In February 2012, the Ministry of Industry and Information Technology released the "Twelfth Five-Year Development Plan for the Solar Photovoltaic Industry." This plan aimed to guide the industry through a period of rapid growth and structural adjustment. At that time, the polysilicon sector was experiencing significant regional concentration, with each area developing its own production base based on local advantages. However, the industry was in a critical phase of adjustment, facing challenges such as overcapacity and inefficient resource allocation.
To address these issues, national and local governments were urged to provide stronger guidance to polysilicon companies, optimize production layouts, and ensure long-term sustainable development. The existing entry standards for the polysilicon industry, introduced in 2010, had become outdated, and many regulations needed urgent revision. Authorities were advised to raise entry requirements and enforce strict project approval processes to eliminate outdated and excess production capacity at the source.
In March 2012, the U.S. Department of Commerce announced preliminary results of an anti-subsidy investigation into Chinese photovoltaic products. This "double anti" investigation marked a major setback for the Chinese PV industry. Over the previous two years, the sector had expanded rapidly, leading to severe overcapacity and declining profits. Companies faced internal management issues, high staff turnover, and limited long-term growth potential. The U.S. move was seen as part of a broader trade protectionist strategy, driven by domestic economic concerns and political pressures ahead of the 2012 election.
The U.S. government sought to shift public attention from domestic issues like high unemployment and economic stagnation by focusing on trade disputes with China. This approach not only hurt Chinese PV companies but also disrupted global supply chains. In response, China’s Ministry of Commerce initiated countermeasures against the U.S. investigations, emphasizing the need for strategic and balanced actions.
By July 2012, the Chinese Ministry of Commerce launched an anti-dumping investigation into U.S. polysilicon imports, while also considering responses to European Union actions. At the same time, the National Energy Administration issued the "Twelfth Five-Year Plan for the Development of Solar Power Generation," signaling a focus on domestic market expansion and grid integration.
Despite these efforts, many PV companies struggled with internal inefficiencies and external trade barriers. Some firms had expanded too quickly, leading to financial losses and operational challenges. The European Commission later launched an anti-dumping investigation against Chinese solar cells, further complicating the situation. Germany, in particular, faced pressure from domestic industries, which saw Chinese competition as a threat to their market share.
The EU's actions were viewed as a way to divert public attention from economic and social issues, including the ongoing debt crisis. Additionally, the EU sought to protect its own photovoltaic industry by limiting Chinese imports, a move that some analysts described as "crossing the river to remove the bridge."
In October 2012, the State Grid Corporation of China issued guidelines on distributed photovoltaic grid-connected services, aiming to support the growth of renewable energy. However, electricity pricing and grid connection policies remained key challenges, as high generation costs and inconsistent implementation hindered profitability.
By November 2012, China had responded to the EU's anti-dumping measures with its own trade actions, highlighting the growing tensions in Sino-European trade relations. Meanwhile, India also initiated an anti-dumping investigation against Chinese solar cells, reflecting a broader trend of trade protectionism.
Looking ahead, the future of China's PV industry depends on specialization, improved management, and more focused investment. Many companies had previously pursued broad diversification, leading to inefficiencies and financial strain. To remain competitive, the industry must prioritize core competencies, enhance technological innovation, and adapt to evolving market conditions.
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