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 Report Team Ni Yuqing

During the 2026 National Two Sessions, National People’s Congress Deputy and TCL Founder and Chairman Li Dongsheng offered suggestions on topics including financing for advanced manufacturing, “anti-involution” in the photovoltaic industry, and expanding domestic demand.

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

Regarding overcapacity and severe supply-demand imbalance in the photovoltaic industry, he suggested implementing 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 noted 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, capital-intensive, long-cycle industries,” Li said. “Fields like integrated circuits and semiconductor displays still attract some capital investment, though not large, but still important. Industrial software and AI large models also require ongoing investment.”

He further pointed out that after more than 20 years of effort, China’s semiconductor display industry has achieved “co-ranking” and partial “leading” status in international competition. However, there remains 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 sustain 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? Currently, 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. (Overseas leading companies) invest much more annually than we do. Where does their money come from? The national big fund can’t invest infinitely, so a more convenient market financing channel is needed.”

He believes, “To cultivate world-class enterprises, we must strengthen capital support. Relying on the companies’ own earnings and fully utilizing the financing functions of capital markets 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, local investment in new projects often accounts for over 50%, sometimes even higher. This non-market-based investment leads to obsolete capacity involving state-owned capital that is difficult to clear, further intensifying the “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.

Li proposed two main approaches to resolve overcapacity: first, through market competition to force out outdated capacity via the survival of the fittest mechanism—though direct, this can lead to idle and wasted existing capacity and physical assets; second, through mergers and restructuring—supporting leading enterprises in market-based acquisitions and integrations to reduce disorderly competition, produce according to demand, and gradually balance supply and demand to resolve overcapacity.

Regarding the second approach, Li made specific suggestions: “First, introduce policies allowing state-owned funds and local governments to legally and compliantly realize asset devaluation during exit processes. 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 funds can support advanced industrial projects but must adhere to four principles: align with national industrial policies; government funds only bear limited liability; carefully select projects to ensure safe exit of funds; and cooperate with market entities capable of covering project risks.”