China’s solar industry at an inflection point

The development of China’s solar photovoltaics sector may be one of the best witnesses of China’s economic rise and globalization. Having benefited from a free cross-border flow of talent, capital, and technology, China’s solar PV sector took over decades of Western expertise and began to dominate the global market in as short as a decade. Rapidly formed manufacturing bases along the Yangtze Delta exemplified the economies of scale theory in the late 2000s, significantly bringing down the costs and providing the world with an influx of solar PV supplies. While it prospered upon the many gifts of globalization, the industry also began to encounter many backlashes that globalization itself had encountered. Disenchanted industry “losers” prompted Western governments to impose the first round of antidumping/countervailing duties in the early 2010s, an action not only bankrupted many Chinese “winners” but also significantly reshaped China’s solar PV supply chains for tariff circumvention purposes. 

Fast forward to the 2020s, the industry faces even more complex uncertainties. Not only is China’s market concentration more pronounced, but a globalization rooted in economic efficiency that shaped decades of cost-optimized value chains stands now at a significant inflection point. Western governments began to implement protectionist tariffs while granting economic subsidies to domestic industries to spur industry development. How will China’s solar companies respond to these uncertainties? What are the implications for the domestic industry and for its globalization efforts?  

By: Linxiao Zhu


China , China Energy Programme