Commodity cycles. We have all seen them. High returns and low barriers to entry suck in lots of players, profits fall, no one exits, companies bleed to death. Of course, sometimes one or two participants gain a competitive advantage (for instance technology, or financial backing) to ensure survival. For the rest it is carnage.

In the past decade China, with its predilection for irrational capital allocation, has been a big player in low tech, capital-intensive industries such as solar panel production. Developed world subsidies made the industry profitable, and Chinese companies leapt in. A glut in output ensued.

The share price performance of Hong Kong-listed China solar play Hanergy this week might suggest that things are looking up. On Thursday morning, the stock jumped as much as 40 per cent, adding $14bn to the company’s value. Even before that it was up two-fifths since Monday. The shares, nearly three-quarters of which are owned by the founder Li Hejun, closed up 14 per cent for a market capitalisation of $40bn.