Description: Chinese state officials have reportedly agreed on limiting access to solar manufacturing equipment that eventually ends up in the US industrial system. The decision has been discussed over the week and arrives before a scheduled Trump – Xi meeting in May. Solar manufacturing equipment has a vast applicability in alternative energy and is crucial for providing energy to increasingly demanding data centers and manufacturing stations. Larger US companies such as Tesla, Google and Amazon are highly reliant on such components from China as they are bidding to develop alternative energy sources both domestically and in space. Central to manufacturing solar equipment is the Chinese Suzhou Maxwell Technologies which has been producing equipment using heterojunction technology used for manufacturing high – end solar panels.
Impact: China’s restrictions announcement arrives shortly before a Trump – Xi leaders summit as a counterbalance to US military interventionism and transactional foreign policy and likely a form of repositioning before the restart of trade negotiations. The decision is similar to last year’s critical components restrictive regulations and is aimed directly at soliciting concessions from the US in the ongoing trade war. Solar manufacturing equipment is critical for the space race and the inevitable restructuring towards alternative energy resources of national markets which likely positions China in a more favorable situation regarding the upcoming trade talks. The restrictions are also part of the war for technological dominance between the world’s two largest economies, as China’s manufacturing and export capabilities likely aim to maintain a dominant role on the demanding US high – tech industry thus achieving economic and trade codependence.