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A senior executive at one of China’s biggest solar equipment groups has called on western governments to “let the best technology win”, as Chinese companies and officials hit back against rising protectionism in the US and Europe.
Zhou Shijun, who leads global marketing for Arctech, a manufacturer of mounting systems for large-scale solar installations, said countries risked slowing their response to climate change by introducing trade barriers on Chinese products.
In an interview with the Financial Times, Zhou said that enforcing protectionist measures rather than prioritising the best technology would “come back to haunt” the development of the renewable energy industry.
Speaking at Arctech’s headquarters in Kunshan, an industrial city west of Shanghai, Zhou said the onset of trade barriers was unfairly hitting manufacturers of more advanced technologies that did not have excess output.
Zhou argued that most companies in the solar industry with overcapacity problems were producing cheaper, lower-end technologies. The dynamic is similar to the auto industry, where producers of cars with internal combustion engines have more excess capacity than those making electric vehicles.
“We do have concerns that geopolitical tensions are affecting our global business. What we’re doing right now is diversifying,” he said.
Zhou added that while China would “always” be its biggest market, the company was targeting growth in the Middle East, Asia and Latin America and had no plans to enter the US.
Shanghai-listed Arctech, which has a market capitalisation of $1.9bn, reported annual revenues of $886mn in 2023. Arctech’s tracking systems support large-scale solar power plants by rotating panels throughout the day for greater exposure to the sun.
China accounts for more than 80 per cent of solar manufacturing globally, the result of years of state investment, intense local competition and rapid growth in domestic demand for green technologies over recent years.
Despite forecasts of robust long-term demand in the sector, parts of the solar manufacturing industry in China have been turning to exports to sell excess supply. This has caused prices to collapse and sparked complaints from the US and Europe over Beijing’s industrial policy and trade practices.
On Tuesday, US President Joe Biden sharply increased tariffs on Chinese imports, including electric vehicles and solar cells. Two days later, he announced plans to end an exemption from Trump-era tariffs on a type of solar panel unit often used in large projects.
The EU has, over the past nine months, launched investigations into China’s electric vehicle, solar and wind industries. European officials have also published a report on state-induced distortions in the Chinese economy.
Zhou said that as Arctech tried to increase market share outside China, it was trying to balance local requirements and technology sharing demands from overseas partners without giving up intellectual property.
Despite concern about rising geopolitical tension, Arctech believed the global uptake of large-scale renewable energy was “irreversible and inevitable” and expected the world to follow China in developing larger solar installations, Zhou said.
The company has three factories manufacturing its tracking systems in China and is joining a rising number of leading Chinese clean-technology companies, including electric vehicle maker BYD and battery producer CATL, in hunting for new manufacturing bases closer to foreign markets.
Arctech already has a factory in India, a partnership with the Adani conglomerate, and is building a new factory in Saudi Arabia. In Spain, the company has a research and development facility and is planning to build another factory in Brazil.