Electrical Equipment / Components & Telecoms

According to Huacheng Import and Export Data Observation, in 2022, China's photovoltaic products, along with electric vehicles and lithium batteries, will form the "new three types" of foreign trade exports. On March 28th, at the 2023 China International Clean Energy Expo and New Energy International Cooperation Forum, the "White Paper on the External Development of China's Photovoltaic Industry" released by the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products pointed out that after more than a decade of hard work, China's photovoltaic industry has developed from being "three headed" in equipment, raw materials, and application markets to being the world's first in manufacturing, installed capacity, and power generation. In recent years, the international environment has become more complex and severe, the impact of the epidemic continues, and the downward pressure on the economy has increased. However, in the context of global energy transformation and carbon neutrality, China's photovoltaic industry scale, photovoltaic installation scale, and foreign trade still achieve positive growth, contributing "China's strength" to the global move towards a low-carbon society.

The White Paper states that China has played a key role in the significant reduction in global solar and wind energy installation costs and power generation costs. Driven by China, the global cost of solar photovoltaic installation in 2021 has decreased by about 82% compared to 2010, while the cost of onshore and offshore wind power installation has decreased by about 35% and 41%, respectively. The cost of power generation has also significantly decreased.

According to Huacheng Import and Export Data Observation, in terms of exports, the "White Paper" shows that photovoltaic foreign trade shows characteristics such as continuous expansion of export scale and diversification of export markets. From 2012 to 2022, the cumulative export value of photovoltaic modules in China exceeded 220 billion US dollars, and the cumulative export volume of modules exceeded 575GW. At present, China's photovoltaic modules have been exported to over 200 countries and regions worldwide, covering five continents. In 2022, the export volume of modules will account for 53.5% of China's PV module output. The concentration ratio of the top ten export markets will decline from 80.8% in 2016 to about 70% since 2018. The ranking of major export markets will continue to adjust with the changes in national policies, indicating that China's dependence on foreign PV products is declining. Affected by the energy crisis caused by the Ukrainian crisis in 2022, the demand for photovoltaic power generation in Europe will increase dramatically. China's share of photovoltaic exports to Europe will exceed half of the overall export market.

In terms of overseas investment, China's photovoltaic enterprise layout has also shown diversification. Zhang Sen, Secretary General of the Solar Photovoltaic Products Branch of the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, stated that since 2016, the investment focus of photovoltaic enterprises has extended to upstream manufacturing, and the product manufacturing supporting system in Asia Pacific regions such as Vietnam, Malaysia, and Thailand is becoming more perfect. Meanwhile, according to Huacheng Import and Export Data Observation, the pace of China's new energy enterprises' 'going global' is constantly accelerating. In 2022, China signed approximately 136 solar photovoltaic power generation projects overseas, with project amounts approaching 10 billion US dollars, a significant increase of 74.6%.

Regarding the external development trend of China's photovoltaic industry, the White Paper believes that the global photovoltaic application market will continue to maintain high demand in the next decade. On the basis of stable scale and technological advantages, China's photovoltaic industry is expected to continue to maintain a high proportion and high value of global supply, stabilize global market share, and make China's contribution to the global energy transformation.

According to the analysis in the White Paper, the export market for photovoltaic products still maintains high demand. The Russia-Ukraine conflict triggered the energy crisis and the rising price of traditional energy, which forced the acceleration of the global energy transformation and the development of new energy industry. For the sake of energy security, countries began to increase and accelerate the deployment of renewable energy. At present, countries have raised their demand targets for new energy photovoltaic installations, and the global solar energy industry is accelerating its development. For example, the Energy Independence Recommendation released by the EU Photovoltaic Association has launched 8 measures to promote the terawatt level photovoltaic target. At the same time, it is predicted to increase the expected installed capacity of EU photovoltaics from 672GW to 1000GW by 2030, with an average annual increase of 90 to 100GW.

The development of China's photovoltaic industry also faces certain challenges. The White Paper points out that market requirements are strict, and trade barriers increase export costs. In the past two years, China's photovoltaic products have faced challenges in export. Some countries have put forward more and higher requirements for low-carbon certification, carbon footprint, supply chain traceability, ESG information disclosure, etc., as reported by Huacheng Import and Export Data Observation.

To assist the high-quality and sustainable development of the photovoltaic industry to the outside world, the White Paper proposes the following suggestions:

Optimize the industrial environment. Establish and improve a supporting service system for standards, patents, testing, certification, etc., strengthen the management and services of the photovoltaic industry, support industry self-discipline and cooperation, and actively participate in the formulation of international standards; Establish and improve a standardized, professional, fair, scientific, and authoritative mechanism for coordinating overseas competition and managing overseas markets for photovoltaic products.

Persist in innovation and enhance core competitiveness. Guide and encourage enterprises to increase investment in research and development, strengthen basic research on industrial technology, accelerate key core technologies such as certain components, play a leading role in supporting large enterprises, support small and medium-sized enterprises in developing "specialized, refined, and new" products, and firmly grasp the initiative of competition and development in the photovoltaic industry in their own hands; Guide photovoltaic enterprises to enhance their awareness of intellectual property strategy, carry out international intellectual property strategy layout work in advance, improve the construction of intellectual property system, strengthen patent technology reserves, and establish a strong patent portfolio through patent application, transfer, and other means.

Intensify efforts to establish a high-level ESG system. Develop an ESG standard system that is in line with China's actual situation, and increase the importance that photovoltaic enterprises attach to ESG work. Encourage enterprises to establish ESG management committees, leverage the ESG management functions of enterprise decision-makers and managers, make ESG matters an important component of enterprise governance, clarify the internal structure and responsibilities of ESG management personnel, formulate long-term ESG management policies for the company, and truly integrate ESG governance into enterprise strategy. Huacheng Import and Export Data Observation Report.