China Development Bank ( CDB ) is a policy bank of China under the State Council . Established in 1994, it has been described as the engine that powers the national government's economic development policies. It has raised funds for numerous large-scale infrastructure projects, including the Three Gorges Dam and the Shanghai Pudong International Airport .
117-529: The bank is the second-largest bond issuer in China after the Ministry of Finance. In 2009, it accounted for about a quarter of the country's yuan bonds and is the biggest foreign-currency lender. CDB debt is owned by local banks and treated as a risk-free asset under the proposed People's Republic of China capital adequacy rules (i.e. the same treatment as PRC government bonds). The China Development Bank (CDB)
234-408: A Chapter 11 bankruptcy at the giant telecommunications company Worldcom , in 2004 its bondholders ended up being paid 35.7 cents on the dollar. In a bankruptcy involving reorganization or recapitalization, as opposed to liquidation, bondholders may end up having the value of their bonds reduced, often through an exchange for a smaller number of newly issued bonds. A number of bond indices exist for
351-458: A tap issue or bond tap . Nominal, principal, par, or face amount is the amount on which the issuer pays interest, and which, most commonly, has to be repaid at the end of the term. Some structured bonds can have a redemption amount which is different from the face amount and can be linked to the performance of particular assets. The issuer is obligated to repay the nominal amount on the maturity date. As long as all due payments have been made,
468-426: A 34% increase from the previous year. This reflects ongoing growth, although the increase was less than the 154% surge seen in early 2023, showing some variability in expansion rates. Photovoltaic research in China began in 1958 with the development of China's first piece of monocrystalline silicon . Research continued with the development of solar cells for space satellites in 1968. The Institute of Semiconductors of
585-410: A bond is a form of loan or IOU . Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds , to finance current expenditure. Bonds and stocks are both securities , but the major difference between the two is that (capital) stockholders have an equity stake in a company (i.e. they are owners), whereas bondholders have a creditor stake in
702-497: A bond will immediately affect mutual funds that hold these bonds. If the value of the bonds in their trading portfolio falls, the value of the portfolio also falls. This can be damaging for professional investors such as banks, insurance companies, pension funds and asset managers (irrespective of whether the value is immediately " marked to market " or not). If there is any chance a holder of individual bonds may need to sell their bonds and "cash out", interest rate risk could become
819-404: A centralized exchange or trading system. Rather, in most developed bond markets such as the U.S., Japan and western Europe, bonds trade in decentralized, dealer-based over-the-counter markets. In such a market, liquidity is provided by dealers and other market participants committing risk capital to trading activity. In the bond market, when an investor buys or sells a bond, the counterparty to
936-742: A commercial lender rather than an official bilateral creditor. Along with the Silk Road Fund and the Export-Import Bank of China, the China Development Bank is one of the primary financing sources for Belt and Road Initiative projects in Africa, and is an important funder of BRI projects more generally. The Governors of the bank report to a Board of Supervisors, who are accountable to the central government. There are four vice governors and two assistant governors. At
1053-402: A company (i.e. they are lenders). As creditors, bondholders have priority over stockholders. This means they will be repaid in advance of stockholders, but will rank behind secured creditors , in the event of bankruptcy. Another difference is that bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks typically remain outstanding indefinitely. An exception
1170-549: A county-level city in Qinghai province . The solar park contains 200 MW of installed photovoltaic capacity and was the largest individual solar plant in the world on its completion. Other solar parks such as the 20 MW Qinghai Golmud Solar Park were also installed in Golmud, with 570 MW of capacity installed in total at the end of 2011. The Chinese PV production system faced severe external shocks since 2010. A sharp recession in
1287-593: A coverup for China's plan to continue expanding with fossil fuel-powered production. The mass government subsidy-fueled construction of solar power plants has also been linked to climate change contribution as mass construction has contributed to increases in carbon emissions while the energy produced by the projects has not been fully used. China's expansion of solar power capacity has been met with criticism over implications of " green grabbing ". Critics argue that China has seized land from native populations and repurposed it for its own projects, such as solar farms, using
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#17327723453161404-452: A domestic CSP industry. Plants were located in different provinces and used several different routes, including parabolic trough, central receiver towers and a novel beam-down tower design. The initially target for 2018 could not be met and deadlines were extended multiple times, and the initially planned second batch was canceled. At the end of 2021 the installed capacity stood at 550 MW. Chinese industry has gained considerable experience in
1521-641: A foundation for a promising debt capital and structured finance market. China and Venezuela established the China-Venezuela Joint Fund in 2007, with the goal of offering capital funding for infrastructure projects in Venezuela which can be performed by Chinese companies. CDB lent $ 4 billion to the fund and the Venezuelan Economic and Social Development Bank (BANDES) contributed $ 2 billion. As part of China's response to
1638-599: A largely reduced amount of subsidies for projects that are already in operation while new projects do not receive any subsidies outside of auctions. The switch to the auction system and capping of subsidies was designed to alleviate costs of solar subsidies and is attributed to the decline of the growth of the Chinese solar market in 2018 and 2019. However, the auction system has made renewable energy in western provinces cheaper than thermal energy in some cases, with Qinghai observing periods of time in which all of its energy usage
1755-417: A major role in alleviating infrastructure and energy bottlenecks in the Chinese economy. In 2003, CDB made loan arrangements for, or evaluated and underwrote, a total of 460 national debt projects and issued 246.8 billion yuan in loans. This accounted for 41% of its total investment. CDB's loans to the "bottleneck" investments that the government prioritizes amounted to 91% of its total loan count. It also issued
