China vows new-energy regulations to optimise industry, while still refuting ‘overcapacity’

Beijing will help guide green sector that has come under increasing fire from the West, and the threshold for market entry will be raised with higher standards.

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Solar panels are seen on rooftops of Chinese enterprises in Anqing, Anhui province, last month. Photo: Getty Images

Published: 5:32pm, 13 Jun 2024

As China’s new-energy sector faces mounting trade barriers in the global market, officials in the country have pledged to optimise its massive capacity while continuing to refute the industrial-overcapacity concerns that have been voiced by Western politicians and Beijing itself.

“Whether from the perspective of a comparative advantage or global market demand, I don’t think there is an overcapacity problem that everyone is concerned about,” said Wang Shijiang, deputy director of the Electronic Information Department of the Ministry of Industry and Information Technology, during a press conference on Wednesday.

And in terms of some inefficient or backward production capacity that currently exists in the country’s green sector - that will gradually be weeded out through market competition, said Wang, who was secretary-general of the China Photovoltaic Industry Association from 2021 to February this year.

“In fact, China’s new-energy-manufacturing industry is basically dominated by private enterprises, and these firms will make decisions accordingly and quickly based on market development and changes,” Wang said.

At China’s annual tone-setting central economic work conference in December, Beijing flagged “overcapacity in some industries” as one of the major economic challenges to tackle this year. But in recent months, authorities have increasingly pushed back against the West’s “sheer protectionism” and “hyping up” of overcapacity claims.

Moving forward, Wang said, the government will offer guidance to the new-energy industry by amending regulations on product quality, technology and environmental protection, thus raising the threshold for market entry.