China aiming to Increase Solar Plant Capacity to Dodge Trade Barriers

Published Date : Jul 16, 2015

The Chinese solar industry is expanding at a high rate. One of the latest adopted by the manufacturers in the solar industry is to ship solar panels via other Asian countries in order to dodge trade restrictions laid down by the Western markets. Manufacturers in the China’s solar industry are currently aiming to dodge the European Union and United States laid trade barriers by locating approximately tenth of their production capacity overseas.

However, this tactic is not risk free, as the European Commission is currently investigating if the Chinese manufacturers are shipping solar panels through Malaysia and Taiwan to evade the trade restrictions. According to a ruling in the U.S., in 2014 December the expanded protection by duties included products from Taiwan, in which producers from China purchases previously some solar cells.Furthermore, the United States has also finalized on their plans to add tariffs to any solar panels which are assembled/made in China despite the origin of the solar cells used.

These trade restriction associated tensions are the result of China’s emergences as the dominant producer in the world for solar products. At present, China holds a total of 70 per cent share of supply of solar panels in the global market. According to the investor relations directors, Sebastian Liu, products from their Malaysian plant are mostly exported to the U.S. and they are now focusing on the global demand, he further said that this is permanent, however, they want the manufacturing at the global level to prevent any risks which are posed by an individual production location.

In 2013, the European Union approved a deal which set a least price and volume limit on importing solar products made in China. Similarly, in Canada during March there were imposed provisional duties placed on the solar panels made in China. While the U.S. ruled in the month of January that PV imports from China and Taiwan to be sold at a cost which was below the fair market value as it harmed the solar panel manufacturers in the U.S.