1872-406: A new type of evacuated tube solar water heater design. These units became ubiquitous in rural China during the early 2000s. By 2014, China had more than 85 million solar water heaters, primarily operating in rural households. In 1998, demonstration projects for solar energy production began to appear, starting with a 3W polysilicon battery and applications for the energy. Yingli became one of
1989-429: A price of 100), their prices will move towards par as they approach maturity (if the market expects the maturity payment to be made in full and on time) as this is the price the issuer will pay to redeem the bond. This is referred to as " pull to par ". At the time of issue of the bond, the coupon paid, and other conditions of the bond, will have been influenced by a variety of factors, such as current market interest rates,
2106-500: A price of 75.26, indicates a selling price of $ 752.60 per bond sold. (Often, in the US, bond prices are quoted in points and thirty-seconds of a point, rather than in decimal form.) Some short-term bonds, such as the U.S. Treasury bill , are always issued at a discount, and pay par amount at maturity rather than paying coupons. This is called a discount bond. Although bonds are not necessarily issued at par (100% of face value, corresponding to
2223-419: A real problem, conversely, bonds' market prices would increase if the prevailing interest rate were to drop, as it did from 2001 through 2003. One way to quantify the interest rate risk on a bond is in terms of its duration . Efforts to control this risk are called immunization or hedging . There is no guarantee of how much money will remain to repay bondholders. As an example, after an accounting scandal and
2340-510: A total of 357.5 billion yuan in loans to western areas and more than 174.2 billion yuan to old industrial bases in Northeast China. These loans substantially increased the economic growth and structural readjustments of the Chinese economy. In 2005 and 2006, CDB successfully issued two pilot Asset-Backed Securities (ABS) products in the domestic China market. Along with other ABS products issued by China Construction Bank, CDB has created
2457-401: A total of 87.41 GW of solar in 2022, up 62% from the year before. Because solar works well as a distributed power source, recent Chinese policies have focused on increasing the prevalence of distributed solar energy and for developing systems so that electricity from solar energy can be used at its point of generation instead of transmitted over long distances. In June 2024, China activated
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#17327723453162574-707: A year and a fixed lump sum at maturity is attractive. Bondholders also enjoy a measure of legal protection: under the law of most countries, if a company goes bankrupt , its bondholders will often receive some money back (the recovery amount ), whereas the company's equity stock often ends up valueless. However, bonds can also be risky but less risky than stocks: Bonds are also subject to various other risks such as call and prepayment risk, credit risk , reinvestment risk , liquidity risk , event risk , exchange rate risk , volatility risk , inflation risk , sovereign risk and yield curve risk . Again, some of these will only affect certain classes of investors. Price changes in
2691-784: A year later by an issuance in the United States. Overseas issuance helped CDB diversify its funding sources. Ultimately, the issuance of bonds allowed CDB to become a financially independent bank without the state's tax revenues. In April 1998, former PBOC deputy governor Chen Yuan , the eldest son of Chen Yun , was appointed CDB's governor. Chen implemented reforms designed to increase CDB's autonomy by reducing state involvement in CDB's fundraising and lending. From 1998 to 2008, CDB increased its fundraising autonomy and used an auction-based bond issuance mechanism to raise its funds. In 1999, CDB offered China's first floating rate bond . CDB plays
2808-446: Is a 12-digit alphanumeric code that uniquely identifies debt securities. In English , the word " bond " relates to the etymology of "bind". The use of the word "bond" in this sense of an "instrument binding one to pay a sum to another" dates from at least the 1590s. Bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets . The most common process for issuing bonds
2925-568: Is a low demand for electricity and a lack of infrastructure to transfer energy towards China's main power grid. In response to the growing problems of the rapidly expanding solar power market and the need to meet promised subsidies, the National Development and Reform Commission announced in May 2018 that solar power subsidies would be slashed and feed-in tariffs would be significantly reduced in favor of an auction-based system. In 2020,
3042-1076: Is a poisonous material that can make soil infertile and harm humans if it is not disposed of properly. In developed countries, silicon tetrachloride is recycled and reprocessed, preventing the substance from entering the environment. However, special technology and large amounts of energy are required to reprocess silicon tetrachloride. Chinese green energy companies have not invested in recycling this byproduct, instead opting to lower production costs and dump waste into nearby residential areas. This lack of investment into environmental safety protocols has also been attributed to Chinese factories attempting to open much sooner than it would take normally. Some solar cells are also made with chemicals such as sulfuric acid and phosphine gas as well as metals such as lead, chromium , and cadmium . These chemicals and metals are toxic to humans through contact and contamination of resources. While many developed countries that produce photovoltaic cells have properly disposed of or repurposed wasted solar cells, many Chinese firms have not adopted
3159-399: Is an irredeemable bond, which is a perpetuity , that is, a bond with no maturity. Certificates of deposit (CDs) or short-term commercial paper are classified as money market instruments and not bonds: the main difference is the length of the term of the instrument. The most common forms include municipal , corporate , and government bonds . Very often the bond is negotiable, that is,
3276-408: Is commonly used for smaller issues and avoids this cost, is the private placement bond. Bonds sold directly to buyers may not be tradeable in the bond market . Historically, an alternative practice of issuance was for the borrowing government authority to issue bonds over a period of time, usually at a fixed price, with volumes sold on a particular day dependent on market conditions. This was called
