Essay by Eric Worrall
Has President Trump’s withdrawal of Biden era renewable subsidies killed the Chinese economy?
Chinese PV Industry Brief: Major solar manufacturers report steep full-year losses
JA Solar, TCL Zhonghuan, JinkoSolar, Trina Solar and Daqo each announced significant losses for full fiscal year 2025 amid continued price declines and overcapacity.
JANUARY 16, 2026 VINCENT SHAW
JA Solar forecast a full-year net loss attributable to shareholders of CNY 4.5–4.8 billion ($619–660 million) for 2025, … It attributed the loss mainly to supply-demand imbalance …
TCL Zhonghuan said it expects a 2025 net loss of CNY 8.2-9.6 billion ($1.13–1.32 billion), versus a CNY 9.818 billion loss a year earlier. …
JinkoSolar released a notice indicating it also expects a full-year loss for 2025, without providing a range. …
Trina Solar likewise said it expects to remain in the red for 2025; …
Polysilicon producer Daqo New Energy said it anticipates another full-year loss in 2025 …
…
Read more: https://www.pv-magazine.com/2026/01/16/chinese-pv-industry-brief-major-solar-manufacturers-report-steep-full-year-losses/
2025 was a bad year for natural disasters in China.
China suffered $35B losses in natural disasters that killed 763 in 2025
Natural disasters affected nearly 67M people, displaced 3.6M nationwide, says Emergency Management Ministry
Berk Kutay Gokmen |16.01.2026 – Update : 16.01.2026
China suffered direct economic losses of 241.6 billion yuan ($34.7 billion) from natural disasters in 2025, which also caused 763 deaths or missing persons, the Ministry of Emergency Management said on Friday.
…Besides floods and geological disasters, the ministry noted that droughts, low-temperature freezing and snowstorms, sandstorms, forest and grassland fires, marine disasters, and biological disasters also occurred to varying degrees across the country.
Read more: https://www.aa.com.tr/en/asia-pacific/china-suffered-35b-losses-in-natural-disasters-that-killed-763-in-2025/3801192
But there are deeper issues with the Chinese economy – a lot of private Chinese companies appear to be borrowing unsustainable amounts of money to cover losses, in an apparent effort to maintain market share at any cost.
China debt overhang leads to rising share of ‘zombie’ firms
J. Scott Davis and Brendan Kelly
December 23, 2025…
There is mounting evidence of “zombie lending” in China, banks rolling over bad loans to unprofitable firms and allowing the status quo to continue rather than recognize losses.
In many ways the current experience in China mirrors that of Japan in the 1980s and 1990s. Rapid growth in private sector debt—also fueled by domestic savings—was followed by the appearance of zombie lending. In Japan, that zombie lending led to the inefficient allocation of capital and decreased productivity, especially in sectors shielded from foreign competition.
…
There is a downside to the reduced risk that comes from domestically financed debt. Chinese capital controls mean savings are largely captive. Notably, Chinese authorities aggressively tightened capital outflow controls in 2016 when the country faced significant balance-of-payments stress.
Captive savings mean state-owned banks face little funding pressure. As loans come due, banks can easily roll over loans to unprofitable and otherwise insolvent companies to avoid recognizing loan losses on their balance sheets.
Such zombie lending was observed in Japan in the 1990s. Like China in the years after the Global Financial Crisis, Japan experienced massive growth in private sector credit in the 1980s.
…
Read more: https://www.dallasfed.org/research/economics/2025/1223
China appears to have a cultural problem with managing bad debts. While there are ongoing government attempts to strengthen bankruptcy processes, Chinese culture appears to encourage collaboration rather than adversarial style Western bankruptcies.
Excessive avoidance of bankruptcy procedures appears to be causing capital stagnation and heavy losses. Instead of forced selling assets of bankrupt companies, liberating their assets and workers for more profitable economic activities, insolvencies in some cases are allowed to linger far longer than would likely be tolerated in Western countries.
Of course it is difficult to obtain accurate information about the extent of such practices – parties involved in a bad debt coverups don’t exactly advertise what they are doing.
Did President Trump kill the Chinese economy by cancelling Biden era renewable subsidies?
