China’s final GDP results came in better the expected at 7.3% q/y last week and USB is looking for China to continue at a pace of 6.8% for 2015. UBS went on to say it expects further China policy measures will help the county’s sluggish economy.
Looking back on 2014 China's (FXI, quote) GDP overall grew 7.4% for the year, although this seems like an impressive result when comparing it other GDP results around the world it is the weakest growth for China in 24 years.
However, we should see continue policy support in China as China makes strides to pro-growth reform and infrastructure projects. One in particular has caught my attention and that is the small change China made in dealing with solar subsidies.
When China attempted shift its subsidies to favor non-utility solar generation many of solar companies where left holding the bill when a customer stopped pay or simply moved. The shift in policy worked and solar companies began to produce and install “retail” or roof top generation vs. the massive solar farms. So if company or person moved out the building the solar company was left holding the bag.
Now China has fixed this problem by subsidizing the roof top installation at the utility rate if the system is abandon.
This warrants another look at the China solar names on the policy change and China aggressive move to cleaner energy.