From the "old three items" represented by clothing, home appliances, and furniture to today's "new three items", China's foreign trade structure continues to be optimized and upgraded, reflecting the new trend of high-quality economic development in China.
According to data recently released by the General Administration of Customs of China, in the first half of this year, the total export of "three new" products such as electric passenger vehicles, lithium batteries, and solar cells increased by 61.6%, driving China's overall export growth by 1.8 percentage points.
From the "old three items" represented by clothing, home appliances, and furniture to today's "new three items", China's foreign trade structure continues to be optimized and upgraded, reflecting the new trend of high-quality economic development in China.
Since the beginning of this year, the momentum of China's new energy vehicles "going overseas" has continued to be strong. According to data from the China Association of Automobile Manufacturers, from January to June this year, China exported 534,000 new energy vehicles, a year-on-year increase of 160%.
Benefiting from the rapid development of the new energy vehicle market and energy storage market, China's lithium battery and solar battery "going overseas" has also entered the "fast lane". According to data released by the China Automotive Power Battery Industry Innovation Alliance, in the first half of this year, the cumulative export of batteries by Chinese power battery companies reached 56.7GWh (gigawatt hours), and the cumulative export of energy storage batteries reached 6.3GWh.
The global solar battery industry has experienced rapid transformation and development over the past decade, driven largely by China's aggressive efforts and growing dominance in global markets. As concerns over climate change have intensified worldwide, renewable energy technologies like solar power have taken on increasing strategic importance. At the same time, China has utilized its low-cost manufacturing advantages and massive industrial scale to emerge as the undisputed global solar leader across the entire supply chain from polysilicon to modules.
However, recent geopolitical tensions and supply chain disruptions brought on by the COVID-19 pandemic have disrupted China's solar export model and forced a reconsideration of how the industry is structured globally. Rising nationalism in some markets has led to increased trade barriers against Chinese exports while companies have sought to diversify manufacturing locations for greater resilience. As major solar companies expand production capacity outside of China, this signals the beginning of a new phase in the globalization of the industry with China still playing a central role but facing greater competition internationally.
China's Solar Industry Development Post-2022
In 2022, China saw its domestic solar installation capacity reach a new record high even as external headwinds increased. According to the China Photovoltaic Industry Association (CPIA), a total of 54 GW of new solar power installation was completed nationwide during the year, exceeding the 50 GW added in 2021. This brought China's total installed solar capacity to over 365 GW by the end of 2022, far ahead of other countries and cementing its position as the world's largest solar market.
Domestic demand has remained robust due to China's continued emphasis on developing its own clean energy sector as part of its climate commitments. The country is aiming to have over 1,200 GW of installed renewable energy capacity by 2030 including well over 300 GW of solar alone. Several large-scale ground-mounted and floating solar projects were commissioned across China in 2022 reflecting this push. Growing distributed solar adoption on rooftops of residential and commercial buildings has also been a major driver of capacity additions.
On the production side, 2022 saw China's annual polysilicon output surpass 500,000 metric tons for the first time according to estimates. This was driven by the ramp-up of numerous large-scale polysilicon plants, including those operated by top manufacturers like GCL-Poly, Xinte Energy, and Daqo New Energy. Crystalline silicon solar cell production also hit a new high of over 210 GW during the year based on CPIA data even as prices remained elevated due to supply chain issues.
However, module exports from China declined 13.5% year-on-year to 49.3 GW in 2022 as per CPIA statistics amid intensifying trade and geopolitical tensions with the US, EU, and Australia. China's solar companies faced punitive tariffs, import quotas, and heightened regulatory scrutiny in key overseas markets that have been trying to curb reliance on Chinese supply. Rising logistics and raw material costs as well as the China-specific impacts of COVID lockdowns also pressured margins and shipments internationally.
Chinese solar giants like JinkoSolar, LONGi, Trina Solar, and JA Solar reported lower export sales revenues in 2022 financial results compared to prior years. They responded by expanding production facilities in Southeast Asia, Europe, and the US to manufacture closer to major markets. For example, JinkoSolar commissioned a 2 GW solar module plant in Vietnam, while LONGi is establishing a multi-GW factory in Malaysia. Trina Solar started module production in Thailand and JA Solar has projects in Turkey and Egypt.
This diversification reflects China moving to maintain its technological leadership through global supply chains rather than relying solely on its export model. Key companies are also increasing upstream integration to secure critical material supplies. For example, GCL-Tech acquired lithium deposits in Argentina to develop electric vehicles and energy storage applications. Xinte Energy inked a deal to acquire Canadian lithium company Lithium Americas. These strategies aim to navigate trade tensions while sustainably expanding internationally.