My theory based on evidence like the quotes above is the Chinese economy was already sick before President Trump 2024. I believe a large chunk of the Chinese economy, likely including the EV and renewable sectors, is being propped up by banks rolling over and concealing bad debts. Even Chinese human rights abuses like allegations of widespread use of slave labor have failed to restore profits.
I believe Chinese banks are concealing massive capital losses, by enabling insolvent private companies to roll over unpaid debts, and allowing those companies to maintain a facade of solvency, while those insolvent businesses quietly haemorrhage cash on every sale.
There is an old saying, “If you owe the bank $100, you have a problem. If you owe the bank $1,000,000, the bank has a problem”. Having committed to propping up insolvent companies, the banks themselves are likely just as insolvent as the companies they are propping up.
Where is the cash coming from to continue this charade? The only plausible source of the money being used to prop up this large scale fraud is plundering the savings accounts of ordinary Chinese people.
So to answer my question, Trump did not kill the Chinese economy. The Chinese economy was already on Ponzi scheme life support well before Trump 2024. Even if every penny of Biden’s deceptively named Inflation Reduction Act had been poured into the hands of Chinese renewable manufacturers, the green subsidy money would have disappeared into the black hole of China’s still largely concealed debt and solvency crisis, without any noticeable impact on China’s economic problems.
The Chinese solar producers may be losing money- but China will keep them afloat in their battle to hoodwink western nations in order to destroy their economies. The long game.
All good. Now that Xi and Carney have “partnered” maybe we’ll see lots of solar in the Great White North, along with cheap Chinese EV’s. Wonder if the hydro power spigot will be turned off to New England and NY. Gonna need to charge those disposable things.
Solar north of 50º. Yep that will work.
Its been an old fashioned winter here in Wokeachusetts- probably the same in Canada. I hope anyone there with an EV has a heated garage.
It is -20° C in Saskatoon.
Western economies are China’s best costumers for everyday goods such as textiles and shoes. China requires a large positive balance of trade for purchase of oil and basic agricultural commodities such as wheat and soybeans
Yes, China wants to earn foreign money to buy oil, coal, and other resources, but that’s not what a positive balance of trade does, that’s what selling exports does. The balance of trade is a nonsense concept in the first place, since dollars (or yuan) in (selling exports and foreigners investing in China) have to equal dollars (or yuan) out (buying imports and investing in foreign countries.
The balance of trade is nonsense because the figure usually quoted is asymmetrical, counting either goods only, not services, or leaving out foreign investments.
It is even worse nonsense when calculated between pairs of countries (which you are NOT doing, but a lot of politicians do) in a world of 100-200 trading partners. If country A buys spoons from country B, which buys forks from country C, which buys knives from country A, they all have massive balance of trade deficits or surpluses depending on which country pair you compare.
Its real to those blue collar workers who lost their jobs to China or Mexico.
It’s no more real to anybody than Tinkerbell. You can’t wish 2+2=5 into being true by clapping your hands — or stomping your feet.
You really ought to pay attention, for starters. You’re whining about China stealing US jobs. Besides being as false a fable as Tinkerbell, that’s not the subject of the original post or mine; fictitious trade balances are, and they have nothing to do with tariffs.
ETA: There’s a simple way to know the US hasn’t lost manufacturing jobs: the manufacturing unemployment rate is below the overall unemployment rate. In plain English, manufacturing is having more trouble hiring than everybody else.
I pretty much agree about balances of trade being the useless whipping boy of economic policy terms but state subsidized steel for example has absolutely caused job losses around the world in basic manufacturing and should help high cost power rates kill European auto manufacturing in the next 10 years. For profit entities can’t sell below cost as long as governments printing money.
China didn’t steal the jobs. Western companies moved their production there for the cheap labor. Many economists said that’s great- that China would get rich then buy Western products, but they haven’t.
China is making a concerted effort to monopolize industries like shipbuilding and to amass reserves of raw materials to use as economic leverage over ROW. I personally don’t think they will prevail because as commies they are economic illiterates but as we see with rare earths they can temporarily cause problems.
Trump taking over Venezuelan oil will increase the cost of oil to China by about 30 percent. That is the size of the discount Maduro gave China.
So, 400,000 barrels of oil from Venezuela to China just increased by 30 percent.
Iran sells China about 1,400,000 barrels a month at the same 30 percent discount. If Trump gains control of Iranian oil output, the price to China will increase.
