AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (2 comments)

  1. Nickolaus

    The trade deficit is one of the most meaningless measures that exist in all of macro.

  2. Todd Mason

    Yes, without facts, the chart looks counterintuitive. Now here are the facts as they relate to photovoltaic cells: http://www.pv-tech.org/news/chinese_pv_shares_surge_on_us1.1_billion_addition_to_chinese_solar_subsidie

    Note that China raised its domestic installed target for PV generated electricity to 40 gigawatts, which is to say it directly and indirectly subsidizes its PV companies. (So does Germany.)

    And the results: http://www.ise.fraunhofer.de/de/downloads/pdf-files/aktuelles/photovoltaics-report.pdf

    A chart on page 11 shows China with 56 percent of the world PV market in 2011, or a complete reversal from 2004 when the US had roughly the same position.

    A brief primer on a silicon based economy: Fabrication foundries are hugely expensive and complex. To climb the learning curve, or the path to profitable mass production, requires mass orders.

    Yes, the US generates the world’s ideas. In the case of PV we owned it for 5 years.

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