How do local policies and trade barriers reshape the export of Chinese photovoltaic products?

Abstract

The past two decades have witnessed the dramatic growth of the photovoltaic (PV) industry in China. This study examines the impact of both internal and external forces on China’s solar PV export during 2007–2016. The results show that the spatial pattern of PV exports is quite different before and after 2011, with export increasingly concentrated in the Yangtze River Delta. The statistical analysis finds that, despite the crucial role of industrial relatedness, the export of PV products has deviated from historical trajectory of regional product structure with the impact of external forces. Policy incentives are essential in stimulating PV exports by compensating for the shortage of industrial bases in the central and western regions. Trade protectionism has depressed China’s PV exports. The eastern region has a better performance in alleviating loss since it has strong industrial bases and can bear trade shock by quickly switching PV production to related sectors. This study suggests the importance of external forces from both domestic and abroad in shaping the development of export-oriented industries in China.