Introduction
With $252billion in annual trade, China is Australia’s largest trading partner. Australia’s trade with China accounts for 27.4% of the nation’s trade with the world. Japan comes in at a distant second with a ‘meagre’ $88.5 billion worth of bilateral trade. The fact of the matter is that not only does the Sino-Australian trade partnership cover multiple industries, but the Australian Trade and Investment Commission has reported that China is Australia’s largest market and source of revenue in most of these industries. China is Australia’s largest source of international students, foreign direct investment and tourism. Australia is a major destination for the booming and lucrative Chinese tourism industry, and Chinese spending in the Australian agricultural goods market is unrivalled. Not only this, but China is also the largest import destination for Australian products. These details should make it sufficiently clear that Sino-Australian trade is no small matter. Mutual trade is the centre point of Australia’s relations with China, and it dominates the two nation’s bilateral foreign policy directives. For their part, the Chinese have been pursuing an export and investment-oriented growth policy. However, recently the Chinese government has begun transitioning to a service and consumer-based economy to sustain growth and development in the future. Both countries have strengthened their mutual trade relationship through the China Australia Free Trade Agreement, introduced in December 2015. This trade agreement considerably broadened the reach of Australian companies into their largest export market and contributed to the integration of both nation’s economies. Today, however, this deeply profitable trade relationship is in a fragile place. COVID-19 restrictions have strangled the tourism and education industries. Furthermore, Australia’s most valuable exports to China, namely coal, iron ore, gold, liquified natural gas and iron ore are also under threat from the growing tension between Australia-China relations. Part of this recent cooling down of relations is because of America’s aggressive trade war with China and part of it is because of Chinese attempts to strong-arm other smaller and weaker nations into compliance. The problem in this equation is that Australia is neither an American vassal, dancing to Washington’s tunes, nor is it a weaker, smaller or less proud nation than China to be bullied into compliance. On the contrary, Australia has firmly, through statements and actions, made clear its intention to pursue a sovereign and independent foreign policy, free from external dictates and interference of trade partners and allies alike. To their credit, the Americans have realised that Australia will pursue a China policy that will invariably differ from Washington’s own, and they have made peace with it. China, on the other hand, seems to be having trouble recognising this reality.
The Current Affairs of Australian/Chinese Relations
Since China began its steady and increasingly rapid economic rise in the early 90s, it has constantly seen the United States as its primary rival. Much of Beijing’s foreign policy calculations centre around this issue, perceived or actual. As China’s economy has continued to boom, Beijing’s stance has become more and more assertive and sure-footed. With America’s ‘pacific pivot’ now in full swing, the politics of the region have become increasingly complicated. Australia has traditionally been aligned to America ideologically and politically, yet there is no denying the deep-rooted and immensely profitable economic partnership that Canberra has built with Beijing. Yet the dynamics of great-power politics dictate that as the rivalries of two powerful nations grow, it invariably becomes more and more difficult for a third nation to hedge its bets and continue to maintain a stable relationship with both. As such, Australia’s relationship with China, no matter how independent, is going to be influenced by America’s increasing friction with China. The Chinese, for their part, have made public their frustrations with Australia’s non-committal attitude on many an occasion. In 1996 a Chinese publication described Australia, using a beloved Chinese proverb, as a bat; one that closed its wings and declared its allegiance with the mammals when they were winning, and later spread its wings and sided with the birds when they were triumphant.
The COVID-19 pandemic has only increased the already considerable stress between Canberra and Beijing, in part because of the former’s insistence the conducting an independent investigation to uncover the origins of the coronavirus. The Chinese, for their part, have not shied away from flexing their muscles by targeting several Australian sectors, including lobster, wine, coal, timber, barley and copper ore with a range of tariffs that have resulted in losses of up to AUD 20billion per year.
