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[Text/Ruan Jiaqi, Observer Network]

In March this year, when U.S. Treasury Secretary Janet Yellen was hyping up the topic of China's so-called "overcapacity", she mentioned an American solar cell manufacturing plant. Yellen boasted at the time that the American factory, which was closed seven years ago because it could not compete with Chinese companies, would reopen thanks to the clean energy subsidies of the Inflation Reduction Act. She also threatened that she would not allow American companies with insufficient competitiveness to go bankrupt after Chinese products flooded the U.S. market.

However, the latest survey released by British media Reuters on the 17th pointed out that even with federal subsidies, American photovoltaic manufacturers still struggle in competing with Chinese manufacturers.

A Reuters analysis of corporate statements, government documents and interviews with eight companies and their researchers found that Chinese companies are buildingSolarManufacturing plants are proliferating, and Chinese companies' production of photovoltaic products in the United States is expected to grow rapidly, which will enable China to maintain its dominant leading position in this emerging industry.

It is reported that next year, Chinese companies' solar panel production capacity in the United States will reach at least 20 gigawatts, enough to meet about half of the demand in the US market.

On August 28, 2023, anew energyWorkers at the company are stepping up production of a batch of solar photovoltaic cell modules for export overseas. IC Photo

The samples included in the analysis reportedly includeJinkoSolar、Trina Solar、JA Solar、LONGi Green Energy, Hao Neng Optoelectronics, Runyang Photovoltaic, and Bowilt, among other seven solar manufacturers supported by Chinese companies.

Although this investigative report continues to exaggerate the so-called concerns about the US influence on China and the solar industry's dependence on China, Reuters has to admit that compared with their US competitors, photovoltaic companies with Chinese investment and factories have obvious advantages, such as the establishment of supply chains for raw materials polysilicon and solar product components, as well as low-cost government financing.

Speaking of new factories, Paula Mints, founder of solar industry research firm SPV Market Research, lamented: "It's hard to imagine anyone, especially a manufacturer starting with nothing, being able to do this work as quickly as the Chinese manufacturers." She and another researcher added that Chinese investment will help the domestic solar manufacturing industry in the United States mature and create more jobs.

David Feldman, a solar market researcher at the U.S. Department of Energy's National Renewable Energy Laboratory, also noted that Chinese companies are experienced in building new factories and establishing supply chains.

Reuters said that in places where Chinese companies have built factories, including Texas, Arizona, Ohio and North Carolina, local and state government officials have welcomed these investments.

In contrast, many solar factories in the United States without Chinese capital have lagged behind in development. Reuters reported last year that up to half of announced U.S. factories may not meet production targets.

U.S.-based Convalt began construction of a new plant in upstate New York in 2022 with the goal of achieving 10 GW of capacity, but progress on the plant stalled a year ago.

Testifying before the U.S. International Trade Commission in May, its CEO Hari Achuthan blamed the incident on China's low-price "shock," claiming that global panel prices had plummeted by half to below Cornwall's production costs, hampering its production.

But the response from the US Department of Energy clearly proved that Ashutan's accusation was unfounded. The department admitted that it would take time to develop the US's own solar supply chain, and for now the US must rely on the expertise of foreign companies.

Blue solar photovoltaic panels cover the hillside in Yuncheng, Shanxi Province, on January 22, 2024. IC Photo

So far, Chinese companies that have built factories in the United States have reportedly invested mainly in component production, which is to assemble solar cell modules imported from Asia into panels.

Reuters cited data from international energy consulting firm Wood Mackenzie, reporting that Chinese companies are currently the largest suppliers of imported solar and electric vehicle battery components to the United States, and that factories invested by Chinese companies account for one-fifth of new solar factories built in the United States since the implementation of the Inflation Reduction Act. American project developers interested in low-cost supply have welcomed Chinese producers.

However, the U.S. government has been abusing trade protectionism, and its market-distorting behavior has become increasingly rampant in recent years. Having already imposed a 25% tariff on Chinese solar cells, the Biden administration announced in mid-May this year that it would further increase tariffs on top of the existing 301 tariffs on China, doubling the tariff on solar cells imported from China to 50%, and canceling the tariff exemption for bifacial solar panels from four Southeast Asian countries.

Reuters said the move is aimed at protecting domestic US manufacturers from competition from Chinese goods and making projects seeking subsidies more inclined to choose US-made products.

Tim Brightbill, a lawyer for the U.S. Solar Manufacturing Trade Council, defended the new tariffs, saying they just wanted to give U.S. manufacturers a "chance" to compete with leading Chinese companies. Opponents criticized it as an unfair move to impose tariffs on only certain imported cells, which would stifle the construction of U.S. factories.

On May 14, a spokesperson for China's Ministry of Commerce stressed that the US abused the 301 tariff review procedure for domestic political considerations and further increased the 301 tariffs on some Chinese products, politicizing and instrumentalizing economic and trade issues. This is a typical political manipulation, and China expresses strong dissatisfaction with this. The WTO has long ruled that the 301 tariffs violate WTO rules. Instead of correcting it, the US has persisted in its own way and made one mistake after another.

The Ministry of Commerce pointed out that the US's increase in 301 tariffs violates President Biden's commitment of "not seeking to suppress or contain China's development" and "not seeking to decouple from China", and is not in line with the consensus reached by the two heads of state. This will seriously affect the atmosphere of bilateral cooperation. The US should immediately correct its wrong practices and cancel the tariff increase measures on China. China will take resolute measures to defend its own rights and interests.

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