This year has witnessed a contentious relationship between China and the global solar community. Dumping claims abound, tariffs have been levied and legal action is pending. Suffice it to say, the solar industry does not look kindly upon China. Why is this relationship so contentious? And why is it only getting worse?
The Chinese government has identified solar development as a favored industry. Recognizing the international growth potential, they sought to capitalize on the open market and have actively subsidized Chinese solar corporations. Much like U.S. initiatives, Chinese officials understood that the industry needed a financial foundation to get off the ground. However, unlike other global competitors, it appears that the government subsidies might have sustained companies that over produced, supplying an excess of solar panels that have driven overall industry profitability into the ground.
This is problematic because, it is claimed, some of these companies who have been actively dumping (importing below a fair market rate) in Europe and the U.S., would have gone out of business without government assistance. So, the fact that they were unable to build a successful business model leading to self-sufficiency adds insult to the injury of proactively debilitating the global solar market. While many nations participating in solar development share feelings of misrepresentation and undermining, the Chinese government and the corporations it has supported disagree with the assessment.
Recent fierce denials from major Chinese solar firms have surfaced. Defending themselves, they explicitly reject the notion that they benefited from illegal subsidies, with Yingli Green Energy issuing a statement, “We receive financing at the usual market rates and act according to international accounting standards and norms.” China itself continues to highlight how it maintains financial support for only 12 solar companies, some of which are not in the top ten Chinese producers. The rationale being that this is evidence that they are proactively working to consolidate the industry within the country and prevent over production. Despite these vehement denials, the international community seems unconvinced.
In many ways it appears that the Chinese solar conundrum is just heating up. In the best interest of the industry, many producers hope these issues can be resolved quickly. The outcome remains to be seen.