Chinese Solar Panels in Australia: What the Future Holds
So, what do these developments mean for the average Australian consumer? To begin with, around 80% of the providers of solar panels in Australia are Chinese. A wide range of Chinese solar products is available for Australian customers. For the most part, Chinese products have proven to be sufficient, if a tad bland and uninspired. Most Chinese companies providing solar panels in Australia are usually are thoroughly average, and yet they’ve taken the Australian market by storm. Part of this is because of the traditionally low price tag that comes with Chinese products. Also, for the regular customer, ‘average’ is good enough. As long as the company can honour its warranties and ensure a stable supply, there is no need to pursue anything that is beyond cheap and effective. There are very few alternatives to this winning combination, as Chinese solar panel manufacturers have discovered. The general perception in Australia is that European photovoltaic providers are generally more expensive, if of higher quality than their Chinese counterparts. And while this may seem like a flattering comparison, it turns out that most people prefer something that will do what it advertises and not break the bank, figuratively speaking, then a product that will go above and beyond what it promises, but has a heftier price-tag. However, it is the purpose of this article to try and dispel some of these myths and provide a clearer image of providers of solar panels in Australia.
Reservations with Chinese Solar Panels
The biggest concern Australian customers have with solar companies is their longevity. A solar installation has a twenty-five-year life expectancy and impressive warranty coverage. But a warranty is only as good as a company’s willingness or ability to honour it. If a company becomes insolvent, it is not going to be able to help customers with warranty claims. Therefore, one of the most important considerations customers have when shopping for solar panels in Australia, or anywhere else for that matter, is the health of a company. Will the company be able to honour this warranty that spans two and a half decades? Are the economic indicators for this company healthy? Does it look like it can survive turbulence in the market? All these are important questions to take into consideration when investing in an expensive and long-lasting system. Now the general perception with Chinese companies, and this may not be entirely unfounded, is that they may have trouble with longevity. Chinese companies may look all shiny and sparkly on paper, but how well can they hold up to real-world economic recessions and inevitable market downturns? One of the best litmus tests of a company, particularly in the solar panel industry, is to not only look at its age but also the diversification of its products. LONGi is a good example of this. A relatively young company (founded in 2007, as opposed to FIMER, which was founded in 1942), LONGi is promising in both the quality of its products as well as the speed of its ascension as a premium provider of solar panels in Australia. However impressive LONGi is on paper, it suffers from an acute weakness, namely that it is a ‘one-trick-pony,’ so to speak. LONGi does one thing, i.e., make solar panels, and it does this rather well. However, that is all it does. This leaves companies like LONGi extremely susceptible to market fluctuations and drops in demand. It is worth mentioning that the Australian ‘solar boom isn’t going anywhere anytime soon, but a recession is inevitable. Not only that, for Chinese companies, it appears more and more likely with time as America’s stance against Beijing hardens and Beijing appears to be more and more eager to take the bull by the horns. Whether this conflict will see one of the two contenders rise to the top, see them both come to terms or, in the worst-case scenario, to blows is yet unclear. These are times of uncertainty, and what countries decide to do now, will shape the world of tomorrow.
European Solar Panels in Australia: Companies that Can Give the Chinese a Run for their Money
Enter the Europeans, ideologically and traditionally aligned with Australia, and known world-over for their high-quality and extremely reliable solar products. The general perception is that the European solar panels in Australia will not only live up to their reputation, but also, as stated earlier, that they will come with a heftier price tag. This is not entirely true. European solar providers in Australia are competitively priced, and while Chinese companies are catching up in terms of quality (particularly with N-type panels and the like) the general impression that European companies have higher quality standards remains firmly grounded in reality. FIMER, for instance, is working hard to bring down its prices. But that isn’t the biggest advantage European companies bring to the table. As stated earlier, a warranty is only as good as the company offering it. Sure, the Chinese companies have a winning combination with their decent solar panels and lower prices, but what good are they if the companies turn solvent? When a customer invests in a FIMER product, they are investing in a company that is 79 years old and still going strong. On the other hand, RECOM, while not as old and grand as FIMER< is a robust company with a wide portfolio of investments that make the company robust and safe. With partnerships spread over three continents and a supply line that is projected to last at least 25 more years, RECOM is as safe an investment as they come. Therefore, keeping in view the deteriorating Australian/Chinese relations, the growing animosity between China and the United States, and the rather unsure footing of many, if not most, Chinese solar panel companies, it may be worthwhile for Australian customers to consider purchasing European products, given both their reliability and their penchant for longevity. The future of Solar panels in Australia may be European after all.
[1]https://www.aph.gov.au/sitecore/content/Home/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/CIB/CIB9697/97cib23#:~:text=The%20Australia%2DChina%20relationship%20has,interests%2C%20including%20strong%20economic%20ties.m? – Parliament of Australia (aph.gov.au)