And I agree with the author that China was having serious problems before 2025.
“Has President Trump’s withdrawal of Biden era renewable subsidies killed the Chinese economy?”
Hardly. Renewable equipment is a small part of their economy, and the US was always a small part of their market. Renewables there are powering ahead. From Eric’s link:
“State Grid of China released its investment plan for the 15th Five-Year Plan period (2026–2030), projecting average annual additions of around 200 GW of wind and solar capacity across its service territory. The utility said it aims to lift the share of non-fossil energy consumption to 25% and raise electricity’s share of end-use energy consumption to 35%, while supporting the rollout of “zero-carbon” factories and industrial parks and enabling access for 35 million charging points. State Grid expects fixed-asset investment of about CNY 4.0 trillion over the period, up around 40% from the previous five-year plan.”
What strange times when the believer becomes the denier.
Nick seems to believe socialism can work. I think he just stopped believing in the tooth fairy and homeopathy.
China has made a lot of progress.
Yeah, from Maoism to mutant fascism.
Well, they are building a boatload of new coal fired power plants ….
Sssshhhh!
You’re not supposed to mention that coal & nuclear dispatchable electricity supply in China are leaving solar in the shade.
(so to speak 🙂 )
Over 300GW of Coal Capacity to be built between now and 2030.
Wind and Solar combined are only projected to be 200GW by 2030 but capacity factors will limit their actual generation to around 50GW with Solar producing ZippoWatts between 4pm and 8am with nowhere near nameplate except between 10am and 2 pm on sunny days.
Mao set a pretty low bar. They can enslave Uighurs and only kill a few thousand dissidents and still come out looking fresh as a daisy in comparison.
For instance, they’ve become number one in the involuntary organ donation trade.
China is rapidly reverting to an impoverished peasant economy as Xi re-imposes Maoism.
Nick believes every stupid thing somebody tells him to post, he’s an expert in all things, and l view it the same as l would any diagnosis from Freud, or a Jim Carney stock recommendation, or a Paul Krugman peediction.
Why is everybody always giving Nick down votes? He just posted informational facts and does not deserve down votes. He is a regular hard-working Aussie commenter here at WUWT. Nick, I got your back.
Thanks, Harold
Get a room, you two 🙂
My pleasure!
Nick’s quote might easily have been part of a WUWT article without comment. ie, the quote itself says it all: China is powering ahead with solar. Or maybe: China is powering with solar.
Unfortunately, or not,solar in China is going rapidly down the drain. After 3 years of frenetic expansion sponsored by the Government which elevated solar to a key industry for economic growth the last 18 months has seen over 40 companies go bankrupt and massive job losses.
How many solar farms in China are doing nothing but keeping the 50 Ghost Cities company?
Reuters reported last autumn that the world was producing twice as many solar panels each year as it was using with most manufacturing in China
Harold, did you know that Nick has a Wikipedia page?
https://en.wikipedia.org/wiki/Nick_Stokes
I’ll check it out.
Very funny. I don’t remember anything about CSI Las Vegas.
He has a blog with some very good data visualisations
https://moyhu.blogspot.com/
Yep. I dont agree with a lot of stuff Nick believes in wrt the climate and usually related to modelling, but when he posts factual statements whether climate or energy related, its always good to see the opposing factual side.
WUWT is tending towards “click-bait” bias these days. Again Eric intentionally missed important facts from his post. And more than a few of the vocal posters here vote in anger “because Nick” and not due to any reasoned argument.
I am just speculating, but it appears to me as soon as some see Nick is the author of a post, their finger automatically goes to the downvote button. I have found myself doing that very thing. However, lately I have been trying to not do that and to carefully consider what he is saying. That has resulted in less downvotes and even some upvotes from me. I don’t agree with him very often but I am willing to give credit where credit is due.
Because he has been exposed as slippery and mendacious on numerous occasions.
Mr. cat: On this occasion, his comment is slippery at best, it does not dispute the article, it’s a deflection.
Article- CCP reports bad news in solar sector, actual results.
Stokes- Five year plan says future looks bright, prediction not result.
Question- Did Mr. Stokes look up the five-year-plan from five years ago? Did CCP’s plan predict this collapse?? If not, why rely on it now??!!
