On January 9, 2026, the Ministry of Finance and the State Taxation Administration issued Announcement No. 2, making significant adjustments to the export tax rebate policy for photovoltaic and battery products. From April 1, the value-added tax export tax rebate for photovoltaic products will be completely abolished; from January 1, 2027, the export tax rebate for battery products will be completely abolished, with the export date on the customs declaration as the determining factor, while the consumption tax policy remains unchanged. The list includes 249 items in the photovoltaic category and 22 items in the battery category. This policy change has a clear timetable for implementation. The export tax rebate for photovoltaic products will be reduced to zero on April 1 this year, while the export tax rebate for batteries will first be reduced from 9% to 6% this year, and then completely abolished on January 1, 2027. The core intention is very clear: to stop relying on tax rebates to engage in price wars and encourage the manufacturing industry to compete based on technology, quality, and brand. China’s photovoltaic industry accounts for 80-90% of the global market share, and its battery industry accounts for 60-80%. These industries are no longer in need of “support for the weak,” but rather need to achieve “self-reliance for the strong.” In the past, companies relied on tax rebates to lower prices, making them vulnerable to trade frictions from other countries under the pretext of “subsidy dumping.” Although companies received subsidies through tax rebates, the added tariffs imposed by importing countries meant that companies didn’t actually save money, while trade frictions intensified. Eliminating or reducing tax rebates will help prices return to rationality, reduce trade frictions, and alleviate fiscal pressure. The China Photovoltaic Industry Association has also clearly expressed this view. Export prices will no longer be forced down by tax rebates, and the risk of foreign anti-subsidy measures will decrease accordingly. Order negotiations will then return to a competition based on product and service strength.
Consulting expert Lü Jinbiao believes this is an anti-involution policy, indicating the industry has shifted from low-price bidding to technology-driven competition. Over the past year, the industry’s supply and demand relationship has improved, and prices have rebounded, suggesting the era of relying on low prices to achieve scale is gradually ending. However, Ge Yuyu, associate professor at the Shanghai National Accounting Institute, warns that companies may experience short-term pain. A “rush to export” phenomenon may occur in the first quarter of this year, with companies working overtime to ship goods before April 1st. However, such news is mostly market speculation, with no official confirmation of scale. When dealing with this window of opportunity, rushing to export is only a short-term strategy. After stabilizing, companies need to consider long-term benefits, eliminate outdated production capacity, and invest resources in more efficient processes.
The policy’s intention is clear: instead of investing in strong product categories where pricing power already exists, funds should be redirected to R&D, core technologies, and areas related to people’s livelihoods.
Regarding response strategies, suggestions include protecting upstream resources and intellectual property rights, and taking retaliatory measures against malicious tax increases. The fiscal space freed up should be prioritized for areas such as childbirth, consumption, R&D, military industry, and overseas resource development. Improving systemic capabilities is more important than relentlessly driving down prices in a single环节 (link/stage). At the enterprise level, leading companies should accelerate the layout of overseas production capacity and localized services to diversify market risks and enhance brand influence; SMEs should pay attention to the RMB appreciation trend and comprehensively consider the impact of exchange rates, taxes, logistics, and other factors on profits. Meanwhile, the “Artificial Intelligence + Manufacturing” special project launched by eight departments presents a good opportunity for enterprises to improve efficiency and achieve high value-added production. Traditional industries that cannot improve production efficiency can also enhance their competitiveness by increasing the cultural added value of their products, focusing on safety, durability, aesthetics, and service to make customers willing to pay higher prices. At the foreign trade level, this policy adjustment is not a tightening of exports, but rather a shift from subsidy competition to competition based on rules and capabilities. The elimination of tax rebates reduces the vulnerability of China to other countries’ attacks, lowers the level of trade disputes, and shifts the focus back to product quality, delivery, and innovation. The previous adjustment of export tax rebates from 13% to 9% already signaled this trend, and this one-step policy is a continuation of that trend. Overall, this policy adjustment returns the benefits to the market, allocates fiscal resources for long-term development, and entrusts competitiveness to technology and organization. While some companies may feel the pinch in the short term, in the long run, the industry will be healthier, businesses will be more informed, and public finances will be more stable. A strong manufacturing nation should not rely on tax rebates for appearances, but rather on genuine capabilities to achieve substantial results; this is the right path for manufacturing development.
