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In 2012, the world was marked by a series of significant changes. From East Asia to the United States and Russia, leadership transitions were frequent. Meanwhile, the European debt crisis continued to create uncertainty, and the Middle East remained in turmoil. Economically, many regions experienced slowdowns, and deep-rooted systemic issues began to surface. In China, the business community was also facing its own set of challenges. The real estate sector was entering a downturn, while the photovoltaic industry was hit by a major crisis. At this time, the competition between nations was increasingly reflected in their enterprises, and the competition among enterprises was driven by their entrepreneurs. It was precisely this moment that tested entrepreneurial spirit. China Entrepreneur Network chose several key figures who had navigated the changes of 2012, hoping to capture a glimpse of China’s economic landscape through their experiences.
The platform selected 12 entrepreneurs and 12 topics to explore the development trends, business environments, and underlying macroeconomic factors shaping their respective industries, offering a comprehensive view of the evolving Chinese entrepreneurial scene. This issue was titled “Shi Zhengrong’s Industry Transformation,†and the content will be released daily—so stay tuned.
In 1992, Shi Zhengrong earned his Ph.D. in Solar Energy Science from the University of New South Wales in Australia. Twenty years later, reflecting on his career, he might have had a different perspective on his academic path. However, he was known as a scholar-entrepreneur, transitioning smoothly from a scientist to a business leader. This transition brought both opportunities and challenges to his identity as an entrepreneur. On August 15, 2012, Shi Zhengrong officially stepped down as CEO of Suntech Power, the company he founded. This move symbolized the struggles faced by Suntech, once one of China's wealthiest individuals. His difficulties in 2012 were not just personal but echoed the broader struggles of the entire photovoltaic industry, which was in dire need of reevaluation. Therefore, examining the photovoltaic industry through Shi Zhengrong's journey was both relevant and necessary.
Industry Changes
On August 15, 2012, Suntech Power announced that Dr. Shi Zhengrong would no longer serve as CEO but would instead take on roles as Executive Chairman and Chief Strategy Officer. The former CFO, Jin Wei, was appointed as the new CEO, while Ding Huai'an was named interim CFO. According to reports from *Shanghai Securities News*, Shi Zhengrong was facing multiple challenges, including industry-wide difficulties, overseas anti-dumping investigations, and financial pressures. Some believed he may have used this opportunity to step back from active management.
Whether or not Shi Zhengrong intended to withdraw, the photovoltaic industry was indeed experiencing its coldest winter. Over the past decade, no other industry had captured as much attention as photovoltaics. It matched the internet in terms of investment, wealth creation, and government enthusiasm. Companies like Suntech and Saiwei were the most iconic players in the industry, often referred to as the "PV Double." However, the industry now faced a painful reality: despite rapid growth, it was also burdened with overcapacity, trade disputes, and financial instability.
The photovoltaic sector in China was caught in a bittersweet situation. On one hand, China had become the world's largest producer of solar panels, with five of the top ten manufacturers based in the country. On the other hand, international trade barriers, particularly in Europe and the U.S., led to massive losses, pushing some giants toward insolvency. This was the result of long-standing contradictions during the industry's rapid expansion. While the government encouraged growth, the domestic market failed to provide clear support in terms of grid connection and pricing.
The unchecked expansion of production capacity eventually triggered a global backlash, becoming the final blow for Suntech. As Gao Jifan, CEO of Trina Solar, warned at the Davos Forum, if the EU imposed high tariffs, up to 60% of Chinese PV companies could go bankrupt. Miao Liansheng, another industry leader, echoed similar concerns, stating that the industry faced an even tougher winter ahead.
For Shi Zhengrong, the external challenges were nearly overwhelming. As a company founded by overseas returnees, his experience highlighted the risks of internationalization. The current crisis in the photovoltaic industry served as a costly lesson for Chinese businesses. Similar situations could soon emerge in other sectors as China becomes more integrated into the global economy. A single event abroad can now cause significant disruptions at home, making it crucial for policymakers and businesses alike to look beyond short-term gains and focus on long-term sustainability.
Shi Zhengrong’s Struggles
This wasn’t the first time Shi Zhengrong faced adversity. Since returning to China in 2001, he had encountered numerous obstacles. But this time felt different. He admitted to feeling overwhelmed by the scale of the problems: heavy debts, continuous losses, executives leaving, and ongoing legal battles in the U.S. and Europe. “Internal and external problems†best described Suntech’s situation. “I don’t know what I’ll do tomorrow,†he told *Chinese Entrepreneurs*.
Born with the surname Chen, Shi Zhengrong was adopted by the Shi family, who gave him great care and expectations. Even as a child, he was grateful for their support. After studying at the Chinese Academy of Sciences, he pursued a master’s degree in optics before going to Australia, where he earned his Ph.D. In 2001, he returned to China and founded Suntech in Wuxi, Jiangsu Province. With only $400,000 in initial capital, the company relied heavily on government support. The Wuxi municipal government facilitated investments from state-owned enterprises, helping Suntech grow rapidly.
By 2007, Suntech had grown from $200 million in sales to $1.348 billion, with profits jumping from $30 million to $1.7 billion. Shi Zhengrong became the richest man in mainland China, with a net worth of 16 billion yuan. His success was closely tied to Wuxi, where Suntech played a central role in the city’s industrial identity. Its influence extended beyond business, shaping local values and becoming a symbol of progress.
However, excessive government support also created complacency. Internal systems were not fully developed, and when the crisis hit, the pain was greater. As a private entrepreneur, Shi Zhengrong found himself entangled with local politics, making him vulnerable to external pressures.
Industrial Opportunities
Despite the challenges, there were signs of hope. In December 2012, the State Council visited Suntech, signaling the government’s renewed interest in the industry. During a survey in Jiangsu, officials emphasized the need for structural adjustments, technological innovation, and improved competitiveness. The meeting also stressed the importance of supporting leading companies like Suntech.
Later that month, the State Council proposed five measures to revitalize the photovoltaic industry, including reducing government intervention and improving subsidy mechanisms. While these steps were encouraging, the future of the industry remained uncertain. For Shi Zhengrong and Suntech, whether they could recover from the crisis still depended on how the situation evolved.
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