3393-575: Is currently the year with the second-largest addition of solar energy capacity in China's history. Combined with wind energy, almost 10% of China's energy came from non-hydroelectric renewable power in 2020. China's total photovoltaic energy capacity at the end of 2020 was 252.5 GW. China has stated that it aims to increase the energy share of solar and wind energy to 11% by the end of 2021. Renewable energy subsidies for 2021 for increased, with subsidies for solar power having increased more than subsidies for wind energy. The Huanghe Hydropower Hainan Solar Park
3510-515: Is not trying to replace fossil fuels with renewable sources of energy, but instead trying to increase the energy capacity of both forms of energy. Although China's solar energy capacity has increased dramatically in recent years, its carbon emissions have risen as well. Consequently, critics have seen China's pledge to peak its carbon emissions as a time window for it to increase its carbon emissions rather than reduce them, with its investments into renewable energy sources such as solar power being used as
3627-427: Is only partially correct. Bonds do suffer from less day-to-day volatility than stocks, and bonds' interest payments are sometimes higher than the general level of dividend payments. Bonds are often liquid – it is often fairly easy for an institution to sell a large quantity of bonds without affecting the price much, which may be more difficult for equities – and the comparative certainty of a fixed interest payment twice
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3744-485: Is planned to expand to a photovoltaic capacity of 10 GW. At the Climate Ambition Summit in 2020, Xi Jinping announced that China planned to have 1,200 GW of solar and wind energy capacity by 2030. Between first 6 months of 2022, China built nearly 31GW of new solar power capacity, which up 137% compared to a years before. It expected the full-year installations would hit a record high. China added
3861-429: Is the definition of the redemption yield on the bond, which is likely to be close to the current market interest rate for other bonds with similar characteristics, as otherwise there would be arbitrage opportunities. The yield and price of a bond are inversely related so that when market interest rates rise, bond prices fall and vice versa. For a discussion of the mathematics see Bond valuation . The bond's market price
3978-449: Is the largest market in the world for both photovoltaics and solar thermal energy . China's photovoltaic industry began by making panels for satellites , and transitioned to the manufacture of domestic panels in the late 1990s. After substantial government incentives were introduced in 2011, China's solar power market grew dramatically: the country became the world's leading installer of photovoltaics in 2013. China surpassed Germany as
4095-434: Is the rate of return received from investing in the bond. It usually refers to one of the following: The quality of the issue refers to the probability that the bondholders will receive the amounts promised at the due dates. In other words, credit quality tells investors how likely the borrower is going to default. This will depend on a wide range of factors. High-yield bonds are bonds that are rated below investment grade by
4212-421: Is through underwriting . When a bond issue is underwritten, one or more securities firms or banks, forming a syndicate , buy the entire issue of bonds from the issuer and resell them to investors. The security firm takes the risk of being unable to sell on the issue to end investors. Primary issuance is arranged by bookrunners who arrange the bond issue, have direct contact with investors and act as advisers to
4329-439: Is to support the macroeconomic policies of the central government and to support national economic development and strategic structural changes in the economy. The bank provides financing for national projects such as infrastructure development, basic industries, energy, and transportation. Most of CDB's loans are for domestic projects, and it began lending for projects abroad in the early 2000s. From 1994 to 1998, CDB's fundraising
4446-453: Is usually expressed as a percentage of nominal value: 100% of face value, "at par", corresponds to a price of 100; prices can be above par (bond is priced at greater than 100), which is called trading at a premium, or below par (bond is priced at less than 100), which is called trading at a discount. The market price of a bond may be quoted including the accrued interest since the last coupon date. (Some bond markets include accrued interest in
4563-630: Is wholly state-owned through multiple state bodies. As of 2019, the owners were Central Huijin Investment Ltd. (one of China's sovereign funds ), Buttonwood Investment Holding Company Ltd. (owned by the State Administration of Foreign Exchange ), and the National Council for Social Security Fund . CDB has a thirteen member board of directors. Three are the executives in charge of managing CDB. Six are directors from
4680-487: The 2008 global financial crisis , emphasis on CDB's policy aspects increased and the state formalized its credit guarantee for CDB. CDB was one of the financial agencies implementing China's stimulus plan and vastly increased its lending for infrastructure and industrial projects. From 2009 to 2019, CDB has issued 1.6 trillion yuan in loans to more than 4,000 projects involving infrastructure, communications, transportation, and basic industries. The investments are spread along
4797-602: The Chinese Academy of Sciences led this research for a year, stopping after batteries failed to operate. Other research institutions continued the development and research of solar cells for Dongfanghong satellites . In 1975, domestic solar cell production began with factories in Ningbo and Kaifeng. These cells were produced in a similar fashion to the satellite cells of the past. Annual solar capacity installations were still low, as only 0.5 kW of photovoltaic capacity
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4914-597: The Ministry of Finance of the People's Republic of China slashed the solar energy subsidy budget down to 1.5 billion yuan ($ 233 million) from 3 billion yuan in 2019. With the auction-based system, companies are to submit subsidies bids for solar power construction projects to the National Energy Administration . Companies that do not partake in competitive bidding must instead accept
5031-604: The New York Stock Exchange in 2005, founder Shi Zhengrong became the richest person in China. Academic Lan Xiaohuan writes that Shi's wealth following the listing "acted as a strong demonstration effect and local governments across China soon began to invest in the solar industry." In 2007, the National Development and Reform Commission planned to have China's solar capacity increase to 1,800 MW by 2020. However, according to Wang Zhongying,
