National People's Congress Representative and Longi Green Energy Chairman Zhong Baosheng: Uphold high standards to lead and break the "involution" competition in the photovoltaic industry

National People’s Congress Deputy and Longi Green Energy Chairman Zhong Baosheng

Reporter Liu Canbang from Securities Times

This year’s National Two Sessions, NPC Deputy and Longi Green Energy Chairman and General Manager Zhong Baosheng proposed suggestions on the topic of “countering involution.”

Zhong Baosheng believes that currently, China’s photovoltaic industry is developing rapidly, but it also faces severe challenges of “involution” competition. Specifically, the supply and demand structure in the photovoltaic sector has not been fundamentally resolved, and industry development is under downward pressure; at the same time, capacity imbalance leads to “involution” price competition, severely restricting high-quality innovation; additionally, overseas photovoltaic capacity is growing rapidly, impacting China’s photovoltaic industry’s international competitiveness.

Zhong Baosheng suggests that we should adhere to high standards to lead and break the cycle of “involution” competition in the photovoltaic industry. First, based on the different characteristics of each link in the industry chain, use technological quality standards as a key to classify and implement measures, regulate competition order; establish technical grading and dynamic management mechanisms, improve and dynamically adjust reasonable market access standards to support advanced capacity development, encourage technological iteration and upgrading, accelerate the elimination of outdated capacity, and maintain supply-demand balance.

Second, strengthen safety standards for photovoltaic module products to safeguard customer interests and safety of life and property. It is recommended to raise national mandatory safety standards for modules to effectively prevent fire risks in photovoltaic power stations. Further improve reliability standards for photovoltaic modules, enhance the ability of photovoltaic power stations to withstand extreme weather, and effectively protect users’ legal rights and station assets.

Third, set mandatory standards for module sales, fully integrate product technical quality standards into procurement evaluation systems, and promote a market-oriented approach of high quality and good price. At the same time, establish constraints on grid connection access, clarify the minimum efficiency for grid connection, and use strict constraints at the terminal stage to push the industry toward high efficiency and high reliability transformation and upgrading.

Fourth, establish a sustainability rating standard for photovoltaic enterprise operations to prevent financial risks. Zhong Baosheng suggests that key financial indicators such as debt-to-asset ratio, net debt ratio, and short-term debt repayment ability after deducting prepayments should be monitored, and enterprises that do not meet standards should face financing restrictions. Meanwhile, encourage industry mergers and acquisitions to improve industry concentration.

Zhong Baosheng states that emerging industries like photovoltaics are developing rapidly, but “involution” issues are prominent. The core problem lies in weak protection of talent and intellectual property rights, with frequent malicious poaching of core talents, infringement of technical secrets and patents, coupled with imperfect protection systems and difficulties in rights enforcement. These issues not only dampen corporate innovation vitality but also damage the industry ecosystem.

In response, Zhong Baosheng proposes two suggestions: one is to strengthen protection of talent and trade secrets, and crack down on malicious poaching behaviors. To build a solid defense for trade secret protection and curb malicious poaching, efforts should be coordinated across improving legal systems, strengthening judicial support, optimizing judicial standards, and implementing targeted protection for key enterprises. The other is to improve the intellectual property protection system and increase efforts in rights enforcement and supervision.