In response to the global decline in solar panel prices and mounting budgetary constraints, the Chinese government was compelled to withdraw subsidies from the photovoltaic industry, resulting in sluggish demand and significant challenges for manufacturers. Despite the relatively high cost of solar energy, the sector has struggled due to the massive capital investment required for production capacity, which has led to overcapacity and financial instability.
On March 5, Chen Yuan, Chairman of the China Development Bank (CDB), announced that the bank will impose stricter controls on the expansion of the solar panel industry. This decision comes amid concerns that excess production capacity could heighten risks to the bank’s asset quality. His remarks were made during the 12th National ** meeting.
Chen also highlighted that local government financing platforms are expected to remain stable this year, while the CDB will continue to focus on mitigating related risks. He added that the bank's profits are unlikely to see a significant increase this year, as China's moderate economic growth is not expected to generate substantial returns for financial institutions.
Earlier this year, the CDB stated that more than half of its new investments will be directed toward urbanization projects. Regarding overseas mergers and acquisitions, Chen confirmed that the bank does not plan to acquire foreign assets in 2013. Instead, its focus will be on supporting overseas projects undertaken by Chinese companies. The total amount allocated for such initiatives this year is expected to range between $300 million and $500 million.
Established as China’s largest policy bank, the National Development Bank underwent a transformation into a commercial institution in 2008. Since then, it has adapted its operations to align with evolving economic conditions and strategic priorities.
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