5148-446: The credit rating agencies . As these bonds are riskier than investment grade bonds, investors expect to earn a higher yield. These bonds are also called junk bonds . The market price of a tradable bond will be influenced, among other factors, by the amounts, currency and timing of the interest payments and capital repayment due, the quality of the bond, and the available redemption yield of other comparable bonds which can be traded in
5265-467: The 2020 Climate Ambition Summit that China plans to have 1,200 GW of combined solar and wind energy capacity by 2030. Solar water heating is also extensively implemented, with a total installed capacity of 290 GWth at the end of 2014, representing about 70% of world's total installed solar thermal capacity. The expansion of the solar sector in China has been criticized due to the large quantities of waste being produced and improperly disposed of from
5382-478: The Chinese government but do not operate at full capacity due to the inability to transfer the full energy capacity from production sites. Chinese green energy companies such as Luoyang Zhonggui High-Technology Co. in Henan have become large producers of polysilicon in response to growing the demand for solar cells. However, polysilicon production produces silicon tetrachloride as a byproduct. Silicon tetrachloride
5499-417: The National Development and Reform Commission increased the solar capacity target to 70 GW by 2017. The National Energy Administration also announced plans to install 100 GW of solar power along with other renewable energy sources and nuclear energy by 2020 in 2014. However, market analysts expected for 110 GW to be installed by 2018 and that by 2020, more solar energy could be installed than planned. In 2015,
5616-602: The Yangtze River in 2019, said CDB Chairman Zhao Huan. China issued a development plan for the Yangtze River Economic Belt in September 2016 and a guideline for green development of the belt in 2017. The Yangtze River Economic Belt consists of nine provinces and two municipalities that cover roughly one-fifth of China's land. It has a population of 600 million and generates more than 40 percent of
5733-545: The Yellow River, and both south and north of the Yangtze River . CDB has been increasingly focusing on developing the western and northwestern provinces in China. This could help reduce the growing economic disparity in the western provinces, and it has the potential to revitalize the old industrial bases of northeast China. In 2010, CDB provided $ 30 billion in financing to Chinese solar power manufacturers. At
5850-456: The agencies that hold shares of CDB. The four "government-ministry directors" come from the National Development and Reform Commission , the Ministry of Finance , the Ministry of Commerce , and the People's Bank of China . Bond (finance) In finance , a bond is a type of security under which the issuer ( debtor ) owes the holder ( creditor ) a debt , and is obliged – depending on
5967-547: The available solar energy that can be harnessed today by up to 15% compared to the 1960s. As of at least 2024, China has one third of the world's installed solar panel capacity and is the largest domestic market for solar panels. A large part of the solar power capacity installed in China is in the form of large PV power plants in the west of the country, an area much less populated than the eastern part but with better solar resources and available land. In 2018 23,300 MW of utility scale power plant installations were added bring
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#17327723453166084-477: The belt amounted to 3.85 trillion yuan (about 575 billion U.S. dollars), according to the CDB. New yuan loans to these regions reached 304.5 billion yuan last year, accounting for 48 percent of the bank's total new yuan loans. The funds mainly went to major projects in the fields of ecological protection and restoration, infrastructure connectivity, and industrial transformation and upgrading. The CDB will continue to support ecological protection and green development of
6201-513: The bond includes embedded options , the valuation is more difficult and combines option pricing with discounting. Depending on the type of option, the option price as calculated is either added to or subtracted from the price of the "straight" portion. See further under Bond option § Embedded options . This total is then the value of the bond. More sophisticated lattice- or simulation-based techniques may (also) be employed. Bond markets, unlike stock or share markets, sometimes do not have
6318-474: The bond issuer in terms of timing and price of the bond issue. The bookrunner is listed first among all underwriters participating in the issuance in the tombstone ads commonly used to announce bonds to the public. The bookrunners' willingness to underwrite must be discussed prior to any decision on the terms of the bond issue as there may be limited demand for the bonds. In contrast, government bonds are usually issued in an auction. In some cases, both members of
6435-431: The bonds to match their liabilities, and may be compelled by law to do this. Most individuals who want to own bonds do so through bond funds . Still, in the U.S., nearly 10% of all bonds outstanding are held directly by households. The volatility of bonds (especially short and medium dated bonds) is lower than that of equities (stocks). Thus, bonds are generally viewed as safer investments than stocks , but this perception
6552-549: The construction of buildings infrastructure projects. This speculation of the growth of urban centers has led to a housing bubble in China, where buildings and infrastructure are being constructed at a rate in which much of the construction is unused or redundant. As these unused buildings and towns are constructed, more carbon emissions are produced due to the usage of cement and other building materials. Thus, China's "green grabbing" has also been criticized by environmentalists who see China's urban expansion as useless and damaging to
6669-420: The costs of subsidizing a rapidly growing industry are massive and some of China's struggles dealing with the costs have become visible. The renewable energy fund, which is paid by consumers, has a 100 billion yuan deficit while tariff payments have occasionally been paid late. Government subsidies for solar power have also been attributed to over construction, as many solar power projects have been funded by
6786-449: The country's GDP. As of at least 2018, CDB was the world's largest development bank, with total assets exceeding 16 trillion RMB. In 2020, China joined the G20 -led Debt Service Suspension Initiative, through which official bilateral creditors suspended debt repayments of 73 of the poorest debtor countries. China did not include CDB loans as part of the initiative under the logic that CDB was