Nick’s post directly quotes from Eric’s first reference. Eric cherry picked the parts of the article that supported his argument and ignored those that didn’t.
Mr. Man: The author accurately cites an article that recent solar sales (actual “data”) are poor. Mr. Stokes cites a “five year plan” projecting future sales, looks like marketing chatter, but he buys it. IT IS STILL A DEFLECTION FROM THE ACTUAL RESULTS. Mr. stokes is so good at research, maybe he can look up that five-year-old five year plan. You didn’t look, either.
I don’t often feel the need for caps, but you brought nothing.
And did you confirm the results that you do want to believe through independent sources? The ones that Eric did quote in his article?
Because you clearly believe this part
The phrase “informational facts” is what is contested, not the informational part of the expression, but the claims of facts. Facts require verification and a single source does not self-verify.
See my comments below on what you and domestic Chinese buyers are getting with slave labor supply chains for solar. Sometimes advocacy comes with great human costs.
I worked for a Chinese energy firm for a few years. Like so many, they defaulted on bonds and screwed our entire U.S. office.
Par for the course. Count your fingers after shaking hands with a Chinese businessman.
CNOOC? If so, beat you to it. But not for any prescience about CNOOC bond repayment delay. Rather, from a common sense evaluation of the post Arab Spring survival odds of Nexen. After some surreal, cha ching, Dharhan, BCG work, I figured it was better to cash in than to spend the rest of the teens fighting with Halliburton over relative pennies and wondering if I’ll be part of the next M or A run off.
Interesting, China plans to add 200GW of Wind and Solar between 2026 and 2030.
Mr Stokes, did you know that China is expected to add significant coal power capacity between 2026 and 2030, with projections varying but pointing to potentially hundreds of gigawatts (GW) under current trends, despite pledges to control coal use; estimates suggest capacity could grow by 300 GW by 2030 from late 2024 levels
.
So 200GW of.Wind and Solar AND 300GW of Coal. Yep That’s China!
“So 200GW of.Wind and Solar AND 300GW of Coal.”
No. Read more carefully. 200 GW added per year. 300 GW over 5 years.
OK so 1000GW of Nameplate. If you split that 50% Wind and 50% Solar…
500GW solar still produces nowhere near nameplate even between 10am and 2pm (prime solar time) and nothing at all after 4pm.
So after 5 years that 500GW of Solar will generate an average of 90-110GW over an averaged 24 hour period, But will produce ZippoWatts when the power is needed most at Peak Demand.
Likewise the 500GW of Wind will only provide power 40% of the year so averaged out over 365 days will deliver maybe 200GW though will generate ZippoWatts if the wind isn’t Just Right. (And 60% of the year the wind ISN’T Just Right)
Reuters said last autumn that the world was manufacturing twice as many solar panels each year as it was actually using. Most of that manufacturing was in China. Who knows how many solar farms in China are doing nothing but keeping the 50 Ghost Cities company?
Powering Ghost Cities with Ghost Energy makes sense anyway.
Power no-one can use generated at a time no-one needs it to power cities no-one lives in. China in a nutshell
And which one comes closer to supplying nameplate capacity? Which one can stand alone?
What makes you think this is a wise investment?
Yes, they build cities no one lives in. Who uses the charging grid? And all those nasty coal plants to supply much of the power. Keep chanting the mantra.
As our Elton put it: …losing everything is like the Sun going down on me.
Ah, that brings back the 70’s.
I have seen accounts the CIA had full access
to Soviet accounting reports, and thus reported the Soviet economy was much better off than reality.
Socialist economies also suffer from what von Mises noted, that administered “prices” are largely information free. No one really knows what interest rates really are in the PRC, as they are “set democratically”, i.e. by fiat.
Yes! Socialism destroys prices, and that’s what keeps priorities realistic. Without prices, production is chosen by bureaucrats and measured in tons, not value. Thus the famous jokes about Soviet factories producing the largest screws they could, while other producers couldn’t get the smaller screws they needed.
A case in point: the colossal overproduction of Chinese electric vehicles mandated by CCP fiat rather than by market demand.
Any idea how many Chinese EVs are sitting in storage lots waiting to be sold? And what is the trend?
In the US there is an “average # days supply” metric based on sales rates per car model.
In accounting terms: are the EV makers “stuffing the channel”?
Google made a loss for their first three years.
