A first finding is that the economic importance of Chinese producers should not be overestimated. They are mostly active in downstream segments of the PV production chain ( cell production and module assembling ) where barriers to entry are low, competition is tough and profit margins are thin. Western companies continue to lead upstream markets ( in silicon purification, ingot and wafer manufacturing ) where technological skills are key assets.
This global division of labour between China and developed countries in this industry is observed in many industrial sectors. Note that China has ambitious plans of new production capacities in upstream segments, in particular silicon production, in the coming years.
China has acquired the technologies to produce cells and modules through two main channels:
1) the purchase of manufacturing equipment ( in particular turnkey production lines) on a
1) the purchase of manufacturing equipment ( in particular turnkey production lines) on a
competitive international market.
2) The recruitment of skilled Chinese entrepreneurs from the Chinese Diaspora who have managed to build pioneer PV firms, exploiting China’s comparative advantage of cheap labour and energy in PV cells and module segments.
2) The recruitment of skilled Chinese entrepreneurs from the Chinese Diaspora who have managed to build pioneer PV firms, exploiting China’s comparative advantage of cheap labour and energy in PV cells and module segments.
In contrast, the lack of competitive supply of production equipment appears to have been a significant barrier to the development of Chinese firms in the upstream silicon segment.
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