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Trailing the Market or Governing It? Two Decades of Industrial Policy for China's Solar Sector

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  • Nahm, Jonas

Abstract

There is probably no other advanced industrial sector in which China plays a greater role in global supply chains than in the solar industry. From the production of basic material inputs to the assembly of solar modules, Chinese firms dominate virtually every segment of global solar photovoltaic (PV) supply chains. This paper reviews the role of industrial policy in shaping China’s current position in current solar supply chains. The author argues that China’s solar industry started as an export-oriented sector driven primarily by subnational government investments in manufacturing capacity. While the Chinese central government enabled the role of subnational actors to some degree, the center responded to subnational government actions more than it guided them. While the central government has taken a more active role in shaping domestic markets since its first intervention in the solar industry in 2009, it has continued to primarily address unintended consequences caused by misaligned incentives for subnational actors.

Suggested Citation

  • Nahm, Jonas, 2023. "Trailing the Market or Governing It? Two Decades of Industrial Policy for China's Solar Sector," Institute on Global Conflict and Cooperation, Working Paper Series qt0f34s7b6, Institute on Global Conflict and Cooperation, University of California.
    • Handle: RePEc:cdl:globco:qt0f34s7b6
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