Published: 12:00, May 21, 2024
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Exec: Solar firms can still thrive on global footprint even amid trade row
By Zheng Xin
An employee installs a solar panel circuit at a high-tech company in Suqian, Jiangsu province. (WANG LI / FOR CHINA DAILY)

Chinese solar companies are capable of mitigating risks while maintaining their competitive edge in the international market amid an ongoing trade dispute, as they have been stepping up efforts to diversify their global operations in recent years, experts and business insiders said.

A recent decision by the United States to impose additional tariffs on Chinese solar cells, which is based more on political posturing than on economic issues, will have limited impact, as Chinese solar companies have significantly diversified their export market, establishing strong trade relationships with countries across Europe, Asia, Africa and Latin America, an executive of a domestic solar company said.

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While trade frictions are inevitable with varying development conditions across different regions and countries, Risen Energy has been expanding its production capacities abroad, bolstering its resilience against global market fluctuations while enhancing global competitiveness, said Leon Chuang, global marketing director of the photovoltaic manufacturer.

"Risen Energy places greater importance on the developmental significance brought about by globalization, setting up production facilities in other countries to circumvent US tariffs," he said.

By expanding its business across the globe, Risen Energy has been enhancing its international competitiveness. The first phase of the company's battery component project in Malaysia was successfully put into operation recently, while the company's solar panels are also exported to Mexico, Australia, Chile and Brazil.

Trina Solar Co Ltd, a Chinese solar panel giant, has also been actively advancing its globalization strategy to not only enhance its competitiveness overseas but also strengthen its ability to reduce risks abroad.

While companies cannot control the risks associated with foreign trade policies, those with comprehensive globalization strategies and local operational capabilities will always maintain a leading position in the same policy environment, it said.

An analyst said the diversification strategies of these companies underscore a broader trend among Chinese solar manufacturers, which are navigating the complexities of globalization to secure their positions in an increasingly competitive and volatile market.

The recent focus by the United States and Europe on the risks to other economies from China's alleged excess capacity is misguided and the criticism understates innovation by Chinese companies in key industries and overstates the importance of State support in driving their growth, said Lin Boqiang, the head of the China Institute for Studies in Energy Policy at Xiamen University.

The US is not a major export destination for Chinese solar products, and China has already begun to diversify its export markets, he said.

Last year, China's exports of photovoltaic cells and modules to the US amounted to $3.35 million and $13.15 million, respectively. These two major solar products accounted for just 0.1 percent and 0.03 percent of China's total export of photovoltaic products, respectively, according to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

The criticism reflects their concern that China's PV industry will soon dominate the global market, which sees significant advantage in technology, prices and services, thanks to years of large-scale development and technological iterations, said Lin.

According to Liu Yiyang, deputy secretary-general of the China Photovoltaic Industry Association, the diversified development of China's photovoltaic industry in the global industrial chain can help domestic solar companies better effectively cope with risks.

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In the context of a global energy transition that boosts strong demand for solar products, China's photovoltaic products, with a strong price advantage, remains competitive on the global stage, he said.

According to Liu, the US market adds about 40 GW of new installed capacity every year, accounting for only less than 10 percent of the total global market, and the increased concerns over China's advancing solar capacity is due to the rapid growth of China's solar industry.

The advancement of China's solar sector is crucial for ensuring a stable supply of solar products to combat climate change globally, making solar power one of the most cost-effective energy sources for many countries and regions worldwide, he said.

zhengxin@chinadaily.com.cn