China’s relentless pursuit to become self-dependent on sophisticated industries, such as solar panel systems, have left foreign competitors and even smaller-scale Chinese businesses in the dust, an article by Today Online reported.
“A small vibration back in China can cause an avalanche in prices around the world,” said Frank Haugwitz, a solar industry consultant based in Beijing, in an interview with Today Online.
It started in the late summer of 2016, when the Chinese government started to decrease subsidies they distributed to domestic solar-panel buyers. One of those affected was former organic fruit retailer Gao Song, who turned to the business of installing solar panels.
Upon the slashing of subsidies, Gao was forced to lay off half of his workers.
“I have been working hard and was just off to a good start,” Gao said. “Now I have to start over.”
To cope up with the government’s move, solar panel manufacturers in China cut their prices, which resulted in the decrease of global prices. Chinese makers weren’t the only ones hit hard. Companies in Germany and the United States also had to cut jobs.
“Within just a few months, it all came crashing down,” Russell Abney, a former equipment engineer in Perrysburg, Ohio. He found himself jobless along with 450 other employees.
“It’s like a death in the family. People feel awkward about it,” Abney, who graduated from Georgia Tech, added.
U.S. President Donald Trump has already promised to put an end to China’s “unfair business practices,” but numerous economists and industry insiders are pessimistic Trump’s promises will do any good.
China controls the global solar systems market. It produces two-thirds of the solar panels in the world, and also buys 50 percent of the new solar panels around the globe. For experts, it won’t be long until China completely dominates the market as the world’s largest maker and buyer of solar panels.
“[Chinese panel makers] have the capital, they have the technology, they have the scale,” Ocean Yuan, chief executive of Oregon-based Grape Solar, a distributor of solar panels. “[China] will crush [American rivals].”