The European Commission's recent imposition of punitive duties on Chinese solar panels has caused a rift in China-EU trade relations. But aside from negotiations aimed at brokering a compromise, how can China address this issue?

Most of the recent woes faced by China's renewable energy industries - particularly the solar energy industry - stem from excessive manufacturing capacity. There are several reasons for this overabundance: two of which being the absence of comprehensive development plans as well as the government's inappropriate role in the industry.

While solar technology offers the promise of clean and renewable energy, solar power systems are still generally more unstable and more expensive than conventional equipment. At this stage of the game, the renewable energy industry clearly needs government subsidies and policy support to underpin its development. However, we ought to ask how authorities can help build the country's solar industry without getting in its way. Doing so will require a carefully crafted renewable energy strategy which can meet China's current development conditions while maximizing efficiency.

At the local level, the involvement of the government has created too much capacity among clean energy equipment manufacturers. With local demand still weak, many of China's solar equipment makers have either folded or are teetering on the edge of bankruptcy. Current industry conditions clearly call into question the efficacy of administrative efforts to date.

Right now, the government should stop fixating on the scale of the industry and concentrate on R&D and end-market utilization.

To boost the competitiveness of solar energy in China over the long run, the government needs to take steps now to reform the pricing of electricity generated by fossil fuels to reflect resource scarcity and the impact of environmental pollution. Doing so would greatly help level the playing field for the renewable energy sector.

Meanwhile, more government money is necessary to encourage purchases of solar technology equipment. To promote judicious spending, energy officials must put together a unified expansion plan for the solar energy industry which includes detailed implementation guidelines.

A quick consolidation of the solar industry is now inevitable. Local authorities should not interfere with this process and try to keep unhealthy companies afloat. In the end, this will only harm companies that are better suited for the market.

来源：《环球时报》