China's industry ministry has conducted a meeting with representatives from the country's solar sector, urging them to enhance regulatory measures, reduce overcapacity and mitigate extreme competition, as reported by Reuters.

The move comes as part of the ministry’s efforts to promote sustainable development within the industry.

The meeting marks the second such gathering in two months, highlighting the government's increased focus on regulating this rapidly expanding market.

According to an official statement from the ministry, participants were encouraged to address the issue of “low-price disorderly competition”, which is linked to overcapacity.

This follows a July 2025 discussion in which authorities highlighted promoting an orderly exit for outdated production capacities, signalling potential governmental intervention in the sector.

Expectations have been mounting since a late July Politburo meeting that anticipated governmental action against deflationary pressures in the economy.

In 2024, company filings revealed that major Chinese solar firms slashed close to one-third of their workforces as manufacturing value chain losses soared to $40bn during the year.

Further complicating matters are recent pricing reforms, which have led to fluctuating demand through the first half of 2025.

Power producers expedited new solar plant construction in anticipation of policy changes effective from June, resulting in a significant drop in domestic demand during the latter half of the year.

Despite these challenges, annual installation rates are projected to reach record highs in 2025.

China's solar power growth is expected to slow in the second half of 2025 due to ongoing reforms, which have removed fixed rates for renewable energy projects.