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

“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.

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.

Meanwhile, the government will promote industrial upgrades, such as by finding ways to better utilise lithium batteries to store energy collected from solar panels, which in turn would help address electric-grid volatility issues that stem from photovoltaic power generation.

“Through these measures, we can continue to expand the market space for these new-energy capacities, and further promote the continuous expansion of product varieties and expand the application market of new energy,” Wang said.

Authorities will also work with industry associations to strengthen the monitoring of industrial operations and regularly release key information on production capacity and output to alleviate market disorder, he added.

China will also deepen international cooperation in the realm of new energy to expand application scenarios, Wang said.

“Now the global demand for green power is increasing, and everyone hopes for more green power like photovoltaics … the future massive market demand has laid a foundation for large-scale development,” he said.

In 2023, solar panels made in China accounted for more than 80 per cent of global production. Seven of the world’s top 10 photovoltaic manufacturers were from China.

The country also made 75 per cent and 60 per cent of the world’s lithium batteries and electric vehicles last year, respectively.

Such dominance has increasingly sparked wariness from the United States and the European Union, which has accused China of strangling their own manufacturing sectors via overcapacity in its new-energy industries.

Last month, the US announced sharp tariff hikes on an array of Chinese new-energy imports, including a 100 per cent duty on EVs - even though the US imports very few Chinese EVs.

Beijing argues that the foundation of international trade is the comparative advantage of each country, and that from a global perspective, there is actually a shortage of capacity in the new-energy sector. Thus, it contends, China has helped alleviate the global inflation pressure and made massive contributions to the world’s green transition.

“The view that massive exports equal overcapacity is completely untenable,” Ding Weishun, deputy director of policy research for the Ministry of Commerce, said during Wednesday’s press conference.

“We believe that relevant countries, such as the United States and [those in the] Europe Union, cannot hold high the banner of addressing climate change and demand that China shoulder the bulk of the responsibility for addressing climate change, and at the same time wield the stick of protectionism to hinder the free trade of China’s green products,” Ding said.