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Polysilicon industry needs to support and strengthen the survival of the fittest
China has made significant progress in the five-year development of its polysilicon industry, from raw material sourcing to importation, enabling more than half of the photovoltaic industry's supply chain to become self-reliant. However, despite this achievement, the sector is now facing a severe survival crisis, with over 90% of enterprises having halted production. Zhu Gongshan, chairman of the China Photovoltaic Industry Alliance and a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), emphasized that the current industrial policy should focus on supporting and strengthening domestic capabilities while regulating both international and domestic market competition.
According to recent reports, technological advancements and market integration have led to a significant reduction in energy consumption within the polysilicon industry, and by-products are now being fully recycled. Additionally, the State Council’s executive meeting at the end of last year highlighted the photovoltaic industry as a key strategic emerging sector, signaling strong government support for its long-term development.
Zhu pointed out that currently, about half of the polysilicon raw materials used in China are still imported, while domestic producers are burdened with a large amount of low-end capacity. He stressed that the industry must embrace the principle of "survival of the fittest" and undergo necessary restructuring. In the early stages of growth, China's polysilicon sector has struggled with intense price competition from foreign firms, leading to a critical situation where 90% of companies have ceased operations. If this trend continues, the entire industry could face annihilation.
To address these challenges, Zhu proposed accelerating the resolution of anti-dumping and anti-subsidy cases involving imported polysilicon, cracking down on unfair trade practices such as low-cost dumping. He also suggested that the import of polysilicon be classified under the prohibited category of processing trade, shifting it back to general trade supervision to prevent tax evasion and other illegal activities.
Furthermore, Zhu recommended restoring the export tax rebate rate for polysilicon and silicon wafers to 17%. He explained that Chinese polysilicon companies have achieved technical maturity and cost control, but current tax policies have weakened their international competitiveness. By allowing these products to benefit from the same export tax rebates as high-tech goods, China can significantly enhance the global competitiveness of its photovoltaic industry.
With the right policy measures in place, the polysilicon sector has the potential to not only survive but thrive, playing a crucial role in China's renewable energy strategy and global clean energy transition.