Facebook made a loss for their first five years.
Amazon made a loss for their first seven years.
Clearly, they were zombie companies.
Banks should have wound them up, long ago.
Or maybe this article is in complete denial about the country with the largest manufacturing capability and the most patents each year.
I question whether or not a “start-up” such as Amazon and others fit the concept of a zombie company. Should we compare Shedeur Sanders with Brett Favre?
TCL Zhonghuan appears to have started in 1981 making knock-off cassettes.
JA Solar Holdings was founded in 2005.
Maybe compare them to General Motors or Ford. Could be, they will all recover.
They don’t… technically speaking. Most start ups lose money for the first 5 years. Zombie companies are ones that are already established and earning profits THEN start Going in the red…technically hemorrhaging money as they begin to die.
Ford is well established but their EV line is a Dawg and has become a Zombie Line though Ford is still stable.
I just clicked for an up vote but two down votes was posted. Why did this happen?
While you are reading the comment, others are voting but the screen isn’t updating. When you vote up or down then the screen updates with all the new votes counted. Obviously you are out of line, and you upvoted when the correct vote was a downvote. If you don’t correct your behaviour …..
I’ve always loathed the voting on comments.
If a comment gets lots of up votes it does not mean it is insightful. It means most people are not challenged by that comment.
If you get lots of down votes it doesn’t mean the comment is unjustified or unpleasant. It means that people find it difficult to assess with their own world view.
And sometimes, it doesn’t.
The comment scores are, at best, useless and often misleading.
I never downvote. I upvote if something is particularly insightful in comedic or mental nutritional value.
I do upvotes.
I don’t do downvotes. If I feel strongly about a subject, I’ll say something.
If I vote I only ever give an up vote, never a down one.
He could always change his Upvote to a Downvote by Down Voting twice
Because he writeth nonsense.
The system saw you coming, Harold.
It anticipates your every thought and action.
Does the WUWT AI Bot keep a file on me and sell my info to advertisers and companies? I have an ad blocker and never see ads.
I do hope you’re joking.
It’s called antitrust industrial behavior in western countries, and they pay billions in fines just thinking about harming competition. But governments apparently get a free hand to do it on a global scale.
Or maybe you need to learn the difference between private investors risking their own money for future gain, and government bureaucrats wasting taxpayer money and hoping to never make a gain, because that would show they have fulfilled their mission and are no longer necessary.
Many companies are unprofitable for their first 5 years or so…bless they provide a product that never existed prior and gains desirability quickly.
…
JA Solar has been around 20 years (since 2005) and is Now posting tremendous losses avert being established.
…
TCL Zhonghuan was originally founded as Tianjin Zhonghuan Semiconductor in 1958 and broke into Renewable energy products more than 20 years ago. Another well established company losing on Ruinable Energy.
…
JinkoSolar is another well established 19 year old company founded Dec 2006 and losing Billions.
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Trina Solar was founded in 1997 so is 28 years old and well established
…
Even Dark New Energy, although the youngest, isn’t in its first five years. It was established 2007 so is 18 years old.
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Many NEW companies post losses until they establish a customer base and stabilize operations but the 5 companies have need established for 17-68 years ago and are well established.
…
So the argument that Google, Facebook and Amazon posted losses in their first few years isn’t comparable in this case. You’re comparing Apples to cobblestones.
Thanks BA. Seals the argument.
Amazon was founded in 1994
I HATE friggin autoreplace
Bless they provide was supposed to be Unless they provide
Dark New Energy was supposed to be Daqo New Energy. I even had to retype it after the fact and it was still autoreplaced
I wondered about the “Dark New Energy” reference. I thought maybe I had missed some technological advance! 🙂
“The only plausible source of the money being used to prop up this large scale fraud is plundering the savings accounts of ordinary Chinese people.”
How does this happen? It is reported that the people do save a higher percentage than those of many other nations, but government depletion of the savings seems questionable.
Many things purchased in the USA come either directly or indirectly from China. Apparently, the Chinese government controls much of the economy, why not skim at this level instead of at an individual level? That means my purchases help prop up China. Right?
They do it by printing money and devaluing the currency.
The government controlled part of the economy are the worst performers, whom banks can’t call in loans from even if they wanted to. It is in no shape to skim.
