28 C
Guwahati
Wednesday, July 24, 2024

China’s Solar Dominance

China, having established its dominance in the global solar supply chain, is now poised to extend its firm grip on the global wind manufacturing market. This new opportunity has presented itself to Beijing thanks to recent developments arising from a new law introduced by the United States as part of its plan to combat inflation. As wind sector spending is projected to increase by a substantial $70 billion in 2023, China is strategically positioning itself to capture a larger share of the offshore wind sector.

- Advertisement -
- Advertisement -

China, having established its dominance in the global solar supply chain, is now poised to extend its firm grip on the global wind manufacturing market. This new opportunity has presented itself to Beijing thanks to recent developments arising from a new law introduced by the United States as part of its plan to combat inflation. As wind sector spending is projected to increase by a substantial $70 billion in 2023, China is strategically positioning itself to capture a larger share of the offshore wind sector. Meanwhile, companies in the US, another key player in the wind industry, are facing challenges in competing on the global stage. The potential removal of tax incentives under the US Inflation Reduction Act has created hurdles for American companies seeking global competitiveness. The US law was expected to enhance the supply chain capacity, stimulate domestic demand for renewable energy, and facilitate the expansion of low-carbon manufacturing within the country. It aimed to reduce costs for US solar PV projects and foster the growth of battery cell production. However, the ongoing US debt ceiling negotiations have drastically altered the landscape.

Aside from the complexities surrounding permitting reforms, the undermining of the Act’s incentives for the low-carbon supply chain through the debt ceiling negotiations could have significant implications for the global competitiveness of US manufacturing. In contrast, China, driven by the desire to revitalize struggling activity levels, remains eager to secure international orders and stands to benefit from the shifting dynamics. The global opportunity for low-carbon manufacturing is both substantial and rapidly expanding. The current state of US manufacturing is disheartening, with activity reaching almost its lowest inflation-adjusted level in the past two decades. Only the aftermath of the 2008 financial crisis and the pandemic-impacted year of 2020 saw comparably low levels of manufacturing activity. Although new orders for manufacturers have reached an all-time high in absolute terms, this is primarily due to prolonged inflation rather than a thriving industry. In the first quarter of this year, new orders were nearly one-third below the average recorded between 2010 and 2014. While absolute new order values in the first quarter of this year exceeded $1.7 billion per month, marking the highest since Q2 2015, the adjusted values, accounting for inflation, fell below the first quarter of 2020, before the pandemic took hold.

- Advertisement -

Technological advancements have provided some relief, yet rising labour costs have offset their benefits. Furthermore, the strength or weakness of the US dollar relative to other currencies significantly influences US manufacturing activity. As the US dollar strengthens, manufacturing outside the country becomes more cost-competitive. The weak US dollar between 2002 and 2007 played a pivotal role in driving domestic manufacturing. Conversely, the strong dollar in recent years has put US manufacturing at a significant cost disadvantage against international orders. Considering the current state of the US manufacturing industry, the potential repeal of incentives under the Inflation Reduction Act would be another setback for domestic manufacturing, causing the sector to miss out on the rising global demand for low-carbon products. China, with its preeminent position in the solar energy manufacturing market, stands as the clear winner in this scenario, ready to further strengthen its position in the global wind manufacturing sector.

 

- Advertisement -
The Hills Times
The Hills Timeshttps://www.thehillstimes.in/
Welcome to The Hills Times, your trusted source for daily news and updates in English from the heart of Assam, India. Since our establishment in 2000, we've been dedicated to providing timely and accurate information to our readers in Diphu and Guwahati. As the first English newspaper in the then undemarcated Karbi Anglong district, we've forged a strong connection with diverse communities and age groups, earning a reputation for being a reliable source of news and insights. In addition to our print edition, we keep pace with the digital age through our website, https://thehillstimes.in, where we diligently update our readers with the latest happenings day by day. Whether it's local events, regional developments, or global news, The Hills Times strives to keep you informed with dedication and integrity. Join us in staying ahead of the curve and exploring the world through our lens.
Latest news
- Advertisement -
Related news
- Advertisement -