricity have already driven down prices by about 40 percent so far this year. Analysts expect prices to slide by another 10 percent by early next year.


"Over the next six months, there won't be profits to be made," said CLSA's solar analyst Charles Yonts. He expects some companies to start defaulting on loans and put themselves up for sale.

"Balance sheets across the solar sector are already stretched to breaking."

This comes on top of other setbacks for China's green energy aspirations this year. In September, the Chinese had to shut down a solar panel plant following protests against the its pollution. Other economic concerns including the rising number of "ghost cities" amidst the Chinese property bubble, are rattling the markets and prospects for growth.

The Guardian reported in September that in 2010, the China Development Bank gave out nearly $30 billion in loans to the top 5 manufacturers of solar panels.  Several weeks ago, industry groups representing the U.S solar industry raised concerns to the U.S Commerce Department about possible dumping by Chinese manufacturers.

Despite the concerns, Chinese Vice-Premier Wang Qishan announced a $1.7 trillion "strategic investment" today, which included money to be directed towards the alternative energy fields. Questions on how the banks will manage more green energy loans on their balance sheets still remain unanswered.

After all, as the in the U.S. case, a certain number of failures are inevitable in an alternative energy investment this big.  And it's not as if Wang has to go in front of Congress to explain himself every time one of these deals doesn't work out.

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Herman Cain commits his foreign policy to writing

On the campaign trail, Republican presidential candidate Herman Cain consistently distills his foreign policy philosophy to "peace through strength and clarity," a twist on Ronald Reagan's "peace through strength" mantra. But he raised doubts about his grasp of international affairs last week when he expanded on that stump speech line off the cuff.

First, in an exchange that went viral online, Cain bungled his response to a question about President Obama's Libya intervention (Cain called it a "thoughtful pause"). Then he was quoted as saying, "I'm not supposed to know anything about foreign policy" (Cain claimed he said "everything," not "anything"). And then he suggested that the Taliban might be part of Libya's new government - an assertion critics condemned as unfounded (a Cain spokesman pointed out that one of Libya's new military leaders fought with the Afghan Taliban). 

Now, it seems, the campaign is turning to the more dependable written word to try and break this sound bite-media tempest-campaign clarification cycle. In a column published late yesterday on Cain's site, the candidate summarizes his approach to foreign policy. "Peace through strength and clarity means there is no doubt about where we stand, for what we stand and with whom we stand," he explains. As an example, he cites President Obama's decision to sign the New START treaty with Russia:

Not only did that treaty commit America to arms reductions that the Russians would not necessarily have to match, but it permitted them to maintain a sizable advantage in tactical nuclear weapons, while ignoring programs and ambitions of other nations like Iran, North Korea, China and Pakistan. But more to the point, we simply don't need to be signing treaties like this with unfriendly countries.

Cain suggests that Obama has spurned allies such as Israel and Great Britain while naively extending an olive branch to American opponents such as Iran and Venezuela. He compares his foreign policy views to those of Obama's predecessor:

I agree with former President George W. Bush that the United States should promote free democratic movements throughout the world, and that it is in our strategic interests to do so. That does not mean we try to "impose democracy at the barrel of a gun," as some of Bush's rather disingenuous critics claimed he was doing. It means we support these movements where the opportunity presents itself (as President Obama should have in Iran and Syria) or when strategic necessity compels us (as I believe President Bush correctly did in Iraq in 2003). And you don't always have to use force.

Cain also rejects claims that his stumbles last week render him unfit to be America's commander-in-chief and that he flaunts his lack of foreign policy experience:

I think it's clear by now that I am not going to score the best of all the candidates on media pop quizzes about the details of current international events. Some have claimed that I take some sort of perverse satisfaction in not knowing all these details. That is not true. I want to know as much as I can. But a leader leads by gathering all the information available in a given situation, and making the best decision at the time based on that information, and in accordance with sound principles. As president, I would not be required to make decisions on the spur of the moment based on a question from a reporter. I would make them the way I made them as a CEO -- based on careful consideration of all the facts and the best advice of the best people.

Might there be a "it's 3 am and Herman Cain is still deciding" attack ad in the offing?

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