6903-407: The cumulative total in this sector to 123,730 MW of power. Distributed installations rose by almost as much during 2018 at 20,960 MW bringing the cumulative total in the sector to 51,250 MW by year end 2018. Off-grid solar was the smallest component in 2018 with just 360 MW cumulatively installed. China has been the world's largest manufacturer of solar panels since 2008 and, since 2011, has produced
7020-490: The currency, the term of the bond (length of time to maturity) and the conditions applying to the bond. The following descriptions are not mutually exclusive, and more than one of them may apply to a particular bond: The nature of the issuer will affect the security (certainty of receiving the contracted payments) offered by the bond, and sometimes the tax treatment. Some companies, banks, governments, and other sovereign entities may decide to issue bonds in foreign currencies as
7137-682: The dealers earn revenue by means of the spread, or difference, between the price at which the dealer buys a bond from one investor—the "bid" price—and the price at which he or she sells the same bond to another investor—the "ask" or "offer" price. The bid/offer spread represents the total transaction cost associated with transferring a bond from one investor to another. Bonds are bought and traded mostly by institutions like central banks , sovereign wealth funds , pension funds , insurance companies , hedge funds , and banks . Insurance companies and pension funds have liabilities which essentially include fixed amounts payable on predetermined dates. They buy
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#17327723453167254-427: The east. The 12th five-year plan, for 2011 to 2015, called for the installation of 1,000 MW by 2015, and 3,000 MW of CSP plants by 2020. However, at the end of 2014, only several demonstration stations were operational in the country. In the subsequent 13th five-year plan a demonstration batch for 20 CSP plants for 1.35 GW was launched, which aimed to bring latest international technologies to China and build
7371-644: The end of 2004, CDB had about 3,500 employees. About 1,000 of CDB's employees work at the Beijing Headquarters, with the rest in 35 mainland branches; including a representative office in Tibet and a branch in Hong Kong . As of 2021, the CDB has more than 9,000 employees. CDB does not accept deposits from individuals. Its depositors are other financial agencies that are collaborating with CDB or entities which are repaying loans borrowed from CDB. CDB
7488-479: The end of 2010, CDB held US$ 687.8 billion in loans, more than twice the amount of the World Bank . After Chen left the governorship of CDB in 2013, the bank's institutional power decreased. The next CDB governor, Hu Huaibang , removed CDB personnel to staff the bank with personnel loyal to himself. Hu then leveraged his personal influence to approve large amounts of industrial loans which ultimately failed. Hu
7605-401: The environment. This argument has been complemented by China's expansion of fossil fuel plants in conjunction with solar energy. Following claims of China has taken land from rural natives under the guise of climate protection, many rural populations have been encouraged to move to government housing or urban centers. However, as expectations for the arrival of urban citizens have risen, so has
7722-578: The first half of 2015. By the end of 2015, China installed 15.1 GW of solar energy, failing to meet both of the raised goals, but meeting the original goal. The plan for annual solar capacity for 2020 was also increased in October 2015 to 150 GW. In 2016, China added 34.5 GW of solar energy. The first 105 GW solar capacity by 2020 goal set by Chinese authorities was met in July 2017. In the first nine months of 2017, China saw 43 GW of solar energy installed in
7839-505: The first nine months of the year and saw a total of 52.8 GW of solar energy installed for the entire year. 2017 is currently the year with the largest addition of solar energy capacity in China. China's total photovoltaic energy capacity at the end of 2017 was 130 GW, surpassing Germany as the world's largest producer of solar energy. In 2018, China saw a decrease in annual solar energy, dropping down to 44.4 GW. In 2019, annual solar energy installation further dropped to 30.1 GW, even lower than
7956-545: The first producers of this new solar energy. However, annual capacity did not increase much until 2002 when a 10 MW solar cell production line was put into operation by Suntech Power . That year, a program aimed to install more solar and wind energy in Tibet, Xinjiang, Qinghai, Gansu, Inner Mongolia, Shanxi, and Sichuan was introduced by the National Development and Planning Commission. This spurred solar cell production and annual installations skyrocketed from 3.3 MW in 2000 to 20.3 MW in 2002. Photovoltaic cell production expanded in
8073-536: The following years, with 140 MW manufactured in 2005. Only 5 MW of solar energy was installed in China that year, however, as most of the manufactured photovoltaic cells were sold to European countries, with Germany being the largest buyer. China's annual solar energy installations grew to 10 MW installed in 2006, increasing China's total installed solar energy capacity to 80 MW. Annual solar energy installations continued to grow, with 20 MW of capacity installed in 2007 and 40 MW installed in 2008. After Suntech's listing on
8190-505: The foreign currency may appear to potential investors to be more stable and predictable than their domestic currency. Issuing bonds denominated in foreign currencies also gives issuers the ability to access investment capital available in foreign markets. A downside is that the government loses the option to reduce its bond liabilities by inflating its domestic currency. The proceeds from the issuance of these bonds can be used by companies to break into foreign markets, or can be converted into
8307-560: The global demand due to institutional alterations in the German market in 2010, followed by anti-dumping duties and anti-subsidy countervailing duties on Chinese PV products enforced in both USA and EU. Chinese PV manufacturers, which were already running at full capacity, faced a difficult situation in 2011 and 2012 with huge financial losses that led to the bankruptcy of some important companies, such as Suntech Power in 2013 which defaulted on $ 541 million of convertible bonds. To rescue
8424-454: The growth of the solar market in China. Chinese-produced photovoltaic cells have made the construction of new solar power projects much cheaper than in previous years. Domestic solar projects have also been heavily subsidized by the Chinese government, allowing for China's solar energy capacity to dramatically soar. As a result, they have become the leading country for solar energy, passing Germany's capacity in 2015. As other countries from around
