China will pay export subsidies for solar products from April. Export subsidies for battery products will be abolished next year after a phased reduction this year.
According to Chinese economic media CheilJaekyung, China’s Ministry of Finance and the National Tax Service announced on the 9th that export tax refunds (subsidy) for 249 items, including solar panel products, will be suspended from April 1.
According to the authorities, the export tax refund for battery products will be reduced from the current 9 percent to 6 percent within this year and will be completely abolished on January 1, 2027. It will be applied to 22 items including lithium-ion battery products.
Export tax refund refers to the government’s refund of taxes such as VAT paid by companies in the production and distribution of export products. It has the effect of increasing price competitiveness by the government directly giving subsidies to companies.
Solar and battery products had been receiving 13% export subsidies by the end of 2024 before being cut to 9% for the first time last year.
The Chinese government’s export subsidies have been criticized by the United States and Europe for being the background of a huge trade surplus through unfair competition. The EU’s imposition of high tariffs on Chinese cars was also applied due to the issue of export subsidies. If China’s trade surplus of 1 trillion dollars is expected to surpass the trade surplus for the first time in history last year, international criticism of the subsidy policy has grown.
Criticism has also been raised in China that the subsidy policy leads to “degenerative competition” for export companies. As export performance is regarded as a performance indicator of local governments, companies and local governments produce as much as possible, which leads to low-cost competition in the market and worsening corporate competitiveness.
Operating profit of 31 companies belonging to major solar industry chains fell 16.9% year-on-year in the first three quarters of 2025, a total loss of 31.39 billion yuan, according to data from the China Solar Industry Association.
“Excessive trade surpluses do not help maintain China’s international relations, and China does not want to maintain such surpluses,” Yao Su-je, a professor at Chongqing University, told the Singapore Press Association Report.
However, the global share of Chinese solar and batteries is unlikely to be affected by the abolition of export subsidies. This is because these products have already dominated the global market. Goldman Sachs estimates that by 2024, China will supply 86% of the world’s solar modules and 80% of lithium batteries.
Authorities have also begun corrective action in the food delivery industry, which is considered another representative stage of regressive competition along with the solar export industry.
The secretariat of the Anti-Texclusive and Anti-Fair Competition Committee of the State Council said on the same day that it will launch an investigation into the competition in the food delivery platform market. The State Council authorities said that the competition over subsidies, prices and traffic control for delivery drivers and self-employed people has been remarkable, putting pressure on the real economy and intensifying “non-revolutionary competition” in the industry.
JENNIFER KIM
US ASIA JOURNAL
