Li Dongsheng: If Chinese photovoltaic companies do not actively expand globalization, opportunities may be robbed

Per reporter: Chen Pengli Per editor: Wei Guanhong

Starting from March 1, Daily Economic News & Tencent News jointly launched a series of columns entitled "Two Sessions and High Views", providing one-on-one in-depth conversations with the country's top bigwigs.

Since being elected as a deputy to the National People's Congress for the first time in 2003, this year is the 21st year that Li Dongsheng, founder and chairman of TCL, has served as a deputy to the National People's Congress. Every March, going to Beijing to participate in the National Two Sessions and convey the voices of grassroots front-line and enterprises is what Li Dongsheng has insisted on doing for the past 20 years.

On the last day of February this year, before attending the conference in Beijing, Li Dongsheng was interviewed by media including Daily Economic News in Shenzhen. He told reporters that this year he will bring four proposals, namely "Suggestions on Increasing Support for Technological Innovation and Capital Investment in Science and Technology Manufacturing", "Suggestions on Improving Cross-border Service Levels and Promoting the Globalization of Made in China", "Suggestions on Issuing as soon as possible" and "Suggestions on Completely Canceling Restrictions on Participation in Injury Insurance for Employees of Flexible Employees".

The reporter of "Daily Economic News" noted that this is the third consecutive year that Li Dongsheng has made suggestions on the globalization of China's manufacturing industry. In the process of interviewing, Li Dongsheng reiterated that Chinese enterprises must carry out an active global layout in order to maintain the comparative advantage of Chinese manufacturing in global competition.

For China's photovoltaic industry, he said that China's photovoltaic products account for more than 90% of global output, so the globalization of the photovoltaic industry is necessary and inevitable. The global photovoltaic market demand is growing very fast, and many overseas countries have proposed local development plans for the photovoltaic industry. In this context, if Chinese PV companies do not actively expand their global business, opportunities may be robbed by other countries.

Focus on the globalization of manufacturing for many years

In recent years, the "anti-globalization" trend has continued to ferment, and the traditional export model of China's manufacturing industry has been challenged by a series of challenges.

The rise of trade protectionism has made Chinese enterprises represented by TCL more determined in the pace of "globalization". By the two sessions in 2023, Li Dongsheng has put forward proposals related to the globalization of manufacturing for three consecutive years. This year, Li Dongsheng mentioned in his proposal that China's manufacturing must go global, shift from exporting products to exporting industrial capabilities, achieve localized operations, avoid trade barriers, and achieve greater value in the world with its own advantages.

He further pointed out that if Chinese enterprises want to further improve the level of globalization and avoid risks, they also need a series of support from the government level. Therefore, he suggested that embassies and consulates abroad provide legal assistance, policy consultation and other support to Chinese-funded enterprises in their host countries. It is recommended to set up a special fund for technology patent litigation to provide enterprise assistance for major patent litigation; It is recommended that the commercial sector organize enterprises to participate in cross-border bilateral and multilateral trade negotiations; It is recommended to provide financing facilities for cross-border investment by Chinese enterprises.

Li Dongsheng, deputy to the National People's Congress, founder and chairman of TCL, Image source: Courtesy of the enterprise

In an interview with the media including Daily Economic News, Li Dongsheng said that in recent years, the most prominent difficulty faced by the globalization of China's science and technology manufacturing industry is patent litigation. In many high-precision technology fields, China is a catch-up, and multinational enterprises have formed strong barriers to technology patents. As a result, Chinese enterprises often encounter unreasonable patent claims and demands in the process of "going global". For this point, the more Chinese multinational enterprises are ahead, the deeper they feel. When encountering patent lawsuits, the success or failure of Chinese enterprises' litigation often becomes an industry benchmark with far-reaching impact. Dealing with patent litigation is protracted and costly, so it is recommended that the government take the lead in establishing a special fund for patent litigation to help enterprises go global.

Li Dongsheng said it has become increasingly difficult for Chinese companies to continue simply selling products to overseas markets. For example, he said, the U.S. tariffs in the world's major manufactured goods markets were the lowest. However, after the United States unilaterally increases taxes on China, Chinese-made products exported to the US market will face an additional tariff of 7.5%.

Li Dongsheng believes that enterprises should adapt to changes in the external environment, seize opportunities and overcome difficulties. From TCL's own experience, the way to respond is to unswervingly improve the global industrial layout, promote the combination of supply chain globalization and overseas localized operations, and at the same time use leading technology to promote globalization and extend the competitive advantage to the high end of the industrial chain.

For example, the tariff on the export of color TVs and other products to the United States increased, and TCL made adjustments to produce products in Mexico and Southeast Asia, and then exported to the US market. According to him, at present, TCL has 43 R&D centers and 32 manufacturing bases around the world, and its business covers more than 160 countries and regions around the world, and TCL's TV sales have jumped to the second place in the world.

He also told reporters that the results of TCL's globalization are not only reflected in the increase in global market share and the growth of overseas revenue, but also the continuous growth of TCL's exports. In the past five years, TCL's overseas revenue has increased from 55.8 billion yuan to more than 106 billion yuan, and its export value has increased to 14.97 billion US dollars.

China's photovoltaic industry should seize the opportunity of globalization

According to Li Dongsheng, TCL has laid out three core industries in the world through the two main bodies of TCL Industry and TCL Technology: intelligent terminals, semiconductor display, and new energy photovoltaic, and these three core industries will continue to promote a higher level of globalization in the future.

At present, TCL intelligent terminals have established production bases in Vietnam, Poland, Mexico, Brazil and other countries and regions, "In the future, we will continue to improve the localization level of overseas production and operation." Li Dongsheng said. Secondly, in terms of semiconductor display, TCL Huaxing India factory has been officially put into operation, and TCL Huaxing will continue to strengthen its global layout in industry, marketing and research and development in the future.

In the field of new energy photovoltaics, TCL Central has laid out photovoltaic cell and module factories in Malaysia, the Philippines, Mexico and other places through its joint venture Maxeon. Li Dongsheng said that TCL Central will also explore the possibility of developing the photovoltaic industry in other markets and regions around the world in the future. It is reported that at present, TCL Central's photovoltaic monocrystalline and wafer production ranks first in the world.

Image source: Daily Economic News Infographic

The "Daily Economic News" reporter learned that statistics from the General Administration of Customs of China show that China exported a total of 154.8GW of photovoltaic modules in 2022, a significant increase of 74% year-on-year. China's photovoltaic industry was the "highlight" of foreign trade last year and became a "Chinese business card".

Under the background of the dual carbon goal and the energy crisis, the global photovoltaic market demand is continuing to grow rapidly. According to the International Renewable Energy Agency (IRENA), by 2050, the installed capacity of photovoltaic power generation will exceed 14,000GW; In 2050, the cumulative installed capacity of global photovoltaics will be more than 20 times the current one, and the market space is huge.

Li Dongsheng also mentioned in an interview with reporters that China's photovoltaic products account for more than 90% of global output, and the globalization of Chinese photovoltaic companies is necessary and inevitable. The global market demand for photovoltaic products is growing very fast, of course, these market demand cannot be completely produced and exported by China, and many overseas countries have also proposed plans to develop photovoltaic industries in their own countries.

"If we don't take advantage of these opportunities and actively participate in global expansion, this opportunity may be snatched up by other countries." Li Dongsheng said.

He stressed that with the development of economic globalization in the future, the layout of globalization of Chinese enterprises will continue to be optimized and evolved. Made in China must carry out an active global layout in order to maintain its comparative advantage in global competition.

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