8541-559: The head of the National Development and Reform Commission's renewable energy development, stated that China would far exceed this goal, predicting that at least 10 GW can be installed by 2020, with 20 GW of installed capacity within the realm of possibility. Despite these predictions, solar energy accounted for only a small fraction of China's total installed energy in 2008. The global financial crisis of 2007-2008 prompted significant stimulus efforts by China to invigorate its then-struggling solar industry. Policy tools to stimulate growth in
8658-490: The huge PV industry with its large labor market and assets, a comprehensive set of policies was introduced by the Chinese government mainly to stimulate the domestic market. Accordingly, the annual installed capacity in China experienced notable growth since 2011. This growth was mainly due to the construction of several PV power plants around the country. In May 2011, the National People's Congress (NPC) revised
8775-475: The industry included inexpensive land, tax incentives, and subsidized loans. In 2011, feed-in-tariffs for solar power projects completed before a certain deadline were introduced. These feed-in tariffs were extremely successful at expanding China's solar power sector, largely exceeding the Chinese government's expectations for growth. The Huanghe Hydropower Golmud Solar Park was also completed in 2011 in Golmud ,
8892-518: The installations made in 2016. This decline in growth is attributed to the Chinese government restructuring government incentives to start solar energy projects in May 2018. Despite this decline in growth, China remained the largest market for solar energy with 205 GW total installed capacity in 2019, which was almost as much as the total installed capacity in the European Union (132 GW) and the United States (76 GW) combined. However, from all of
9009-550: The issuer has no further obligations to the bond holders after the maturity date. The length of time until the maturity date is often referred to as the term or tenor or maturity of a bond. The maturity can be any length of time, although debt securities with a term of less than one year are generally designated money market instruments rather than bonds. Most bonds have a term shorter than 30 years. Some bonds have been issued with terms of 50 years or more, and historically there have been some issues with no maturity date (irredeemable). In
9126-413: The issuer receives are thus the issue price, less issuance fees. The market price of the bond will vary over its life: it may trade at a premium (above par, usually because market interest rates have fallen since issue), or at a discount (price below par, if market rates have risen or there is a high probability of default on the bond). Bonds can be categorised in several ways, such as the type of issuer,
9243-431: The issuing company's local currency to be used on existing operations through the use of foreign exchange swap hedges. Foreign issuer bonds can also be used to hedge foreign exchange rate risk. Some foreign issuer bonds are called by their nicknames, such as the "samurai bond". These can be issued by foreign issuers looking to diversify their investor base away from domestic markets. These bond issues are generally governed by
9360-525: The key parts of the solar industry supply chain, including polysilicon, silicon wafers, batteries, and photovoltaic modules. China's impact on economies of scale and technological development was an important contributor in the 85% drop in the price of photovoltaic modules from 2010-2020. The China Development Bank provided $ 20 billion of financing to domestic solar manufacturers in 2010. In 2011, new feed-in tariffs were promised to potential solar power developers to help drive investments and growth in
9477-496: The law of the market of issuance, e.g., a samurai bond, issued by an investor based in Europe, will be governed by Japanese law. Not all of the following bonds are restricted for purchase by investors in the market of issuance. The market price of a bond is the present value of all expected future interest and principal payments of the bond, here discounted at the bond's yield to maturity (i.e. rate of return ). That relationship
9594-422: The length of the term and the creditworthiness of the issuer. These factors are likely to change over time, so the market price of a bond will vary after it is issued. (The position is a bit more complicated for inflation-linked bonds.) The interest payment ("coupon payment") divided by the current price of the bond is called the current yield (this is the nominal yield multiplied by the par value and divided by
9711-611: The majority of global photovoltaics on an annualized basis. Industry projections estimated that, by the end of 2017, China would have enough manufacturing capacity to produce 51 GW of PV modules per year, an amount over twice as large as 2010's global production of 24 GW. The industry is dominated by several major manufacturers. They include CHINT Group Corporation , JA Solar Holdings , Jinniu Energy , Suntech Power , Yingli , China Sunergy and Hanwha SolarOne . Large debt challenges several manufacturers. China has large potential for concentrated solar power (CSP), especially in
9828-406: The market for United States Treasury securities, there are four categories of bond maturities: The coupon is the interest rate that the issuer pays to the holder. For fixed rate bonds , the coupon is fixed throughout the life of the bond. For floating rate notes , the coupon varies throughout the life of the bond and is based on the movement of a money market reference rate (historically this
9945-423: The markets. The price can be quoted as clean or dirty . "Dirty" includes the present value of all future cash flows, including accrued interest, and is most often used in Europe. "Clean" does not include accrued interest, and is most often used in the U.S. The issue price at which investors buy the bonds when they are first issued will typically be approximately equal to the nominal amount. The net proceeds that
10062-421: The molten-salt storage technology and operating results of the plants are promising and meet their design parameters. In the current 14th five-year plan there is no federal support for CSP. However, several provinces including Gansu, Qinghai, Xinjian UAR and Jilin have announced CSP projects in the context of the storage and peak shaving legislation. Optimistic assessments suggest that several GW could be built in
10179-415: The need to protect the country from climate change as a justification for land seizure. Renewable energy projects, such as solar power plants, have been built in western regions of China where many native nomadic people have had their land taken away. As such, critics argue that investments into renewable energy sources such as solar power are means to increase the power of the central state rather than protect
