China’s solar manufacturers eye Middle East as haven from US, EU trade barriers

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The region offers a promising alternative market, but perhaps only a temporary respite from tariff and overcapacity issues, analysts say

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A worker produces solar modules for export at a new energy enterprise in Lianyungang, in east China’s Jiangsu province, on June 24, 2024. Photo: CFOTO/Future Publishing via Getty Images

Yujie Xue

Published: 6:30am, 20 Aug 2024

Faced with US and EU trade barriers that aim to curb their dominance in the global solar equipment supply chain, Chinese manufacturers have been forced to reassess their overseas expansion strategies, with the Middle East emerging as a perceived safe haven.

Since last year, several Chinese solar giants have announced plans or expressed interest in building factories in Gulf countries including the United Arab Emirates (UAE) and Saudi Arabia.

Last month, Jinko Solar and TCL Zhonghuan, two of the world’s largest producers of solar modules and solar silicon wafers, announced joint ventures with Saudi Arabia’s Public Investment Fund involving factory investments of more than US$3 billion. GCL Technology, which makes solar panel materials, and panel producer Trina Solar have also announced Middle East plans.

“The Gulf region is becoming a global hotspot for renewable energy,” said Teng Da, the Middle East and North Africa director of Chinese solar equipment maker Longi Green Energy Technology. However, analysts said Chinese manufacturers looking to escape global trade barriers and overcapacity issues through Middle East expansion may find any respite to be short-lived.

GCL said in June that it will launch its first overseas granular silicon project in the UAE. Trina Solar last year announced it would build a photovoltaic manufacturing base in the UAE with an annual capacity of about 50,000 tons of high-purity silicon, 30 gigawatts (GW) of silicon wafers, and 5GW of battery modules.

Longi said in a report last month that it is also considering Middle East expansion.