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China to Promote Solar-Power Consolidation

(Wall Street Journal)

China opened the door to consolidation and bankruptcies among its troubled solar-products companies, steps that could help trim overcapacity in a global industry that has suffered losses and liquidations and has sparked a global trade spat.

In a statement late Wednesday, the State Council, China's cabinet, said it would reform the industry, such as by encouraging mergers and acquisitions. The cabinet will reduce government support and ban local governments from supporting failing domestic solar companies, it said.

The State Council also said it would make good use of "market pressure mechanisms" to eliminate overcapacity, suggesting that China would make it easier for companies to fail, although outright bankruptcy declarations are very rare in China.

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