If the government controlled part of the economy was doing well, China would never have had to embrace black cat capitalism.
Ordinary Chinese have few choices where to put their savings, so many invested in real estate; like second homes, which morphed into Ghost Cities.
Google “China’s Real Estate Crisis” for details of the ongoing problem.
Likewise, consider what will happen to Chinese zombie companies [industries] and their stockholders once the subsidies & easy bank loans dry up.
China ended direct subsidies for wind and solar June 1, 2025. More solar was installed in May then in the next seven months combined. Turn out the (wind and solar) lights, the party’s over.
China’s Nuclear Energy Strategy
Kindly replace “then” by ” than” (comparative) in your second sentence.
If China was really losing a lot of money then a quick foreign expansion should do the job!
We should all be worried.
Attacking Taiwan would be a very costly affair for China, on many levels.
Chinese overproduction finally met reality. Now if we could just get Aussies, Brits, and Europeans to admit they are buying slave made solar components from a gulag system of prisons in western China with an array of coal fired power plants we just might get somewhere. But I’ll believe it when I see it in the advocacy driven cheap import markets lacking consumer education on what they are buying. I suppose Americans were just as clueless about labor camps in eastern Europe in the 1930s.
Interesting that profits have always been higher from paid labour than from slave labour.
How do you feel about the US sanctioned slavery that is prisoners being forced to work for nothing or next to nothing?
Ref: https://www.prisonpolicy.org/blog/2017/04/10/wages/
They have to “Pay their debt to society” somehow.
I’m for convict labor.
I’m also for right sentencing with Time On for bad behavior rather than Time Off for good behavior.
(plus room and board?)
Off-topic but funny/smart, inspired by this quote:
Here’s a story, paraphrased from Caveman Economist (https://substack.com/@cavemaneconomist/note/c-141126097), which he got from Michael Minns’ book The Underground Lawyer, Introduction part G. Minns’ grandfather opened a general store in Texas during the 1930s with cheap prices, and refused to force blacks to come in the back door. This aggravated the whites, who didn’t want to mix in those segregated days, but still wanted those cheap prices, so they came in the back door to not be seen. His store was vandalized, with rocks through windows and graffiti, and the cops presumably wouldn’t help such a troublemaker. So he borrowed $1000 (a lot of money in those days) and the next time someone vandalized his store, he told the banker he was going to have to default on that loan for his family’s safety. The banker was shocked, passed the word, and the vandalism stopped. From then on, the grandfather made sure he always owed money to the self-important people in town.
I personally don’t care what side of the aisle your politics are. With that said, I fail to understand the position of anyone who posts comments on this forum that props up China in any sort of positive fashion. The same could be said of other countries/governments, but China is easily the worst. It’ll be a great day for humanity when the Chinese government collapses, which I believe is inevitable.
Socialism always fails, sooner or later. Even if the entire world is socialist, it might manage to survive for a long time since there’s nothing to compare it with. But people like doing things better, it’s human nature, and sooner or later socialism always collapses.
Beware of great leaps. https://www.the-independent.com/arts-entertainment/books/news/maos-great-leap-forward-killed-45-million-in-four-years-2081630.html
All the members of the Chinese communist party know that all the people of China know that in Taiwan there is Freedom. This is why China wants capture Taiwan before the infection of Freedom spreads to the mainland and kills the Communist Party.
Communism in Russia only lasted from 1918 until 1991…73 years
Communism began in China in 1949 so has lasted 76 years. At 76 years it’s the longest lasting Communist regime. Though current unrest may bring it to an end…soon.
maybe my next cheap grid tied microinverter will be cheap enough so i can advance the timeline on bora bora?
Lying and cheating isn’t okay, you may get away with it for a long time but in the end it will bite you in the butt.
I have heard that China recently renewed large loans to Venezuela, unlikely to see that money back any time soon.
Solar panels are insignificant. Autos, steel, shipbuilding and other heavy manufacturing are not. But from overbuilding industrial capacity to ghost cities and real estate scams misallocation of capital runs rampant and guys like Kyle Bass have been warning their version of Soviet 5 year plans are coming home to roost. Yet when you watch CNBC the shills are back to pimping Chinese equities. I got burned on a small position 15 years ago, you have to be gullible Gus to believe any numbers, government or corporate, that they put out.
Exactly!
+50