10296-478: The next five years. China is the leading country for solar water heating capacity in the world, with 290 GW th in operation at the end of 2014, accounting for about 70% of the total world capacity. In terms of capacity per unit of population, China comes 7th in the world with 213 kW th per 1,000 people. Most of the installed capacity (92%) was evacuated tube water heaters. The growth of solar power industries worldwide has been rapidly accelerated by
10413-441: The ownership of the instrument can be transferred in the secondary market . This means that once the transfer agents at the bank medallion-stamp the bond, it is highly liquid on the secondary market. The price of a bond in the secondary market may differ substantially from the principal due to various factors in bond valuation . Bonds are often identified by their international securities identification number, or ISIN , which
10530-653: The practice recycling solar panels and waste. Non-hazardous materials have also been dumped instead of repurposed, further contributing to waste. Various protests over solar cell production pollution have been staged. In Zhejiang province, protests over the destruction of fish habitats emerged in September 2011. Hundreds of villagers rioted in the Zhejiang Jinko Solar Co., Ltd. factory, which produces photovoltaic cells and wafers. The factory had previously failed pollution tests in April and that its waste control
10647-439: The price). There are other yield measures that exist such as the yield to first call, yield to worst, yield to first par call, yield to put, cash flow yield and yield to maturity. The relationship between yield and term to maturity (or alternatively between yield and the weighted mean term allowing for both interest and capital repayment) for otherwise identical bonds derives the yield curve , a graph plotting this relationship. If
10764-470: The production of photovoltaic cells. Criticism over large amounts of unused energy being produced has appeared along with criticism over the forced removal of native populations for development land and the usage of forced labor in the production of photovoltaic cells. As of at least 2023, solar power is cheaper than coal-fired power in China. By the first quarter of 2024, the momentum continued with China installing 45.7 gigawatts of photovoltaic panels,
10881-440: The public and banks may bid for bonds. In other cases, only market makers may bid for bonds. The overall rate of return on the bond depends on both the terms of the bond and the price paid. The terms of the bond, such as the coupon, are fixed in advance and the price is determined by the market. In the case of an underwritten bond, the underwriters will charge a fee for underwriting. An alternative process for bond issuance, which
10998-745: The purposes of managing portfolios and measuring performance, similar to the S&;P 500 or Russell Indexes for stocks . The most common American benchmarks are the Bloomberg Barclays US Aggregate (ex Lehman Aggregate), Citigroup BIG and Merrill Lynch Domestic Master . Most indices are parts of families of broader indices that can be used to measure global bond portfolios, or may be further subdivided by maturity or sector for managing specialized portfolios. Market specific General Solar power in China China
11115-629: The second-largest solar plant in the world, the Huanghe Hydropower Hainan Solar Park, which has a capacity of 2.2 GW. In 2023, China completed the world's largest hydro-solar power plant in Sichuan, which utilises the consistency in hydropower production to offset the variability in solar power. Solar power contributes to a small portion of China's total energy use, accounting for 3.5% of China's total energy capacity in 2020. Chinese President Xi Jinping announced at
11232-490: The solar capacity target was initially planned to be 15 GW but was increased in March 2015 by the National Energy Administration to 17.8 GW of installed solar capacity for the year. This target was increased again to 23.1 GW in October, a very ambitious goal considering that the annual solar energy installations for the entire world in 2010 were less than 20 GW. Despite these ambitious goals, China only 7.73 GW of solar energy in
11349-444: The solar power market immensely. These incentives were more successful in garnering attention and investment to the solar power sector than the Chinese government expected. Consequently, the Chinese government has struggled to keep up with these incentives. The government incentives have also contributed to the curtailment of solar energy, as many of the solar projects have been built in northern and western regions of China where there
11466-475: The solar power market. The government of Qinghai province offered solar projects that were operational before 30 September, 1.15 yuan ($ 0.18) for each kWh they produced in May 2011. The National Development and Reform Commission offered same-priced subsidies to potential solar power project operators nationwide. These tariffs were not capped. Other subsidies, such as Top Runner and Poverty Alleviation programs, were used in conjunction with feed-in tariffs to help grow
11583-514: The solar target again, setting 5 GW as an official minimum PV target for 2015, with a longer-term target of 20–30 GW by 2020. According to a 2012 forecast by the European Photovoltaic Industry Association, the total installed capacity was predicted to reach between 47 GW and 66 GW by 2017. Beginning in 2013, China's domestic demand for the solar industry rapidly increase. In 2014,
11700-520: The south-western part of the country. The highest daily mean values of direct normal radiation are found in the Qinghai-Tibet Plateau and Sichuan Basin , at 9 kWh/m2. Most of northern and western China has daily average direct normal radiation over 5 kWh/m2, considered the limit for economical use of CSP. Practical limitations for deployment of CSP include mountainous terrain and distance from energy load centers, mostly concentrated in
11817-483: The terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon ) over a specified amount of time. The timing and the amount of cash flow provided varies, depending on the economic value that is emphasized upon, thus giving rise to different types of bonds. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus,
11934-443: The total energy produced by China in 2019, only 3.9% of that energy was produced by solar energy. This was lower than the percent energy production from solar power of the European Union (4.9%) but greater than the percent share in the United States (2.8%). In 2020, China saw an increase in annual solar energy installations with 48.4 GW of solar energy capacity being added, accounting for 3.5% of China's energy capacity that year. 2020
