In a rare coordinated action for survival amid fierce competition, 33 Chinese companies covering 90 percent of China's photovoltaic manufacturing output across all segments have signed a self-discipline convention agreeing to voluntary production control.
The firms inked the agreement during a symposium themed Preventing Cutthroat Malicious Competition at the 2024 Annual Conference of the PV Industry held from Dec. 4 to 6 in Yibin, Sichuan province, according to the China PV Industry Association. The deal marks an unprecedented collaborative effort within this competitive sector in China.
The latest meeting was part of a series of self-discipline sessions held within China's PV sector since October. Regarding the new production limitation agreement, the capital market focuses on details such as future quota allocation and supervision implementation, with subsequent regulatory measures and ultimate goals to determine the certainty and extent of profit gains.
Various rumors are circulating regarding the specific self-discipline rules, but none reflect the official stance of the PV Industry Association or relevant authorities, several insiders told Yicai. However, there is a consensus in the sector to steer away from irrational competition via production cuts and output limitations, they added.
"Do not assume that your firm will survive while others will definitely fail," Cao Renxian, chairman of Sungrow, said while appealing to peers not to overestimate themselves and to consider more challenges and scenarios that might curb investment impulses.
"Chinese companies seem to find it difficult to form alliances, unlike Middle Eastern oil-producing countries that took part in establishing the Organization of the Petroleum Exporting Countries," Qian Jing, vice president of solar modules giant Jinko Solar, said at the meeting. Firms must have self-discipline rather than rely on external regulation, she noted.
"We shouldn't be afraid of malicious competition, as some interventions may not necessarily be beneficial," an executive from a PV company said to Yicai. However, an alliance within the industry could lead to useful suggestions and norms because of its deep understanding of demand and internal rules, the person added.
（Picture: Veer）
