Battery giant CATL advanced 5.17 percent, while Shanghai’s STAR new energy index jumped 6.46 percent during morning trading. Trina Solar, a major manufacturer of solar panels, also enjoyed a 5.51 percent increase.
Meanwhile, Daqo New Energy, a polysilicon producer that has faced restrictions on shipments to the United States over allegations involving forced labor, saw its shares climb an even more dramatic 9.87 percent, Reuters reported.
The market reaction suggests that investors are already anticipating a possible shift in Washington’s approach to renewable energy subsidies and trade policy.
Morningstar analyst Cheng Wang told Reuters that the United States represents an especially attractive opportunity for Chinese companies operating in the solar and energy storage industries.
“The U.S. is a large and highly profitable market for solar and energy storage, while Chinese suppliers dominate both sectors. Any reduction in trade barriers could create meaningful upside,” Wang said.
However, the analyst also cautioned against interpreting Thursday’s rally as evidence that Washington is preparing to dismantle existing restrictions on Chinese imports.
According to Reuters, Wang attributed much of the stock market movement to investor expectations and favorable sentiment rather than any specific legislative proposal or confirmed policy change.
That distinction is particularly important given the considerable trade barriers Chinese manufacturers continue to face in the American market.
Several Chinese companies have already encountered significant restrictions under existing U.S. trade and national security policies. CATL, for example, has appeared on the Pentagon’s designation list of “Chinese military companies” since January 2025, according to the Federal Register.
Tariffs also remain a substantial obstacle.
During a 2024 review under the Biden administration, Section 301 tariffs on Chinese solar cells were increased to 50 percent. Duties on lithium-ion batteries imported from China for applications other than electric vehicles subsequently climbed to 25 percent in January.
The Office of the U.S. Trade Representative reiterated its position in an October 7 notice, explaining that tariffs initially introduced in 2018 would remain in place.
The agency stated that the existing measures, as modified, “will remain in effect, subject to possible further modifications.”
Even with Democrats preparing to assume control of both congressional chambers, there is no guarantee that Chinese manufacturers will receive the relief investors appear to be anticipating.
President Trump remains a powerful factor in the equation.
The incoming Democratic majority will take office in January, but legislation approved by Congress must still contend with the president’s veto authority. Trump has already made clear that he intends to use that power aggressively if Democrats attempt to advance legislation he opposes.
During a podcast published Monday, Trump reportedly warned that he would become “Mr. Veto” if Democrats gained control of Congress, according to NPR.
That warning could complicate any Democratic effort to revive renewable energy incentives in a manner that would benefit Chinese suppliers.
Jefferies analyst Alan Lau also questioned whether additional federal support for renewable energy would necessarily translate into greater access for Chinese exporters.
Lau pointed to the numerous investigations into Chinese products initiated during the Biden administration, including anti-dumping proceedings, countervailing duty investigations and additional Section 301 trade actions.
In other words, even if Democrats succeed in restoring certain clean energy incentives, existing trade restrictions and national security concerns could continue to limit the ability of Chinese companies to capitalize on the American market.
National security concerns surrounding renewable energy infrastructure have also become increasingly prominent.
On July 28, the Federal Communications Commission added foreign-produced power inverters to its Covered List. These devices play an important role in connecting solar panels and battery storage systems to the electrical grid.
The designation prevents new inverter models from receiving FCC equipment authorization, although retailers can continue selling models that had already received approval.
FCC Chairman Brendan Carr defended the decision as part of a broader effort to protect America’s critical infrastructure.
“Following President Trump’s leadership, the FCC will continue to do our part to secure America’s critical supply chains and, with today’s action, the FCC is acting in lock step with our national security agencies to do just that,” Carr said in a July 28 statement.
The commission subsequently narrowed the scope of the designation on August 20 after the Department of War determined that certain foreign-manufactured inverters qualifying for clean energy tax credits did not present an unacceptable security risk, according to an FCC notice.
For now, Chinese renewable energy manufacturers appear to be benefiting from optimism surrounding the Democrats’ congressional victories. But the immediate stock market rally should not be confused with an actual breakthrough in U.S.-China trade relations.
Investors may be betting on friendlier policies, but Washington’s existing tariffs, national security restrictions and Trump’s veto authority remain formidable obstacles.
Whether the Democrats can turn their electoral victories into meaningful changes for China’s green energy industry remains an entirely different question.
