Chinese experts asserted on Monday that the purported collaboration between South Korea and the United States to tackle what they term as “excess capacity” in China’s photovoltaic (PV) industry forms part of a strategic narrative aimed at magnifying “overcapacity” concerns in China’s new-energy vehicles, lithium battery, and PV sector. This narrative, they argue, is designed to hinder China’s technological advancement and industrial progress.
Observers contend that the alleged spillover effect of China’s “excessive production” is a pretext concocted by certain US politicians for political reasons, particularly amid the US crackdown on Chinese PV companies.
The reaction ensued following a South Korean report indicating that senior diplomats from South Korea and the US are collaborating to address the issue of “excess capacity” in China’s PV industry, with the aim of shielding the industries of both nations from the adverse effects of Chinese solar energy product overproduction.
The escalating growth of China’s PV-related exports has fueled increasing anxiety among many nations. According to a report from the Yonhap News Agency, officials from South Korea and the US discussed the necessity for a joint response to potential repercussions stemming from the so-called “overcapacity” in China’s solar industry during energy security talks held in Houston, Texas, on April 30. Kim Hee-sang, South Korea’s Deputy Foreign Minister for Economic Affairs, was cited in the report conveying this sentiment.
Discussions primarily centered on a two-pronged approach, involving each country’s implementation of import control measures against China’s provision of excessive subsidies, and cooperation in the development of more technologically competitive products, as reported by the Yonhap News Agency.
Experts interpret this move as the US and South Korea fostering rhetoric surrounding “overcapacity” aimed at China’s solar industry, with the intention of supplanting China’s industry with their own producers, according to Han Bing, an expert at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences.
Han contended that the US and South Korea anticipate creating obstacles for China’s PV firms in expanding abroad by imposing trade barriers.
In light of these developments, experts cautioned against South Korea’s emulation of the US in adopting stringent economic and trade restrictions against China, warning that such an approach would ultimately rebound on the country itself, with local businesses and ordinary citizens bearing the brunt.
Undeniably, China’s capacity and technological advancements in the clean energy sector have emerged as formidable drivers propelling the global energy transition, experts emphasized.
Citing a report by the International Renewable Energy Agency, experts noted that the average kilowatt-hour cost of global wind power and photovoltaic power generation has plummeted by more than 60 percent and 80 percent, respectively, over the past decade, with a significant portion attributed to China’s innovation, manufacturing, and engineering prowess.
Industry data reveals that China’s PV production capacity accounts for nearly 90 percent of the world’s total.
Experts commended the endeavors undertaken by Chinese companies to intensify research and development efforts aimed at cultivating new PV cell techniques capable of enhancing efficiency and reducing costs.
China stands as the world’s renewables powerhouse, projected to account for almost 60 percent of the new renewable capacity anticipated to come online globally by 2028. Its role is deemed pivotal in achieving the global objective of tripling renewables, as the country is expected to install more than half of the new capacity required worldwide by 2030, according to a report by the International Energy Agency.
Chinese PV products boast strong competitiveness, owing to the accumulation of technology and production capacity. Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, affirmed to the Global Times on Monday that exports have facilitated cost declines, propelling solar PV to become the most affordable electricity generation technology.