China is, by far, the largest player in renewable energy globally, and private sector analysts are predicting its leadership will continue unabated. 

Norwegian risk management firm DNV anticipates that renewables will expand from 30% of China’s total current power generation to more than half over the next decade.

For Chinese energy companies, however, this internal demand is augmented by strong export demand with many companies dependent on western markets for growth. 

For example, in its recent third-quarter earnings announcement, CSI Solar reported strong profits that outperformed peers in large part due to exports to the United States that accounted for almost a third of shipments. 

Signals that U.S. markets may become less accessible are now casting a long shadow over the Chinese solar and wind power segments. 

The U.S. began imposing duties on solar imports from China in 2012 to combat unfair advantages that Beijing provided to local producers.While the Commerce Department has recently begun reviewing anti-dumping duties on a few small segments of the Chinese residential solar panel industry, these tariffs remain firmly in place.

In response to these hurdles to U.S. market access, affected companies began setting up operations in other Asian nations that weren’t affected by the tariffs, particularly Vietnam. But now this back door appears to be slamming shut.

The Biden administration recently implemented duties on imported renewable energy products in an effort to boost U.S. manufacturing. While these new rules impact Chinese companies indirectly, sweeping tariffs threatened by former President Donald Trump in his campaign for a second term on all imports have added to gloom among Chinese solar and wind equipment producers. 

The Commerce Department began imposing duties on Oct. 1 on southeast Asian solar imports after concluding that the companies producing products in the region are receiving illegal government aid. The duties affect Cambodia, Malaysia, Thailand, and Vietnam, accounting for a majority of U.S. solar cell imports. Fees levied on Thai and Vietnamese solar imports were imposed retroactively to July. 

The primary U.S. solar industry lobbying group praised the move. American Alliance for Solar Manufacturing Trade Committee (AASMT) counsel Wiley Rein stated that the announcement was “an important early step in a year-long process to determine the amount of illegal government subsidies benefiting these companies.” 

Even as exporters to the U.S. face obstacles, Chinese domestic demand remains a growth story unmatched by any other economy. 

U.S. inventors looking for exposure to the Chinese renewable energy markets have a number of  options. 

The KraneShares MSCI China Clean Technology ETF KGRN , launched in October 2023, is the only pure-play exchange traded fund for the segment. Investors seeking diversified international exposure have several options with significant China allocations. The  VanEck Low Carbon Energy ETF SMOG holds roughly 18% of its assets in Chinese renewable energy stocks while the Goldman Sachs Bloomberg Clean Energy Equity ETF [GCLN] has 13% of its money invested in Chinese clean energy companies. 

More stories we’re tracking at Equities:

NAACP launches new venture fund

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“Investment is the backbone of impact, and impact investing will shape socioeconomics for generations to come,” NAACP President and CEO Derrick Johnson said. 

First Solar accuses competitors of patent infringement

First Solar FSLR management announced during its third-quarter earnings call on Tuesday that it will begin pursuing a series of lawsuits against rivals infringing on patents. Noting that they are not alone in pursuing intellectual property claims against offshore rivals, First Solar also prepared shareholders for a protracted fight. 

“To access these manufacturers, the majority of which are Chinese-based, continue to report significant financial loss in their race to the bottom, it is reasonable to expect that they will continue to aggressively assert these claims,” First Solar CEO Mark Widmar said. The company announced earnings for the period that were in line with consensus forecasts, but warned that uncertainties related to the upcoming election made future guidance difficult. 

BlackRock shutters ESG fund 

Fund giant BlackRock BLK decided on Wednesday to close its ESG Global Multi Asset income fund after the product failed to draw significant assets. In September 2023, BlackRock announced the closure of two other ESG focused funds. The world’s largest asset manager is not alone in withdrawing from values based investment offerings in recent years as asset outflows and political pressures dampened investor enthusiasm. Recent fund flow data suggests that the tide may be turning as allocations have begun to recover. 

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