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China’s solar panel industry seeks to curb ‘vicious competition’ with M&As and easy exits to control capacity as EU, US turn up heat

  • Falling prices and ‘operational pressures’ flagged at meeting of the China Photovoltaic Industry Association amid domestic overcapacity concerns
  • Mergers and acquisitions in the photovoltaic industry may play a role in mitigating excess capacity issues, analyst says

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The China Photovoltaic Industry Association held a meeting on Friday to address falling prices and “operational pressures” along the nation’s solar supply chain. Photo: AFP

Leaders of China’s multibillion-dollar solar cell industry have called for more mergers, acquisitions and curbs on domestic competition to control capacity, as Western countries resist Chinese exports in the name of industrial overcapacity.

The semi-official China Photovoltaic Industry Association said on its WeChat channel that those proposals, among others, emerged on Friday at a meeting that it held because of falling prices and “operational pressures” along the Chinese solar supply chain.

Meeting participants, including local government officials, suggested “putting an end to vicious competition” while encouraging mergers between solar firms, finding a way to let companies make smooth market exits, and taking steps to protect intellectual property, according to the association’s statement on Tuesday.

The 504-member association will also push for creating price-index models and exploring “more reasonable price-formation mechanisms at home and abroad” using methods such as futures contracts, according to the statement.

Solar panels, electric vehicles and lithium-ion batteries are known as China’s “new three” sectors because they represent a departure from three older export sectors: clothing, furniture and home appliances.

The EU has already launched anti-subsidy probes on Chinese electric vehicles, and last week the US also proposed high tariffs on made-in-China products. On Wednesday, the Office of the US Trade Representative proposed that increases slated to take effect this year would do so on August 1, and that increases slated for 2025 and 2026 be effective from January 1 of those years.
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