Chinese photovoltaic industry thriving despite US tariff

Rows of solar photovoltaic panels are seen in Shangluo, Northwest China’s Shaanxi Province on Tuesday. Covering an area of 700 mu (46.67 hectares) with a total capacity of 35.5 megawatts, the photovoltaic facility can produce 35.5 million kilowatt-hours per year of electricity, with revenue reaching 30 million yuan ($4.67 million). Photo: IC

A US tariff on China-made photovoltaic (PV) power products will have little effect on the nation’s PV industry thanks to an expanding domestic market and robust global demand, experts said.

On May 9, the US announced a 25 percent tariff on $200 billion worth of Chinese imports, including PV products. However, Chinese observers said that the industry will remain strong despite the tariff, as the US only represents a small fraction of China’s PV exports, and China has already established other markets with strong demand.

In the first four months of this year, China’s exports of PV products rose 81 percent year-on-year to 20.6 gigawatts (GW), according to a report released by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME). According to the report, the biggest export markets included the Netherlands, Vietnam, India and Australia.

“Due to anti-dumping and countervailing sanctions imposed by the US, the US market has been contracting for Chinese PV exports in recent years,” Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times, “Also, US demand for PV products has always been relatively weak because of its supply of cheap natural gas.”

The US began imposing anti-dumping and countervailing duties on Chinese PV products since 2011 and trade volume has declined ever since. In 2018, only 61 megawatts of PV modules were exported to the US, according to CCCME.

Lin also said that because of the duties in the US, a good number of Chinese PV companies that targeted the US market have shifted manufacturing to other countries including Southeast Asian and European countries to avoid US sanctions.

The boom in PV exports in the first four months is also thanks to the termination of anti-dumping and countervailing sanctions in the EU, which has become the biggest export market for China, Lin said.

According to a report by the CCCME, free trade of PV products between China and the EU resumed in September 2018, and bilateral trade volume doubled in the following quarter. The shift in the EU contributed 3.54 GW to China’s total PV exports in the first quarter increasing 957.7 percent year-on-year.

“The EU has a growing demand for PV products because it has one of the highest environmental standards in the world,” Lin said. “Likewise the domestic market for PV models is also growing. One can predict China’s PV export market will continue its robust growth in the coming years.”