Wu Bofan: Chinese PV companies should not forget the painful price

In 2012, the Chinese photovoltaic (PV) industry faced one of its most challenging periods. The top ten PV companies were burdened with a total debt of 111.3 billion yuan, and the entire sector stood on the brink of collapse. Among these, Suntech, once considered the leading name in China’s solar industry and a symbol of Wuxi’s industrial strength, fell into deep trouble due to both domestic and international challenges. Its downfall sparked widespread discussion about the lessons learned from its failure. Upon closer examination, however, the reasons behind Suntech’s collapse appeared surprisingly basic and avoidable. These were not complex strategic errors but rather common-sense mistakes that could have been easily recognized by anyone familiar with the industry. What was even more disappointing was that these mistakes were made by highly intelligent individuals, not by the company’s leadership alone. Many other large Chinese PV companies, such as L.V. and Tianhe Solar, were facing similar issues, indicating a systemic problem within the sector. History has shown that major business failures often stem from seemingly simple decisions or execution errors. It is not always the lack of intelligence that leads to disaster—it’s often the overconfidence in one's own judgment that causes people to overlook obvious risks. Common sense is not a guarantee of success, yet it is frequently dismissed by those who believe they are too smart to need it. In the case of the PV industry, common sense would have warned that this was a high-risk sector—dependent on foreign markets, technologies, and raw materials. The photovoltaic industry, in reality, functions like a three-headed beast: it relies on external markets, core technologies, and key equipment. Even the raw materials needed for production are largely imported. This dependency makes it difficult for Chinese companies to control costs or pricing. Without independent technological capabilities, the industry remains little more than a manufacturing hub, despite being labeled as a high-tech and strategic emerging industry by some local governments and financial institutions. The low entry barriers allowed a flood of PV companies to emerge across the country, resulting in excessive competition and inevitable price wars. While Chinese firms can leverage low-cost local materials in traditional manufacturing, the PV industry lacks such advantages when it comes to critical components. As product prices dropped, profit margins shrank, and many companies found themselves operating at a loss. Moreover, the market for PV products lacked strong domestic demand. At the early stage of China’s PV development, 99% of its products were exported to Europe. This left Chinese companies at a disadvantage, as European buyers held the upper hand in negotiations and dictated pricing. From the beginning, the industry was in a vulnerable position, though this weakness wasn’t immediately apparent. As more companies entered the market, especially Suntech, they expanded their production capacity rapidly in pursuit of scale. However, this expansion led to oversupply, and buyers responded with significant price cuts. The result was a cycle of declining revenues and increasing losses. These outcomes were not unpredictable—they were foreseeable with basic business knowledge. Yet, the lure of rapid growth blinded many companies, causing them to ignore the fundamental rules of the market. In the end, the painful consequences were a direct result of forgetting the simplest truths. The PV industry’s struggles serve as a powerful reminder that even in high-tech sectors, common sense should never be underestimated.

Grinding Heads

Grinding head is a kind of small handle grinding tools, used in electric mills, hanging mills, hand electric drills. There are many kinds of diamond grinding head, ceramic grinding head, rubber grinding head, diamond grinding head, emery cloth grinding head.

Ceramic grinding head: grain size sand (generally brown corundum, white corundum, chrome corundum, silicon carbide) sintered by ceramic binder, with a metal handle in the center. Mainly grinding all kinds of metal, for grinding the inner wall of aperture, mold correction. Rubber grinding head: fine sand is synthesized by rubber binder for the polishing of mould

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