Wind power industry encountered "overcapacity" where to go?

Wind power, as a clean and renewable energy source, has attracted widespread attention and is being increasingly adopted around the world. The wind power equipment manufacturing industry has also experienced continuous growth, often seen as a promising sunrise industry with great potential for future development. However, despite this optimism, the domestic wind power manufacturing sector has struggled due to a lack of core technologies and independent innovation capabilities. This has left it in a vulnerable position, especially after the Chinese government removed the requirement in 2010 that wind power equipment must have a localization rate of over 70%. This policy change opened the market to global players, leading to intensified competition. According to customs data, from January to August this year, China’s total import and export of wind power generation equipment reached $292.032 million, marking a 27.8% decline compared to the same period last year. While exports fell slightly, imports saw a sharp increase—nearly 30% of imported wind power equipment amounted to $9.863 million, up by 6.8 times year-on-year. This trend highlights a growing imbalance in China's wind power trade, where exports are on the rise but imports remain high, creating a situation of both opportunity and challenge. One key factor driving this shift is strong policy support. Since 2004, China's wind power equipment trade has transformed from an import-dependent model to an export-oriented one. The National Development and Reform Commission introduced policies requiring 70% localization of wind power equipment to reduce costs and promote industrialization. As a result, the wind power sector experienced rapid growth, with annual installed capacity increasing by more than 50% and cumulative capacity rising from 1.6% to 26.7% globally. By 2010, however, the removal of the localization mandate led to increased imports and fiercer competition. Another notable trend is the diversification of exports, though imports remain concentrated. From January to August 2013, China exported wind power equipment to over 70 countries, with South Africa being the top destination, followed by the EU, Peru, and Australia. In contrast, most imports came from European countries, particularly Denmark, Germany, and Spain, which dominate the global wind power equipment market with advanced technology and production capabilities. Foreign-invested enterprises play a major role in both imports and exports. These companies accounted for 65.2% of total wind power equipment trade, while private and state-owned enterprises held smaller shares. On the import side, foreign firms dominated, accounting for 98.6% of the total, indicating a heavy reliance on international suppliers. General trade remains the primary mode of import and export. It accounted for 59.4% of total trade volume, with feed processing trade following at 33.9%. Imports were almost entirely conducted through general trade, highlighting the dominance of this method in the sector. In conclusion, the differences in China's wind power equipment trade reflect the current state of its domestic and global manufacturing industries. While policy support helped the sector grow rapidly, challenges such as overcapacity, limited domestic demand, and slow technological advancement have created difficulties. To address these issues, China must focus on structural adjustments, enhance innovation, and build strong domestic brands. By doing so, the industry can move toward sustainable and balanced development.

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