(Bloomberg) --
Chinese solar exporters pledged to stop undercutting each other’s prices in overseas markets and engage instead in “healthy competition”, as the sector languishes on a supply glut and price war.
Some 22 companies, including major players like Trina Solar Co., LONGi Green Energy Technology Co. and Tongwei Co., said they would form a committee to put an end to unfair competition and maintain an orderly flow of exports, according to a statement from China Chamber of Commerce for Import and Export of Machinery and Electronic Products on Tuesday.
China’s world-leading solar industry is facing its most severe test in years, as rampant production leads to a flood of equipment in not just the domestic market but also in destinations like the EU, India, Pakistan and Brazil, risking protectionist measures. The overcapacity has created massive losses for some companies and forced others into layoffs or bankruptcy, while solar chiefs have called for cooperation among companies and action from authorities to help the industry and its image abroad.
Exporters are also facing an imminent reduction in a key export levy rebate, which had helped companies push more product overseas. The rebate for shipments of wafers, cells and modules will be cut from 13% to 9% from Dec. 1, according to the finance ministry.
“The new policy aims to encourage the export of high-value-added products from China and reduce the risk of anti-subsidy or anti-dumping investigations from foreign countries targeting China,” according to Daiwa analyst Dennis Ip. “While the short-term financial performance of solar module players may be negatively affected by the policy, we believe the long-term impact will be minimal.”
The so-called “self-discipline” committee first met on Nov. 22 to protect the interests of the solar industry rather than impose restrictive measures, it said in the statement, which did not provide further details.
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