Chinese solar companies are shifting the center of gravity of their export markets from advanced economies to emerging ones. As access to advanced markets has become more difficult due to the United States' high tariffs and measures blocking circumvention, they are targeting Southeast Asia and Africa as new growth pillars.
According to Reuters on the 20th (local time), as of last month China's exports of solar cells and modules increased year over year, led by Southeast Asia, South Asia, and Africa. By region, exports to Southeast Asia (including Vietnam, Thailand, and Malaysia) rose 33% to 125,402 tons (t) from the same month a year earlier. During the same period, exports to Africa increased 26% to 103,277 t, and South Asia (including India, Bangladesh, and Pakistan) rose 12% to 114,643 t.
By contrast, exports to Europe, the largest market, fell 18% year over year to 370,481 t. During the same period, the Middle East and Latin America decreased 38% and 20% to 96,224 t and 77,548 t, respectively.
China is considered the world's largest producer of solar cells and modules. But recently China's total exports of solar cells and modules have been declining. Last month China exported 980,000 t of solar cells and modules, down 9% from a year earlier. Over the same period, export volume by unit count fell 16.5% to 743.2 million units. Since the abolition on Apr. 1 of the value-added taxes (VAT) export rebate for solar products, China's exports of solar cells and modules have declined for two consecutive months.
In this context, Chinese companies are focusing on expanding their shares in emerging markets such as Southeast Asia, South Asia, and Africa, leveraging price competitiveness. Southeast Asia and South Asia are seeing growing power demand and are pursuing policies to expand renewable energy. In Africa, demand for Chinese solar products is also increasing as power infrastructure expands and solar projects grow.
In particular, the United States' moves to tighten regulations on Chinese solar appear to have influenced the export strategies of Chinese firms. The United States concluded that Chinese companies have been using production bases in Southeast Asia—Malaysia, Thailand, Vietnam, and Cambodia—to circumvent tariffs through transshipment, and imposed high anti-dumping and countervailing tariffs. More recently, it has also tightened regulations on Chinese solar supply chains.
Some analysts say the U.S. regulations are not dampening exports of China's solar industry, but rather accelerating export market diversification. With rising power demand and wider adoption of renewable energy boosting demand for Chinese solar products in emerging markets, Chinese firms are expected to increase the share of Southeast Asia, South Asia, and Africa over the United States and Europe, reshaping the global solar supply chain and market landscape.