China restricts solar manufacturing equipment exports to the US
Five people familiar with the discussions said that Chinese officials had held preliminary talks with suppliers of equipment used to manufacture solar panels in order to 'limit exports of advanced technology to the United States.
A clampdown of this kind would put at risk the investments of U.S. firms and slow down the race to space-based computing. China, which is estimated to produce more than 80% the solar panel components in the world, also has the top 10 suppliers for equipment used to manufacture solar cells.
Two sources stated that no rule had been finalised and the discussions were not at the stage where formal feedback was being sought from an industry struggling with severe overcapacity following years of aggressive growth.
China's Commerce Ministry and State Council, or Cabinet, did not respond immediately to faxed comments from.
If adopted, this step could threaten the plans of U.S. firms to expand
This move, if adopted, could undermine plans by U.S. companies, like Tesla, to expand or build new factories in an effort to boost local production.
The move would also expand export controls to another area of technology in which China is a leader, and build on Beijing's decision to restrict rare earth exports last year in response to U.S. duties.
Elon Musk, Tesla's CEO, has been focusing on the production of space-based computers powered by solar panels.
Google and Amazon, two other U.S. tech giants, are also investing in solar energy and storage systems on the ground. They're also planning to build similar orbital data centers to meet AI's increasing demand for power.
Analysts and executives who follow China's solar industry are preparing for export controls. This is partly because of growing concern over Musk and other efforts to increase solar panel production in the United States and reduce reliance on China.
Requests for comments from the U.S. Department of Commerce and U.S. Department of Trade were not immediately responded to.
A DOWNturn could see the industry lose out to U.S. companies
Musk is trying to take advantage of the 'China solar downturn' to buy equipment and hire talent, Xu Xiaohua told Caijing Business Magazine this year.
He called on Chinese companies to increase their efforts in order to maintain their technological lead.
Huasun didn't immediately respond to a request for comment sent via email.
China's potential curb on imports comes as both sides prepare for a meeting of Donald Trump and Xi Jinping in the Chinese capital, next month. Both sides see this as an opportunity to maintain more stable ties with respect to trade.
Last month, it was reported that Tesla wanted to purchase $2.9 billion worth of equipment from Chinese suppliers like Suzhou Maxwell Technologies. The company was seeking approval for exports from the Commerce Ministry.
Musk said that solar power can provide all of the United States' electricity needs. Tesla also pushed the goal of manufacturing 100 gigawatts on American soil by 2028.
TESLA'S SELF SUFFICIENCY PUSH: A 'NIGHTMARE PROSPECT'
In a recent note, Trivium China, a research firm that focuses on Chinese government policies, stated: "Tesla's success in its solar self sufficiency push could prove to be a nightmare for China’s world-leading manufacturers of solar panels."
It added that not only would they be losing a major customer, they might also face a new, formidable competitor, at a time where they are already facing enormous financial pressure.
Beijing won't stand idly by as its industrial champions unwittingly aide the industrial policies of rival nations.
Three sources, who requested anonymity due to the confidential nature of the discussions with regulators, stated that Tesla officials visited Suzhou Maxwell Technologies after a report on the company's conversations with Chinese suppliers.
Two sources reported that regulators were in talks with Suzhou Maxwell Technology about possible restrictions on shipments to the United States. This included high-end equipment required to produce panels of higher efficiency, known as HJT.
Suzhou Maxwell, and Tesla did not respond immediately to emails requesting comment.
SOME ASPECTS YET TO EMERGE
It was not possible to determine the extent of any restrictions on other export markets or when licensing requirements could be implemented.
China threatened to impose licensing requirements on exports in 2025 for a similar technology, high-end battery?and materials required for energy storage systems for large-scale solar project, but the implementation was halted until November of this year.
Two people confirmed that other Chinese solar manufacturers have continued to negotiate with the United States and ship solar manufacturing equipment, including those firms that are bidding on the Tesla order.
HJT, or heterojunction technology, boosts the power output of solar cells by using a wafer made of crystalline silica sandwiched in between two very thin layers. This allows more electrons from sunlight to be captured and converted into electricity. Reporting by China Newsroom; Norihiko Shrouzu and Nichola Groom from Los Angeles, Texas, and Clarence Fernandez, Nick Zieminski, edited by Clarence Fernandez.
(source: Reuters)
