China’s senior officials have sworn to curb low price competition and surplus capacity in the sun sector, because the authorities start implementing measures aimed at stabilizing supply chains and re -balancing the market.
The Chinese Ministry of Industry and Information Technology (MIIT) held a high-level meeting last week with leaders of the solar industry, indicating the government’s plans to implement guidelines from the Central Financial and Economic Affairs Commission. The authorities strive to curb ‘disorderly’ competition and lead the sector to more sustainable growth.
Miit Minister Li Lecheng was chairman of the meeting, including 14 large sun companies such as Longi, Tongwei, GCL, Trina, Ja Solar and Sungrow, as well as the China Photovoltaic Industry Association (CPIA). The session followed the sixth economic policy meeting of the Central Committee on 1 July, where senior officials call for action on “irrational” prices, the removal of outdated capacity and improvements in industrial quality.
According to the official Miit statement, the solar industry “must be strongly implementing the decisions of the central government, resolutely combating low-price of disorderly competition and promoting the ordered output of outdated capacity.” Li noted that self -discipline in the industry and forced companies to concentrate on innovation, product quality and long -term competitiveness.
The meeting took place in the midst of broader national discussions about ‘Ratrace’, a term in China that was used to describe very competitive and inefficient environments, also known as ‘involvement’.
In the run-up to the Miit meeting, the Staatsloop People daily published a commentary on the front page that criticized the destructive prize wars and calls for structural reforms to restore the market order.
Some parts of the supply chain have already started adjusting. In the glass segment, 10 manufacturers – including Xinyi Solar and Flat Glass – announced plans to reduce production in July by 30% to reduce oversupply.
Consolidation seems to be underway in the Polysilicon segment. Co CEO from GCL Technology said at a recent grant that large producers are investigating mergers and acquisitions to absorb smaller competitors. Daqo New Energy repeated that image in a statement of 1 July, which expressed openness to cooperation solutions.
Figures from the China Non -Ferrous Metal Industrial Association show that the prices of Polysilicon have remained under the costs for more than a year, with at least four producers who suspend the activities in the first half of 2025.
Investors responded quickly to the policy signals. Solar shares rose on mainland China and Hong Kong after the Miit meeting. Shares in nine Chinese sun companies, including Tongwei, flat Glass and Eging PV, touch their daily trading limits on July 3. Daqo Energy won more than 15%, and the shares in Hong Kong on the GCL rose by 9%.
Yet analysts remain careful with the pace and the scale of restructuring. Although central policy makers have drawn a clear line, the overcapacity remains anchored in the Chinese solar chain. Restructuring in silicon, waffle and module production can take months or years to come into effect.
The position of the government is clear: the Chinese sun sector, once a symbol of the success of industrial policy, is now confronted with pressure to switch from rapid expansion to quality -oriented consolidation.
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