Over the past decade, China's photovoltaic (PV) industry has grown into a global leader in technology, quality, brand recognition, and scale. It has become one of the most prominent examples of China’s emerging strategic industries. However, since 2011, the sector has faced significant challenges, entering a tough phase marked by overcapacity, intense competition, and trade barriers.
2012 was particularly difficult for the global PV industry. A combination of factors—including excessive production, uncontrolled market competition, trade protectionism, and the lingering effects of the financial crisis—led to a sharp decline in module prices, falling by 10–15% each quarter. Many companies struggled with rising inventory, mounting receivables, and continuous losses. According to official statistics, the total loss of Chinese PV module manufacturers in the first three quarters of 2012 reached 20 billion yuan, posing a serious threat to the long-term sustainability of the industry.
Faced with these challenges, the Chinese central government took notice and began closely monitoring key regions and companies within the PV sector. Senior officials from the State Council and various ministries conducted extensive investigations to better understand the situation and gather feedback from industry players. On December 19, 2012, Premier Wen Jiabao chaired a State Council executive meeting that outlined five key policy measures aimed at promoting a healthier and more sustainable development path for the PV industry.
Gao Jifan, Chairman and CEO of Trina Solar, expressed his appreciation for the positive direction set by the State Council. He emphasized the importance of focusing on the five new policies, highlighting the need for the industry to prioritize product quality, innovation, and fair competition. "We strongly oppose any form of unfair or destructive competition, such as selling below cost, and we also reject trade protectionist practices that hinder industry progress," he said.
Gao further pointed out that during this period of widespread losses, companies must avoid short-sighted strategies like cutting prices to survive. Such actions not only harm their own growth but also distort the true cost of PV products. This leads to inaccurate assessments of grid-connected tariffs, which can deviate from a reasonable downward trend and negatively impact investment returns in solar projects. In addition, some companies may try to gain temporary relief through trade protection, but this approach does not support long-term industrial development.
To ensure sustainable growth, Gao stressed the importance of fair competition, free trade, and consistent policy support. First, governments should base feed-in tariffs on the real cost of PV products to encourage innovation and investment. Second, companies must focus on quality, efficiency, and R&D rather than engaging in cutthroat competition. Finally, the entire industry chain should work together through international cooperation to achieve grid parity and transition toward a more sustainable energy future.
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