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(Bloomberg) — Leaders from some of China’s top solar manufacturers called for increased government action to guide the industry as excess production capacity slashed prices and profits.
China’s central government should help coordinate the solar industry’s development to help companies avoid over-competition, Trina Solar Co. Chairman Gao Jifan said at a conference in Shanghai. The government should guide auctions to protect manufacturers from low bids, GCL Technology Holdings Ltd. Chairman Zhu Gongshan said in a separate speech.
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China’s solar companies, which control more than 80% of global output, are seeking to escape a slump after a rapid build-up of factories has outpaced demand. Firms have laid off workers and shut manufacturing lines as prices have plunged in some cases below production costs.
“We’re killing each other in bloodshed competition,” Zhu said in a speech at the SNEC Photovoltaic Power Conference, the industry’s largest annual gathering. “We can’t be short-sighted, the sector needs to reach a consensus on comfortable profit margins.”
Solar companies have been calling for increased government action for months. President Xi Jinping in May warned that an excess of investment into the new energy sector could be counterproductive. The government has also taken steps to ensure demand for panels stays strong despite increasing grid constraints.
Trina’s Gao blamed the industry’s woes on a period of “blind investment” that’s led to falling prices and would force consolidation in the sector. He said local government officials needed to make sure businesses were robust when they tried to attract investment.
“The root cause is blind investment and each enterprise acting on its own with the capital market trying to push them forward,” Gao said. “Local governments are trying to attract business, and banks want to lend too much.”
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