Major Chinese Solar Players and Their Overseas Expansion
Let us look more closely at some of the major Chinese solar manufacturers at the forefront of driving the industry's globalization:
LONGi Solar - As the world's largest monocrystalline solar wafer, cell, and module manufacturer, LONGi has emerged as one of the most internationalized Chinese solar giants. In 2022, it commissioned the first 3.5 GW production line at its new facility in Malaysia which is planned to double in capacity. The company owns factories in Japan, Australia, and Europe and has sales subsidiaries globally. It supplies high-efficiency solar products worldwide and continues investing strongly in R&D including next-generation technologies like TOPCon cells.
JinkoSolar - A major global solar module supplier, JinkoSolar entered the high-efficiency monocrystalline cell segment in 2022 with 5 GW of capacity. It commissioned the first 2 GW phase of its new Vietnam manufacturing complex. Jinko is also constructing 3 GW of integrated solar cell and module lines in the UAE slated for completion in 2023-24. It has marketing and technical support centers around the world and sales spanned over 130 countries last year.
Trina Solar - This top-tier manufacturer unveiled plans in 2022 to establish 6-8 GW of integrated solar cell and module capacity overseas by 2025 as part of its strategy to supply 40% of products internationally. Its 1 GW factory in Changzhou, Thailand officially began operations producing high-efficiency PERC bifacial modules for global markets. Trina is reviewing additional sites for manufacturing hubs in Southeast Asia and Europe.
JA Solar - The vertically-integrated PV company began cell output at its new Yinan facility in Shandong in mid-2022, ramping monocrystalline PERC cell capacity to 15 GW annually. JA Solar has expanded overseas with a 500 MW solar module plant in Turkey helping Europe's energy transition. It is also building a 5 GW integrated facility in Egypt that is scheduled for completion in 2023-2024. This aims to strengthen the company's presence in the MENA region.
GCL-Poly - As a leading polysilicon manufacturer, GCL-Poly continued augmenting domestic production and overseas resources integration in 2022. It kicked off the construction of a new solar-grade polysilicon plant in cooperation with an Argentine lithium company. GCL-Poly also expanded operational capacity at existing polysilicon facilities in China and Germany to diversify supply security for its own solar cell and module units.
Xinte Energy - As one of China's top producers of both polysilicon and solar wafers, Xinte increased its integrated monocrystalline wafer capacity to 80 GW last year. It accelerated overseas development with a strategic acquisition of Canadian lithium startup Lithium Americas to synergize upstream resources integration globally. Xinte's focus is building industrial clusters across China, Europe, and North America for the sustainable growth of solar and battery supply chains.
This provides an overview of how major Chinese solar companies are proactively responding to both domestic-driven growth and external risks through expanding international manufacturing footprints, securing critical material resources, supporting overseas project development, and strengthening supply chain resilience on a global scale. Larger players especially are adopting regional hub strategies moving beyond reliance on Chinese or single market exports alone as the industry's globalization continues accelerating.
Challenges Remain
While Chinese solar firms have made considerable progress in advancing their global reach, challenges still remain for the sustainable future of Chinese involvement overseas:
Geopolitical tensions between China and key Western markets like the US and EU show no signs of abating. There is a risk of heightened trade barriers, restrictions, and political backlash against greater Chinese investment and market penetration globally.
Chinese manufacturers face increasingly stiff competition in terms of cost, technology, and quality from peers in other Asian nations as well as companies in Europe and America looking to defend their local markets. Domestic Chinese demand alone may no longer drive global supply growth.
Financing large overseas manufacturing projects and supporting long-term operations across diverse regions and regulatory environments poses substantial business complexity and risks for Chinese companies accustomed to domestic conditions.
Critically, sustainable access to raw material supplies like polysilicon, silicon metals, and critical minerals remains uncertain given unpredictability in global trade, demand fluctuations, and dependence on geopolitically sensitive sources. Domestic resources cannot fully substitute imports.
Local content and employment requirements in target export markets pose compliance challenges to an industry accustomed to relying on low-cost Chinese labor. Adjusting to higher costs of production outside China takes time.
Persistent COVID outbreaks in China risk disrupting manufacturing and exports despite the transition towards distributed international manufacturing networks. Sustained lockdowns threaten supply security.
Rising costs of resources, labor, logistics, and environmental compliance both at home and abroad squeeze traditional thin margins in a maturing industry putting pressure on players. Consolidation is expected to continue.
To overcome hurdles, Chinese solar companies must strengthen cooperation with local partners, support the development of globally competitive technologies, cultivate diverse material sourcing partners worldwide, and sensitively navigate policy complexities around trade, investment, and energy transition in their target growth regions. Only through a truly diversified multinational presence offering differentiated value can Chinese involvement sustainably thrive in global solar value chains long-term.
In conclusion, despite facing mounting challenges, China's solar industry has proven remarkably adept at leveraging the country's industrial scale and engineering experience to transition from predominantly manufacturing and exporting to building a more globally distributed system of production, resource partnerships, and technology leadership over the past decade.