12051-529: The trade is almost always a bank or securities firm acting as a dealer. In some cases, when a dealer buys a bond from an investor, the dealer carries the bond "in inventory", i.e. holds it for their own account. The dealer is then subject to risks of price fluctuation. In other cases, the dealer immediately resells the bond to another investor. Bond markets can also differ from stock markets in that, in some markets, investors sometimes do not pay brokerage commissions to dealers with whom they buy or sell bonds. Rather,
12168-559: The trading price and others add it on separately when settlement is made.) The price including accrued interest is known as the "full" or " dirty price ". ( See also Accrual bond .) The price excluding accrued interest is known as the "flat" or " clean price ". Most government bonds are denominated in units of $ 1000 in the United States , or in units of £100 in the United Kingdom . Hence, a deep discount US bond, selling at
12285-435: The world look to switch to renewable energy sources, cheap options for solar and wind have become focal points of interest for investments. China's mass production of cheap photovoltaic cells and wind energy have consequently spurred investments in Chinese products from around the world and expanded the construction of solar energy projects worldwide. As of at least 2024, Chinese firms are the industry leaders in almost all of
12402-635: The world's installed solar panel capacity. Most of China's solar power is generated within its western provinces and is transferred to other regions of the country. In 2011, China owned the largest solar power plant in the world at the time, the Huanghe Hydropower Golmud Solar Park , which had a photovoltaic capacity of 200 MW. In 2018, it held the record again with the Tengger Desert Solar Park with its photovoltaic capacity of 1.5 GW. China currently owns
12519-412: The world's largest producer of photovoltaic energy in 2015, and became the first country to have over 100 GW of total installed photovoltaic capacity in 2017. As of at least 2024, Chinese firms are the industry leaders in almost all of the key parts of the solar industry supply chain, including polysilicon, silicon wafers, batteries, and photovoltaic modules. As of at least 2024, China has one third of
12636-605: The world's largest solar power facility, a 3.5-gigawatt (GW) installation in Urumqi , Xinjiang . Built by Power Construction Corporation of China , this plant produces around 6.09 billion kilowatt hours (kWh) of electricity annually. Although in some countries there are aesthetic objections to large-scale solar farms, in China they are often perceived as an aesthetic positive due to their associations with modernity and green development. A July 2019 report found that local air pollution ( black carbon and sulfur dioxide) has decreased
12753-727: Was also completed in 2020 in Hainan Tibetan Autonomous Prefecture in Qinghai Province. The solar park has an installed capacity of 2.2 GW, making it the second-largest solar plant in the world as of 2021, behind the Bhadla Solar Park in India. The solar plant is connected to the world's first ultra-high voltage power line which gets all of its power from renewable energy and is capable of transferring power over 1000 km. The solar plant
12870-473: Was established in 1994 to provide development-oriented financing for high-priority government projects, particularly major infrastructure and projects that raise quality of life. It is under the direct jurisdiction of the State Council and the People's Central Government. At present, it has 35 branches across the country and one representative office. The main objective as a state financial institution
12987-648: Was established in 2014. In 2014, CDB was one of the funders of the Silk Road Fund , along with the State Administration of Foreign Exchange , China Investment Corporation , and Export-Import Bank of China . In 2015, China used its foreign exchange reserves to recapitalize CDB, which in turn empowered it to make significant foreign loans. In 2017, CDB provided RMB 130 billion to fund infrastructure and environmental upgrading in Xiong'an . As of December 2018, outstanding loans to 11 provincial-level regions along
13104-528: Was generally LIBOR , but with its discontinuation the market reference rate has transitioned to SOFR ). Historically, coupons were physical attachments to the paper bond certificates, with each coupon representing an interest payment. On the interest due date, the bondholder would hand in the coupon to a bank in exchange for the interest payment. Today, interest payments are almost always paid electronically. Interest can be paid at different frequencies: generally semi-annual (every six months) or annual. The yield
13221-448: Was inadequate despite warnings from the local environmental protection bureau. The protests occurred over multiple days, in which company property was damaged and destroyed. China has pledged to peak its carbon emissions by 2030 and has invested into renewable sources of energy, including solar power, to help meet this pledge. China has been opening new plants for solar energy production. Critics of China's climate policy argue that China
13338-414: Was installed. This increased to 8 kW in 1980, 70 kW in 1985, 500 kW in 1990, and 1550 kW in 1995. China's Sixth Five-Year Plan (1981-1985) was the first to address government policy support for solar PV panel manufacturing. Policy support for solar panel manufacturing has been a part of every Five-Year Plan since. In the early 1990s, Tsinghua University scientists developed
13455-611: Was removed from office in 2018 on suspicion of corruption and he was sentenced to life in prison in 2021 for accepting bribes to approve projects that should not have passed CDB criteria. Following these events, CDB became significantly more cautious in its financing decisions. CDB is among the state entities which contribute to the China Integrated Circuit Industry Investment Fund , which was established in an effort to decrease China's reliance on foreign semiconductor companies. The fund
13572-594: Was subject to a higher degree of state control than in later periods. In the 1990s, CDB facilitated the creation of China's interbank bond market . Initially, the People's Bank of China (PBOC) required domestic financial institutions such as commercial banks to buy policy bank bonds. At this stage, the PBOC usually set high yields and did not permit the apportioned bonds to be sold on the secondary market. In February 1996, CDB began its first overseas bond issuance in Japan, followed
13689-429: Was supplied through renewable energy. China's budget for renewable energy subsidies was increased to 6 billion yuan for 2021, with solar power receiving 3.38 billion yuan. These grants are set to be distributed to 14 provinces, with Inner Mongolia receiving the majority of the funding with 5.10 billion yuan. The government subsidies for solar power energy projects have been considered "unsustainable" as
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