Dateline: December 18, 2025

XI’AN, China — Amidst a complex landscape of growing international trade friction and domestic structural adjustments, Chinese commerce officials have called on the nation’s photovoltaic (PV) industry to bolster confidence, drive innovation, and enhance industry order to secure its future growth. The remarks were delivered at the 2025 PV Industry Annual Conference held in Xi’an on Thursday.

The solar photovoltaic industry (the PV industry) is at an important point in its growth. While China remains the primary supplier and manufacturer of solar photovoltaic products on a global basis, the Solar PV industry is currently experiencing “another phase of adjustment” as well as both internal & external challenges.

A Dual Squeeze: Increased Global Tariffs
In his keynote presentation, Gu Yu, Deputy Director of China’s Ministry of Commerce’s Bureau of Trade Remedy and Investigation, indicated that there are two patterns occurring within global trade that raise serious concern.

The first is the strengthening of restrictive measures by developed economies. In the United States, the newly enacted “One Big Beautiful Bill Act” significantly revises clean energy incentive rules, systematically excluding entities with specific foreign backgrounds—particularly Chinese—from eligibility for tax credits. U.S. authorities have also extended high anti-dumping and countervailing duties on PV products from Chinese-backed manufacturers in Southeast Asian countries like Vietnam, Cambodia, Malaysia, and Thailand, and initiated new investigations targeting cells from India, Indonesia, and Laos.

Simultaneously, the European Union is advancing its localization agenda through the Net-Zero Industry Act (NZIA). The act’s implementing regulations, effective from late 2025, mandate that a portion of renewable energy auctions incorporate “resilience contribution” requirements. For solar technology, this can mean disqualifying projects where the final assembly is in a “third country” or where more than a specified number of key components originate from there—measures widely seen as targeting over-reliance on Chinese supply. Italy has already moved to explicitly bar Chinese-assembled PV components from its subsidy programs, becoming the first EU member to implement such restrictions.

The second trend is the resurgence of trade friction with emerging economies. As markets in East Asia, South Asia, Africa, and the Middle East become bright spots for Chinese PV exports, local governments are increasingly sensitive to trade diversion and are taking steps to nurture their domestic industries. In 2025 alone, India, Turkey, and Jordan have initiated multiple anti-dumping investigations into Chinese solar products such as encapsulation materials, junction boxes, panels, aluminum frames, and cells, involving approximately $800 million. India’s push for supply chain independence is further exemplified by its Approved Models and Manufacturers List (ALMM) policy, which mandates the use of domestically listed products for government projects.

Prescription for Resilience: Confidence, Innovation, and Order
Confronted with these multifaceted challenges, Deputy Director-General Gu Yu presented a three-fold strategy for the industry.

1. Uphold Long-termism and Bolster Development Confidence.
The major drivers of the industry remain intact, with representatives from China continuing to highlight its significant impact on the future growth of the nation and the need for Global Energy Transition to a greener world, along with strong governmental support through Policies to achieve Carbon Peak and then neutrality – thereby providing the most ‘confidence’ for the sector. Even within current challenges, the transition to the next level of High Quality Development has been consistent throughout.

2. Persist with Innovation-Driven Growth and Foster Win-Win Cooperation.
Innovation is deemed critical for individual corporate survival. Enterprises are urged to increase R&D investment, build competitiveness based on quality and technology, and provide superior “Chinese solutions” to the global market. This innovation should extend beyond technology to include novel solutions for chronic issues like supply-demand imbalances. Collaboration, using the green transition as a “common language,” is key to expanding mutually beneficial partnerships and integrating with local industries.

3. Optimize Industry Order and Promote High-Quality Development.
Acknowledging that “self-help earns the help of the world,” the call is for proactive industry self-regulation. Industry associations are tasked with strengthening self-discipline, curtail “inward-rolling” (neijuan) cutthroat competition, and standardize export秩序. They must also enhance public services for trade friction response, including early warning mechanisms and coordinated action.

Simultaneously, companies are advised to focus on internal governance, build robust compliance teams, and improve risk management capabilities. This internal focus is crucial as the domestic industry grapples with overcapacity and a damaging price war. Data indicates that product quality has suffered, with component qualification rates dropping significantly in recent years due to cost-cutting measures. Authorities have intervened, with six ministries jointly holding forums to regulate competition and push for the orderly exit of outdated capacity.

Conclusion: Navigating the Crossroads
While the Chinese PV sector deals with both the effects of global protectionism and excess supply on its home market, its leaders are pushing hard for continued growth in this important area through increased investment in innovation, better collaboration, and a more structured way of doing business (i.e., creating and operating a market). The success of the overall industry in finding ways to succeed during this time will shape how fast and how cheaply clean energy will transition globally.