Chinese photovoltaic (PV) solar power industry urged to stay united in face of US pressure. Industry body says companies should avoid ‘disorderly and vicious’ competition. US Treasury Secretary Janet Yellen recently said she would push for measures to address overcapacity in China.

The US has said it will target overcpacity in the Chinese solar power industry. Photo: Bloomberg

A Chinese solar industry body has warned against “vicious” internal competition in the face of efforts by the United States to target overcapacity in the sector.

Overseas trade barriers already pose a big challenge for Chinese solar panel makers, according to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, a semi-official organisation in Beijing, but it fears the situation will become worse.

China’s solar industry experienced fierce competition in 2023, resulting in overcapacity and a general sharp decline in product prices, the chamber said in a report released Saturday.

“[We must] avoid disorderly and vicious competition within the industry. The government and business associations should promote industry self-discipline and compliance and sustainable development.” the report said.

“Because of the limited domestic instalment and high overseas stocks, the industry is now under pressure.”

Recently US Treasury Secretary Janet Yellen vowed to “press my Chinese counterparts” to take necessary steps to address overcapacity issues and create a level playing field for American businesses.

China’s photovoltaic product exports amounted to US$47.59 billion in 2023, down 4.9 per cent year on year, according to data from the chamber.

It said sales of photovoltaic units by volume had risen by 36.6 per cent, but their value was down by 5.8 per cent. Meanwhile, solar cell shipments jumped by 69.4 per cent but the sales value rose by just 5.2 per cent.

Solar cells have been hailed as one of China’s biggest growth engines, and exports to the European Union were worth US$19.2 billion last year, according to Chinese customs data.

However, exports to the US face tariffs. Chinese exports of solar cells to the US dropped 6.7 per cent year on year to only US$3.3 million last year, or 0.1 per cent of the country’s solar cell exports, according to data from the chamber.

The Chinese trade chamber warned that other trade barriers may be imposed on grounds ranging from “human rights”, “low carbon certification” and “energy efficiency certifications” and urged the governnment to provide advice on how to counter these “new forms of trade barriers”.

Chinese companies signed 180 new photovoltaic power projects overseas totalling US$17.16 billion, mainly in Asia last year.

The chamber predicts that Asia-Pacific, Europe, and the Americas will be the main markets for new installations in 2024, with mainland China is expected to add about 172 gigawatts, accounting for more than a third of the global total.