China's Solar Energy Industry Forces Western Manufacturers to Downsize, Retreat From Market
Yicai Global
/SOURCE : Yicai
China's Solar Energy Industry Forces Western Manufacturers to Downsize, Retreat From Market

(Yicai Global) April 17 – China has shocked the global solar energy business, claim the US media reports, adding that the Western companies are finding themselves unable to compete with China's solar companies, and they have even begun to make layoffs.

China's policy changes and business decisions may also have global implications. From 2007 to 2012, China's solar power generation growth has been more than 10 folds. Six of the world's top 10 solar panel manufacturers come from China, including the top two. This growth has forced many solar panel makers in the United States and Europe to retreat hastily, reported, a news network hosted by Xinhua News Agency.

Last summer, China considered cutting subsidies to domestic solar panel buyers after China's solar panel makers cut prices by more than a quarter, causing global prices falling sharply. Western companies find it difficult to compete with and have begun to make layoffs.

But economists and business groups have warned that China's industrial ambitions have entered a new stage with far-reaching impacts. With the government's strong financial resources, increasingly mature technology and the comprehensive plan to reduce dependence on foreign companies, China intends to become the leader of renewable energy, big data, self-driving and other industries of the future.

It has made big strides in solar industry. China now has two-thirds of the world's solar energy production capacity. Its products efficiency for converting solar energy into electricity is catching up with the panels produced by the US, German and South Korean companies. Since China has also purchased half of the world's new solar panels, it is now in control of the market.

For much of the past century, the ups and downs of the US economy determined the employment or poverty of Chilean copper miners or Malaysian rubber farmers. China's policy changes and business decisions are now likely to have this global impact that was once introduced by the power intermediaries of Washington, New York and Detroit.

From an environmental point of view, China's promotion of solar energy is beneficial to the world. The price of solar panels has fallen by nearly 90 percent over the past decade. Many of the solar panels in the US family backyards are made by Chinese companies. But for the solar industry, the expansion of the Chinese companies may mean that prices in a very long period of time are low, and all others had to retreat.

China now hopes to copy its solar industry growth model to other areas. Under a plan called "Made in China 2025," China hopes to achieve self-sufficiency in several industries in seven years, including aircraft, high-speed rail, computer chips and robots. The plan echoed the solar panel and wind turbines boom ten years ago, but it needs more financing.

US and European business groups have warned that the "Made in China 2025" program will make Western companies operating in a wide-ranging spectrum face the kind of government background competition that has changed the solar industry.

Follow Yicai Global on
Keywords: China , USA , EU , Business , TECHNOLOGY , Solar