National People's Congress Deputy Li Dongsheng: Strengthen financing support for advanced manufacturing and promote the "anti-involution" of photovoltaics

Southern Finance National Two Sessions Reporting Team Ni Yuqing

During the 2026 National Two Sessions, NPC Deputy and TCL Founder and Chairman Li Dongsheng proposed suggestions on topics such as financing for advanced manufacturing, “anti-involution” in the photovoltaic industry, and expanding domestic demand.

Addressing issues like the relatively weak capital strength of China’s advanced manufacturing enterprises and limited financing channels in the capital market, he recommends strengthening financial support for these enterprises, continuously opening up financing channels, and enhancing capital support.

Regarding overcapacity and severe supply-demand imbalance in the photovoltaic industry, he suggests introducing supporting policies to promote market-oriented restructuring of the industry and break the “involution” competition.

Advanced manufacturing needs a “special financing channel”

Currently, China’s manufacturing value-added accounts for nearly 30% of the global total, maintaining the world’s largest scale for 15 consecutive years. However, Li Dongsheng notes that China’s manufacturing still has weaknesses in some high-tech fields, such as integrated circuits.

“Transforming and upgrading China’s manufacturing relies on developing high-tech, asset-heavy, long-cycle industries,” Li said. “Fields like integrated circuits and semiconductor displays still require significant capital investment, even if not very large, and are important areas. Industrial software and AI large models also need continuous investment.”

He further pointed out that after more than 20 years of effort, China’s semiconductor display industry has achieved “co-equal footing” and partial “leadership” in international competition. However, there is still a significant gap in the integrated circuit sector, mainly due to limitations in technological equipment and insufficient capital investment.

“Under the current economic system, how to further stimulate enterprises’ investment in the integrated circuit industry is a major challenge,” Li said. “Re-financing in the capital market is key for private enterprises to engage in advanced manufacturing and achieve sustainable development.”

In an interview with media outlets like 21st Century Business Herald, Li said: “Refinancing is very difficult, with long procedures and cycles, and requires suitable timing windows. The core issue? Now, regulatory agencies treat all projects equally, but market financing resources are limited. Regulators need to support these heavy-asset, high-tech, long-cycle industries through financing policies aligned with national industrial policies. These enterprises’ projects need special rules and channels. Industries that meet these criteria can apply these standards. (Leading overseas companies) invest much more annually than we do. Where does their money come from? The national big fund can’t invest infinitely, so there must be a more convenient market financing channel.”

He believes: “To cultivate world-class enterprises, we must strengthen capital support. Relying on the enterprises’ own profits and fully utilizing the financing functions of the capital market to inject momentum for continuous development.”

Breaking the “involution” in the photovoltaic industry

Recently, the photovoltaic industry has faced severe overcapacity and ongoing “involution” competition. Data from TrendForce shows that by the end of 2024, domestic capacity for silicon wafers, cells, and modules exceeds 1100 GW. Meanwhile, global new installations in the same period are only 530 GW, with overcapacity more than double.

In this rapid capacity expansion, a large proportion of new projects are often over 50% funded by local investments, or even higher. This non-market-based investment leads to surplus capacity involving state-owned capital, making it difficult to clear excess capacity and further intensifying “involution” competition.

“Market should play a decisive role in resource allocation, making the entire economic system and activities more aligned with market rules, rather than repeatedly encountering different situations,” Li emphasized.

He proposed two main approaches to resolve overcapacity: one is through market competition and the “survival of the fittest” mechanism to push outdated capacity out of the market, which is direct but can lead to idle and wasted existing capacity and physical assets; the other is through mergers and restructuring, supporting leading enterprises in market-based acquisitions and integrations, reducing disorderly competition, and gradually balancing supply and demand to resolve excess capacity.

Regarding the second approach, Li made specific suggestions: “First, introduce policies allowing state-owned funds and local governments to legally and compliantly realize asset impairments during asset exit. Second, guide financial institutions to actively support mergers and acquisitions. Third, since most leading photovoltaic companies are listed, establish green channels for mergers and acquisitions in the industry.”

“He also suggested that local state-owned assets gradually withdraw from highly competitive industries,” Li said. “State-owned capital funds can support advanced industrial projects but must adhere to four principles: align with national industrial policies; government funds only bear limited liability risks; carefully select projects to ensure safe exit of funds; and cooperate with market entities capable of covering project risks.”