It has been a tumultuous couple of months for Alex Xu’s company – a solar panel manufacturer based in eastern China’s Zhejiang province – as product prices have surged by about 20 per cent.
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Long plagued by severe oversupply, China’s photovoltaic industry is grappling with cutthroat price wars and even loss-making sales. From Xu’s perspective, nearly half of the industry’s capacity is excessive.
But a rebound in prices has followed recent calls from Chinese authorities to combat “involution”, or neijuan – a buzzword referring to destructive competition that is often characterised by the aggressive slashing of prices – across various economic sectors.
The amendment to the pricing law, drafted by the National Development and Reform Commission and the State Administration for Market Regulation, is open for public feedback until Saturday. This marks the law’s first revision since its enactment in 1998 and has drawn widespread attention for targeting involution-style competition.
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“Due to the nature of photovoltaic products, which lack significant differentiation in appearance and are highly homogenised, many customers focus solely on price rather than product details,” Xu said. “This has led to pure price competition, resulting in substantial industry losses.”
As his firm’s deputy general manager, Xu supports tightening regulations on pricing.
