Chinese officials have held early discussions with suppliers of solar panel manufacturing equipment about potentially restricting exports of advanced technology to the United States.
According to an exclusive Reuters report, the discussions remain at a preliminary stage, and no policy has been finalised.
The talks have also not progressed to the point of seeking formal industry feedback, noting that companies are already dealing with severe overcapacity after years of rapid expansion.
China produces more than 80% of the world’s solar panel components.
It is also home to the top 10 suppliers of equipment used in solar cell manufacturing.
Any move to limit exports could have global implications.
China’s commerce ministry and the State Council did not respond to a requests for comment.
Potential impact on US expansion plans
If implemented, the proposed restrictions could affect plans by US firms to expand domestic solar production.
Companies such as Teslaare looking to build new factories or scale up existing ones.
The move would also extend China’s export controls into another key technology sector.
It follows earlier steps by Beijing to restrict rare earth exports.
The United States and China are increasingly competing in advanced technologies.
This includes solar-powered infrastructure and space-based computing systems.
Solar race tied to AI and energy demand
The rivalry extends beyond traditional solar manufacturing.
Tesla CEO Elon Musk has focused on solar-powered space-based computing.
Other US tech giants, including Google and Amazon, are investing in solar and energy storage systems.
These investments are aimed at meeting the rising energy needs of artificial intelligence.
Analysts tracking China’s solar industry expect export controls.
Concerns are growing over US efforts to build domestic solar capacity and reduce reliance on Chinese suppliers.
Industry concerns amid downturn
Chinese solar firms are already under pressure due to overcapacity.
Xu Xiaohua, chairman of Anhui Huasun Energy, highlighted the risks.
“Sometimes we’re finding that a key tea supplier is just not able to provide the volumes that they did the previous year,” Xu said, as quoted in a Reuters report.
He also urged Chinese companies to maintain their technological lead.
Tesla’s supply chain under scrutiny
Reuters previously reported that Tesla is seeking to purchase $2.9 billion worth of solar manufacturing equipment from Chinese suppliers, including Suzhou Maxwell Technologies.
The discussions focused on possible restrictions on shipments of advanced equipment to the United States.
This includes technology used to produce high-efficiency solar panels, known as heterojunction technology.
Research firm Trivium China warned of risks if US firms achieve solar independence.
“Tesla succeeding in its solar self-sufficiency push could prove a nightmare for China’s world-leading solar manufacturers,” the firm said in a note.
Uncertainty over scope and timing
Key details of any potential export controls remain unclear.
China had earlier considered licensing requirements for exports of related technologies, including batteries for energy storage systems. Implementation was delayed until later this year.
Meanwhile, some Chinese firms continue to negotiate and supply solar equipment to US buyers.
The issue is expected to feature in upcoming discussions between Chinese President Xi Jinping and former US President Donald Trump, with both sides seeking stable trade relations.
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