China-backed renewable energy projects in Southeast Asia have attracted capital, created jobs and supported the upgrading of local industries. How will China and its ASEAN neighbours respond to US restrictions aimed at stifling the region’s renewable energy expansion?
In little over a decade, Southeast Asia has become one of the world’s top exporters of solar power equipment – a success driven significantly by the relocation of Chinese manufacturers to the region. But now, the sector faces considerable challenges as US tariffs cut off their main export market, intensifying pressure on a previously booming trade.
The arrival of factories backed by Chinese solar heavyweights such as Trina, Longi, JA Solar and Jinko Solar, among nearly 20 other competitors, has transformed Malaysia, Vietnam, Thailand and Cambodia into world-leading production and export hubs for a range of solar components. Together, these countries account for over 40% of global manufacturing capacity of solar modules outside China, and around 20% of worldwide exports.
Southeast Asia’s solar exports have primarily targeted the US, with more than 80% of the equipment it imported in the first half of 2024 sourced from Malaysia, Vietnam, Thailand and Cambodia, according to BloombergNEF.
In June 2024, the US Biden regime ended a two-year relief on import tariffs for solar panels from the region’s four leading producers, targeting trade sanctions againist China-linked manufacturers.
On 21 April 2025 the Trump regime announced new tariffs on Southeast Asian solar manufacturers, reaching ridiculous heights of up to 3,521% for some exporters, though varying by country and company. Trina Solar, for example, has been hit with tariffs totalling 375% on its production in Thailand, while Jinko Solar will face rates of 120% on its exports from Vietnam, but lower levies of 40.3% from Malaysia.
Yang Muyi, senior energy analyst at global energy think-tank Ember, said that Chinese technological expertise had helped to accelerate Southeast Asia’s own solar industry. “China’s success in solar manufacturing did not happen overnight; it was the result of decades of sustained policy support, including long-term investment, research and development funding, and the development of integrated industrial clusters,” Yang said. “Even with these strong domestic policies, it still took years for Chinese companies to become global leaders” he added.
However, as the US becomes an increasingly inaccessible export market, the region is looking to alternative markets. “It’s not so much about Southeast Asian nations reducing their dependency on China as it is about reducing their dependency on the US as a market,” said Grant Hauber, strategic energy finance advisor for Asia at the Institute for Energy Economics and Financial Analysis.
Amidst the ongoing uncertainties created by the US trade war on China, expansion of Southeast Asia’s domestic markets could offer a valuable hedge according to Yang. Accelerating domestic transitions towards clean electricity could generate substantial local demand for solar equipment and infrastructure.
Source: [edited extract] Dialogue Earth, April 29, 2025. https://dialogue.earth/…/what-next-for-southeast-asias…/
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